Even Khazanah Nasional Bhd did not invite it to bid for work arranging a USD750 million bond sale in December. Goldman Sachs was last invited to bid on a Khazanah bond issue in 2012, though that mandate eventually went to CIMB, Deutsche Bank and JPMorgan.
Goldman Sachs has been cold-shouldered by potential clients concerned about negative publicity from its dealings with 1Malaysia Development Bhd, the state investment arm whose dealings are now the subject of probes in at least six countries.
Bloomberg data shows that work advising Malaysian clients on mergers and acquisitions, share offerings and bond issues has all but evaporated over the past few years.
So far this year, according to a Bloomberg report, Goldman Sachs ranks third for mergers and acquisitions in Malaysia.
The US bank is advising two foreign companies – Skyscanner Ltd. in the UK and Garena Interactive Holdings Ltd. in Singapore – in which Khazanah bought minority stakes.
Last year, Goldman Sachs didn’t arrange a single share sale in Malaysia. In mergers advisory involving companies from the country, it ranked 18th, behind global rivals such as HSBC Holdings Plc, JPMorgan Chase & Co. and UBS Group AG, according to Bloomberg-compiled data.
The firm had, only a few years ago, said that Malaysia offered “very positive” prospects.
“I’m not sure how long it’ll take for Goldman to recover from this,” Bloomberg quoted Ang Ser Keng, a senior lecturer in finance at the Singapore Management University as saying. “They will definitely hurt from this,” Ang said, referring to Goldman Sachs’s association with 1MDB.”
The report said the bank’s fall from grace in Malaysia stood in stark contrast with its prosperous run under Tim Leissner, the former star Goldman Sachs banker who drew many Malaysian clients to the firm and helped oversee three bond offerings for 1MDB in 2012 and 2013.
Those deals proved the turning point for the bank’s fortunes. Soon after, Goldman Sachs got unwanted publicity over the above-average fees and commissions it earned on the bond sales.
Leissner, who left Goldman in February, has been subpoenaed by the US Department of Justice in connection with its investigation into 1MDB.
The report said the deepening global fallout of the 1MDB scandal was underscored on Tuesday, when Singapore took the rare step of ordering Swiss private bank BSI SA to shut its unit in the city-state because of its ties with the 1MDB scandal.
Goldman Sachs is working with a law firm to conduct an internal examination and is reviewing its own role in helping 1MDB raise capital, according to people with knowledge of the matter. There is no indication that the firm engaged in any wrongdoing, the people said, according to the report.