A Returner’s Successful Investment Method - Chapter 642



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Episode 642. malay scandal (3)

Richman Sachs. This is a name that even people who are not particularly interested in finance have heard of at least once.

An American investment bank and comprehensive financial company with a deep history and tradition.

It is a global IB with headquarters in New York and branches in 24 countries around the world.

The number of executives and employees is approximately 30,000.

It is no exaggeration to say that it is truly a company at the center of global finance.

In fact, it is involved in most major events that occur in the financial world.

In the United States, it is easy to see Richman Sachs executives being summoned to hearings or to the National Audit Office whenever a financial accident occurs.

“Richman Sachs… … .”

Trish asked.

“What’s wrong?”

“When I was in college, I wanted to get a job there.”

Richman Sachs is truly a dream job.

“You applied for the job and were rejected?”

“no. “I couldn’t even apply.”

In fact, in the case of private equity funds or asset management companies, you can get into any position as long as you have the skills, regardless of your education or experience.

So people with all kinds of experience gather here.

Even Michael Burry of Scion Capital, who made huge profits by purchasing large amounts of CDS during the financial crisis, was originally a doctor.

On the other hand, Richman Sachs, a traditional IB, is a place where the elite of the financial elite gather.

If you are not capable enough, it is impossible to even apply.

“It would have been impossible to graduate from Korea University.”

“really? “Korea University is the most famous university in Korea.”

“hmm… … .”

Hankuk University is recognized as the best university in Korea, but… … According to global university rankings, it ranks around 60th.

In other words, there are about 60 universities in the world that are better than Korean universities.

Wouldn’t the application process be closed just for those applicants?

Trish said jokingly.

“How about applying for a job right now? “I think there’s a lot to write on your resume.”

I thought about my history(?) in the financial industry.

“It’s a bit much.”

I don’t think one book would be enough to write all of this.

Even if I summarize it, wouldn’t it be about 3,000 pages? In order to reduce the length, the family relationship should be stated as only child… … .

David said.

“Just write one line, ‘Co-CEO of Continue Capital.’”

“That’s a bit much.”

So I can’t fill the volume.

The basic idea is to create a resume and fill it in, even if it doesn’t exist in the first place.

We returned to the original story.

David said.

“There is something a little unusual about this bond issue.”

“What is it?”

“The issuance amount alone is a whopping $7 billion. At this level, we had to compete through open bidding. That way, you can reduce the fees as much as possible. Or, you can select two or three places together. However, the contract was negotiated without any bidding.”

“That’s why Richman Sachs took charge of publishing alone.”

“That’s right.”

“How much is the fee?”

“It’s not exactly clear, but our estimate is that the profit for the quarter would be more than $600 million.”

The unit of money earned is different from that of domestic securities companies.

This is the majesty of Global IB! Trish opened her mouth.

“You made that much in one transaction?”

“yes.”

I asked next.

“Is there a possibility that illegal activities such as lobbying and entertainment occurred during the bond issuance process?”

“It would be safe to say that there was a time when the process was unclear. Thanks to this, Richman Sachs achieved the highest profit of the quarter, and executives had a money party.”

In fact, those involved in the transaction received tens of millions of dollars in bonuses each.

Up to this point, it can be considered a part of sales activities.

But the real problem is this:

“The proceeds from the bond sale would have gone to Richman Sachs. So where did this money go again?”

David looked at me and asked.

“What does it mean?”

I said what I already knew as if I had expected it.

“This is my guess. Could it be that Ming Liu has been managing Prime Minister Binti Lime’s slush fund for some time? That’s why Prime Minister Binti Lime entrusted him with designing 1IDB.”

Malaysia is one of the most prosperous countries in Southeast Asia.

However, as it is still a developing country, corruption and corruption are still rampant in the political world.

There is a term called Asset Parking.

If someone living in a slum were given a Ferrari as a gift, would they want to park it in front of their house? You’ll probably want to park in a safe neighborhood and walk home separately.

Similarly, when politicians in underdeveloped and developing countries create slush funds, they want to transfer them to safe countries rather than keeping them in their own countries.

This is to avoid the risk of being tracked down and repossessed later, as you never know when something will happen.

The country where most of these slush funds flowed is Switzerland.

For this reason, Swiss banks were once called ‘personal vaults of dictators’ and ‘reservoirs of dark money.’

Prime Minister Binti Raime has been in politics for a long time and has been in power for a long time. Just looking at what happened around him, he is not a very clean politician.

If he had created a slush fund, he would have smuggled it overseas.

However, international monitoring and regulation of money laundering have recently been strengthened.

Swiss banks, which advocated secrecy, also decided to disclose the owners of secret accounts due to pressure and lawsuits from the international community.

Therefore, a more specialized method has become necessary compared to before.

Tris asked, looking at me.

“Are you saying Ming Liu helped launder Prime Minister Binti Lime’s slush funds and take them overseas?”

“Maybe. He knows the global financial system well, and his network is wide. He is praying for his son’s friend. So wouldn’t you be suited for this kind of job?”

David nodded.

“Maybe so.”

I said right away.

“In that case, 1IDB may also have been established as part of raising a slush fund. In other words, instead of using the money earned by selling bonds for investment, Ming Liu embezzled it.”

Trish was shocked.

“Is that possible?”

“It would be possible if Richman Sachs cooperated or knowingly tolerated it.”

The money from selling the bonds would have gone into the Richman Sachs account.

If Richman Sachs had allowed access to this money, Ming Liu would have been able to withdraw and spend the money as if it were a personal account.

Trish asked as if she didn’t understand.

“Why does Richman Sachs do such a thing?”

“That would have helped us get the contract.”

If the conditions had not been met, Ming Liu would have chosen another publisher.

“still… … Is that legally possible?”

“Of course it’s illegal.”

After the global financial crisis that occurred in 2008, related laws were further strengthened.

But the greed of financiers is beyond imagination.

Humans can do anything when it comes to money.

David said.

“If that is true, not only will the illegal profits be returned, but in the worst case, you may have to pay the entire bond issuance amount as a fine.”

In fact, when this incident occurred, Richman Sachs agreed to pay the largest fine in the history of the U.S. financial industry.

Trish asked.

“Are you saying that an individual embezzled $7 billion?”

“Of course, you wouldn’t have done this alone.”

All Malaysian political figures, including Prime Minister Binti Lime, will be involved.

“It’s just a guess.”

“Yes, of course.”

David said.

“But the boss seems confident.”

“yes.”

Trish asked again.

“Why?”

“After meeting Ming Liu, I felt like he was a fraud. “I have a disease where I feel traumatized just by looking at scammers.”

“Trauma? Have you ever been victimized by a scammer?”

“You’ve experienced something like that at least once in your life.”

For example, I sent money to buy a laptop at a used world cafe, but I received a brick… … .

Well, it’s not that I was harmed.

What happened to me was the Primus Fund incident.

Even now, sometimes, when I dream of that time, I wake up and think, ‘Ah! ‘Fucking dream!’ he shouts.

Maybe that’s why I can’t stand it when I see scammers.

Trish said curiously.

“Why on earth do I meet scammers every time I go to a procrastinating party?”

“Me? when?”

“I heard you also ran into Emily Chloe at a party?”

“ah… … .”

There was also the French heiress(?) thing.

For reference, she is currently on parole and is living a good life using ATube and social media.

Notoriety is also fame, and in a way, it’s like realizing your dream of becoming a celebrity.

The so-called ‘heiress scandal’ shook the New York social scene, but Emily Chloe is nothing more than a common criminal compared to Ming Liu.

All she did was try to get a $30 million loan using a false identity and false documents.

Even so, it failed and ended up being an attempt.

But this time, the scale is different.

This incident occurred about three years later.

The issue of 1IDB’s insolvency arose and Prime Minister Binti Lime’s close associates were arrested on corruption charges.

From then on, the authorities’ investigation began, but the investigation into the prime minister was not easy and dragged on for several years.

However, due to this scandal, Prime Minister Binti Lime ultimately lost the general election and failed to return to power, and a full-scale investigation began after the regime changed.

The result was shocking in itself.

One billion dollars of unidentified money was discovered in Prime Minister Binti Lime’s overseas account, and all kinds of precious metals, expensive paintings, and luxury goods were poured out of the house.

So what happened to Ming Liu?

As soon as the incident occurred, he quickly fled to Macau.

Afterwards, all of the resorts, penthouses, yachts, and supercars he owned in the United States were seized, and the amount was well over $1 billion.

Those involved were also summoned one after another.

Those who dated him, including Leon Laclair and Marina Keyes, were investigated by the authorities and had to cough up all the gifts and tea they had received.

Although it was not well known in Korea at the time, this incident was a scandal of the century.

“This might become an international scandal.”

Trish’s eyes widened at my words.

“Is it that much?”

“Maybe.”

From a reporter’s perspective, an international scandal means a scoop.

Even if it is the same incident, the ripple effect can vary greatly depending on when it occurs.

Sometimes it goes away quietly, but sometimes it causes huge repercussions.

What would happen if this incident occurred now instead of three years later?

Currently, Malaysia is facing a general election.

With everyone expecting Prime Minister Binti Lime to return to power, what if the true nature of 1IDB is revealed?

I said to David.

“Let’s learn more about Ming Liu’s recent actions and 1IDB’s fund flow.”

David nodded.

“All right.”