This article first appeared in The Edge Malaysia Weekly on February 28, 2022 - March 6, 2022

LICKING their lips at the prospect of major profits in the first 1Malaysia Development Bhd (1MDB) bond deal in May 2012, Goldman Sachs’ plans nearly came undone as a crucial signature to cement the deal was missing.

According to reports by Bloomberg, Goldman’s former Southeast Asia chairman Tim Leissner testified that the bank had already pre-sold the bonds in the transaction, and collected investors’ money in the US$1.75 billion debt issue.

However, without the signature of Khadem al-Qubaisi, who was the head of Abu Dhabi’s state-owned energy company, the deal would have collapsed as International Petroleum Investment Co, or IPIC, was a guarantor for the massive bond issue.

“They were in a state of panic to get that guarantee completed,” Leissner told a jury last Thursday (Feb 24) in the trial of his one-time colleague Roger Ng.

He also told the court that they were “looking frantically” for al-Qubaisi, then the head of IPIC.

“It was critical because without the signature, there would be no Project Magnolia,” he said, referring to the deal’s name.

Enter Low Taek Jho (Jho Low). Leissner said Ng and the others reached out to the only person who might be able to find al-Qubaisi, and that was Jho Low. He went so far as to call Jho Low the “gatekeeper” between them and al-Qubaisi.

In the end, the deal was signed off after al-Qubaisi was located in the South of France following numerous calls around the globe, including to Malaysia and Abu Dhabi.

In the bond deals that totalled US$6.5 billion, Leissner testified that Jho Low had mapped out bribes for critical players, including al-Qubaisi.

The US Justice Department in 2020 announced a US$49 million settlement of its civil forfeiture cases against assets it said al-Qubaisi acquired using money allegedly taken from 1MDB.

Jho Low, who US prosecutors say engineered the massive fraud, is a fugitive and believed to be residing in China.

Al-Qubaisi was sentenced in Abu Dhabi in 2019 to 15 years in prison for his involvement and ordered, with another IPIC executive, to repay US$336 million, according to The Wall Street Journal.

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's App Store and Android's Google Play.