Regular readers know Tim Leissner.
Leissner was the powerful Goldman banker responsible for financing Malaysian PM Najib Razak’s giant slush fund, known as 1MDB.
As we’ve outlined previously, 1MDB was set up by Najib six years ago and has been the subject of intense scrutiny for borrowing $11 billion to fund questionable acquisitions. $6.5 billion of that debt came from three bond deals underwritten by Goldman and orchestrated by Leissner, who is married to hip hop mogul Russell Simmons’ ex-wife Kimora Lee who, in turn, is good friends with Najib’s controversial wife Rosmah Manso.
Leissner arrange three private placements, one for $3 billion and two for $1.75 billion each back in 2013 and 2012, respectively. Goldman bought the bonds for its own book at 90 cents on the dollar with plans to sell them later at a profit.
Since last year, 1MDB has been under the microscope of Najib’s political opponents and is also being scrutinized by authorities in multiple countries. Former PM Mahathir Mohamad - who is still highly influential - has called for a thorough investigation of “donations” from Saudi benefactors that ended up in Najib’s personal bank account, but domestic efforts to dig deeper into the source of the funds fell flat last month when Malaysia’s top prosecutor Attorney General Mohamed Apandi Ali cleared the PM of wrongdoing.
“The four-page statement didn’t address several issues that Malaysians have sought answers to, such as: Who specifically donated the money?; Why was it donated?; And what happened to the money that wasn’t returned?” WSJ, who broke the story last year remarked, commenting on Apandi’s written rationale for clearing Najib.
Amid the ongoing international probes into 1MDB Leissner mysteriously took a leave of absence from Goldman, leaving Singapore for Los Angeles in January. At the time, Goldman said he was still an employee.
Well, not anymore.
“Tim Leissner, Goldman Sachs’ Southeast Asia linchpin, has left the bank, which is struggling to distance itself from the scandal surrounding Malaysia’s prime minister and 1MDB, the country’s troubled state investment fund,” FT reported this morning adding that “Goldman has no plans to appoint a new Southeast Asian chairman — a title that has more of an emeritus status than an operational function.”
In other words, it was Leissner’s deep connections in the region that counted and now that those connections have become a liability, so too has Leissner. Or at least that’s what it looks like.
"Goldman earned unusually large fees underwriting a series of bonds in 2012 and 2013 for the investment fund. The biggest deal was worth $3bn and earned the bank $300m — a fee many times the standard rate," FT goes on to say, recounting the details of the deals mentioned above. "The bank said the high payout was due to the risk it took since it bought the hastily arranged and unrated bonds for $2.7bn and profited by reselling them to investors at a higher price over the following months."
As WSJ reminds us, "investigations into 1MDB are also being conducted by the U.S. Federal Bureau of Investigation and authorities in Singapore, Switzerland, Hong Kong and Abu Dhabi."
One wonders if Goldman is looking to distance itself from Leissner before things get dicey.
In any event, Tim will be fine. He likely has enough stashed away to live happily ever after.
That is unless he knows something he shouldn't...