KUALA LUMPUR (Jan 8): A former Goldman Sachs Group, Inc banker who helped negotiate a 1Malaysia Development Bhd (1MDB) mega deal involving fraudster Jho Low, has resurfaced in an important new role.

In the latest issue of Whale Hunting, American journalist Tom Wright said the banker in question is Hazem Shawki, who was last week appointed to run UBS’ investment bank in the Middle East.

Back in 2012, Shawki was working in Dubai for Goldman Sachs, which was deeply involved with Jho Low and the 1MDB scandal.

Wright said that in a nutshell, Shawki was envious of the money that Tim Leissner, another Goldman partner, was making due to his connection with Jho Low, a businessman who was running Malaysia’s 1MDB state fund.

Leissner later pleaded guilty in the US to helping Low steal over US$200 million from 1MDB and is living the Beverly Hills high life as he awaits sentencing.

Wright said there is no evidence that Shawki, who has never been accused of wrongdoing, was aware that Leissner and Low were stealing money from 1MDB.

(Goldman says Leissner and another banker went rogue and hid their actions from others at the bank.)

But Shawki was aware that Goldman’s compliance department had concerns about Low — a red flag.

Despite this, Shawki and other Goldman bankers were keen in 2012 to get involved in a potentially lucrative deal involving Low.

The deal involved a US$2.2 billion takeover of a US oil company by the subsidiary of a Middle East fund and a Low-owned shell company.

While Goldman’s compliance department vetoed the bank from representing Low, it did not demand that the bank drop out entirely.

Instead, Goldman represented the subsidiary of the Middle East fund, even though the bank was fully aware of Low’s involvement as a partner.

Wright said Low invested only US$50 million in the takeover of the US oil company.

One week later, the subsidiary of the Middle East fund bought out Low’s share of the deal for US$350 million, making Low 600% on his money in a matter of days.

There is no evidence that anyone at Goldman knew this was going to happen.

But after the deal, Shawki told an executive from the Middle East fund that the gargantuan payout was Low’s reward for scouting the deal.

This all could have been avoided if executives at Goldman, including Shawki, had raised alarms about Low’s involvement instead of chasing profits (the bank made a whopping US$8 million fee as an adviser on the deal).

In October 2019, Shawki left Goldman Sachs for Credit Suisse.