This article first appeared in The Edge Malaysia Weekly on March 7, 2022 - March 13, 2022

TIM Leissner and Roger Ng — the two Goldman Sachs executives who worked with Low Taek Jho, or popularly known as Jho Low, and 1Malaysia Development Bhd (1MDB) on three bonds totalling US$6.5 billion — were in early 2014 getting very worried and nervous about the increasing media scrutiny.

Articles by The Edge, in particular, were hitting raw nerves.

In its Feb 17, 2014, cover story titled “The 1MDB story”, The Edge wrote: “1MDB was set up to drive investments in strategic sectors with high impact on the economy. But, after five years, all it has to show is a mountain of debt and few signs of being able to succeed without government sweetheart deals.”

Subsequent to that, in the April 28, 2014, issue, the weekly had another cover story titled “Bring back the money”, which stated that 1MDB had parked RM18 billion overseas with unnamed financial institutions. The article highlighted the money trail and the non-transparent manner in which funds were withdrawn and explained why the billions must be brought home.

Then on May 14, 2014, The Edge Financial Daily had a Page 1 story titled “1MDB’s banker quits Goldman Sachs — Malaysian Roger Ng had hand in bond issuance spree”.

This prompted Ng to email Leissner with a digital copy of the article, Leissner told the US court in New York, according to the March 1 transcript obtained by The Edge.

Prosecutor Drew Rolle: Who is it from?

Tim Leissner: It’s from Roger to myself.

What’s the date?

It’s May 14, 2014.

Is there an attachment to this?

Yes. It says Edge article.

What’s ‘The Edge’?

The Edge was a very prominent newspaper and publication in Malaysia that was actually one of their few in the country that was critical of the government.

This article, what is it regarding?

It’s regarding Roger’s departure from Goldman Sachs in 2014.

And did you discuss this article with the defendant after he sent it to you?

Yes. We both read it. There’s, I think, a continuation on the second of second page. And, you know, obviously we didn’t like any kind of coverage. I certainly didn’t. And Roger agreed with that, too, at the time around us linked to 1MDB, and any of that did not sit comfortable.

If we can go to the last paragraph on that page … The US$3 billion bond, what did you understand that to be a reference to?

That was Project Catalyze, sir.

And there are some references to questions being raised. Is this an example of the questions you referenced earlier?

Yes, correct. The same question that I mentioned.

 That’s a picture of you?

 That’s me, yes.

And there’s references to Jho Low, you and the defendant’s ties to Jho Low in this article?

Yes. There’s a reference to that, and it’s a reference obviously in connection with 1MDB as well.

Now why was it concerning to you to be linked in that way in the press to Jho Low and to 1MDB?

Following the scheme, we were, of course, Roger and I, we were very concerned about any linkage that could establish a link between, effectively, the team that had been on the inside of the — of the scheme that involved Jho. It involved myself and Roger, and others around the table, including Jasmine, and the link to 1MDB.

We did not want that to be a public issue. We did not want to have that raised in the public. Because more questions asked means more investigations started and things like that. None of that sat comfortable with me.

In this article, in this front page, is there another article about 1MDB that the defendant sent you as part of this front page?

Yes. There’s the second piece to it, which is actually the second page, the mystery of 1MDB’s US$2.3 billion Cayman Island Fund that you see there on the right-hand side. That’s a reference to what I had said before: Where had the money gone that was raised on Project Catalyze?

And, again, these are the types of negative press that you were concerned about?

Yes. Especially one that questions the use of proceeds. When we had to — when we issued Project Catalyze, when we issued those bonds on Project Catalyze — we had to, of course, set out what they were for in general terms.

But the use of proceeds, which is where the money is used for, what the money’s used for, it was really for this joint venture to invest and help in projects to benefit the country at that time.

Eventually, the Cayman Island Fund was not part of that and it was just concerning to us because we knew this is not what was stated officially.

As these articles came out, you continued to withhold the truth about what you knew was happening at 1MDB and with these deals?

Yes. Yes.

Did these stories cause anything to happen internally at Goldman Sachs?

Yes, these stories, in addition to the missed interest payment or nearly missed interest payment, the delay, let’s put it this way, the delay in interest payment on Project Magnolia [as the first bond deal was called], caused the firm and its control functions to say that they required further work on 1MDB, and for 1MDB to answer a bunch of questions that we, as a firm, that Goldman Sachs wanted to raise.

While alarms were raised within Goldman Sachs by the media scrutiny and unnerving Leissner and Ng, The Edge followed up with more articles that year, including at least two more cover stories — “Deconstructing 1MDB fund raising” and “Why Malaysians should be worried about 1MDB’s debts”.

And in its Oct 27, 2014, issue, The Edge published an article titled “1MDB’s habit of overpaying to raise money”, which zoomed in on the US$480 million in commissions, fees and other expenses 1MDB had to pay for selling the bonds.

Following that report, Goldman’s communications team in Hong Kong arranged a conference call on Nov 7 with The Edge editors Kathy Fong and Cindy Yeap, during which they defended the fees and insisted all the transactions were above board.

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