High stakes for PM Anwar in Malaysia-US tussle over custody of convicted banker Roger Ng in latest 1MDB twist
Kuala Lumpur’s determination to secure Roger Ng's quick custody appears tied to fresh efforts to push Goldman Sachs to revisit a controversial settlement reached with the previous Muhyiddin Yassin administration.
Malaysian Prime Minister Anwar Ibrahim at the launch of the state election machinery in Kedah on Jul 15, 2023. (Photo: Facebook/Anwar Ibrahim)
KUALA LUMPUR: Convicted former Goldman Sachs banker Roger Ng Chong Hwa, who played a central role in the 1Malaysia Development Bhd (1MDB) fiasco, is emerging as an unlikely pawn in a little-publicised diplomatic tug-of-war between Malaysia and the United States.
This behind-the-scenes haggling over Ng is being closely watched for a number of reasons.
It is fast shaping into the first diplomatic face-off for Prime Minister Anwar Ibrahim’s nine-month administration with Washington.
More importantly, Kuala Lumpur’s determination to secure the quick custody of Ng appears to be tied to fresh efforts to push Goldman Sachs back to the negotiation table to revisit a controversial settlement Malaysia and the US banking giant reached in July 2020 with the previous Muhyiddin Yassin administration.
“The Goldman Sachs settlement was bad from the start and the resolve Anwar is showing to get something better will only confirm that Malaysia was short-changed,” noted Mr Charles Santiago, a former three-term Member of Parliament in Malaysia who has long advocated for a review in the 1MDB settlements.
Ng, a Malaysian citizen who was extradited to the US in May 2019 under a special government-to-government arrangement, was convicted in April 2022 and just under a year later was sentenced to 10 years in prison by a US District Court.
Under the conditions of his conviction, Ng is currently on bail in the US and is only due to surrender to the authorities sometime in the first week of September to begin serving his jail sentence.
That is now uncertain.
Sometime in the second week of July, the Malaysian government issued a formal request to the US to surrender Ng so that he could face outstanding 1MDB-related charges here.
Malaysian government officials close to the situation told CNA that the request was in line with the terms in the government-to-government arrangement under the original extradition of the former Goldman Sachs banker more than four years ago.
US government prosecutors, however, are baulking. Washington wants Ng, who was convicted for conspiring with his former Goldman Sachs boss Tim Leissner and fugitive financial Low Taek Jho in the multi-billion-dollar looting of 1MDB, to serve out his jail time before he can be handed over to the Malaysian authorities.
They noted that Ng has knowledge about previously undisclosed dealings between Low and top executives of Goldman Sachs over 1MDB that could significantly strengthen Malaysia’s case for a higher settlement.
Malaysian government officials involved in the ongoing 1MDB asset recovery campaign noted that Ng, a 51-year-old finance executive who once served as the head of the Goldman Sachs office in Malaysia, has made informal representations through his lawyers that he would be ready to cooperate with Kuala Lumpur on matters related to the US banking giant.
It is unclear whether Ng has struck a legal compromise with the Malaysian government.
“The priority now is to get him (Ng) back to Malaysia and how much he can assist in the Goldman matter would be a consideration over how we in turn handle his legal troubles,” said a government official who is closely involved with a task force Mr Anwar set up to lead the 1MDB asset recovery campaign.
Marc Agnifilo, Ng’s chief legal counsel in the US who Malaysian government sources noted was in Kuala Lumpur earlier this year for discussions with senior officials from the Home Ministry, did not respond to queries submitted by CNA.
Mr Anwar, who has declared publicly the US$3.9 billion (S$5.29 billion) settlement reached between Goldman Sachs and the previous Muhyiddin Yassin administration as being far from satisfactory, has made the US banking group a major target in his government’s ongoing 1MDB asset recovery campaign.
That staggered settlement arrangement, which included an upfront payment of US$2.5 billion, is now tied down in a dispute between the two parties over milestone financial settlements for the remaining US$1.4 billion.
Earlier this week, Mr Anwar reiterated his government’s determination to pursue Goldman Sachs.
“I am not discounting the possibility of proceeding again with the lawsuits,” Mr Anwar told CNBC in an interview and added that Kuala Lumpur was considering other options, including negotiations.
The Anwar government’s particular interest in obtaining custody of Ng comes on the heels of Kuala Lumpur’s recent breakthrough when it secured the return of fugitive Jasmine Loo who was five years on the run and, like Ng, played key roles in the fund-raising of billions of dollars in 1MDB bonds arranged by Goldman Sachs.
Loo, who remains in police custody, surrendered to the Malaysian authorities on Jul 7 after reaching an undisclosed settlement deal.
AmerBon Associates, Loo’s lawyer in Kuala Lumpur, said that their client’s “priority is to cooperate with the relevant law enforcement agencies in their ongoing investigations into 1MDB, and to facilitate and assist the Malaysian government in expediting its assets recovery efforts.”
Ng was arrested in November 2018 in Malaysia and was extradited in May 2019 to face charges in New York, where he was subsequently released to home detention on a US$20 million bond.
Under the deal reached with the US at the time, Ng’s extradition was based on a temporary surrender warrant that was first capped at 10 months, with the option for extensions based on mutual agreements between the two governments.
Since his sentencing in early March, Ng has succeeded in securing deferments from the US courts to the start on him serving his jail term, which was originally set to begin on May 4.
US district judge Margo Brodie granted Ng a three-month suspension after the former banker requested for more time to spend with his daughter whom he had not seen for four years.
Earlier this month, Ng secured another one-month extension to the Aug 7 deadline to begin his jailed term when the court was informed of the ongoing negotiations between the Malaysian and US government over Kuala Lumpur’s request for custody.
Leslie Lopez is a senior correspondent at CNA Digital who reports on political and economic affairs in the region.
