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FILED: NEW YORK COUNTY CLERK 07/26/2016 09:22 AM

NYSCEF DOC. NO. 1

INDEX NO. 653885/2016
RECEIVED NYSCEF: 07/26/2016

SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
-----------------------------------------------------X
PRIMUS PACIFIC PARTNERS 1, LP,
Plaintiff,

Index No. ________

against
SUMMONS
GOLDMAN SACHS GROUP, INC.,
GOLDMAN SACHS (SINGAPORE) PTE,
and TIM LEISSNER,

Plaintiffs designate New York County as
the place of the trial.
Venue is proper pursuant to CPLR § 503

Defendants.

-----------------------------------------------------X
TO THE ABOVE-NAMED DEFENDANTS:
YOU ARE HEREBY SUMMONED to answer the complaint in this action and to serve a
copy of your answer on Plaintiffs’ attorneys within twenty (20) days after the service of this
summons, exclusive of the day of service, or within thirty (30) days after the service is complete
if this summons is not personally delivered to you within the State of New York. In case of your
failure to appear or answer, judgment will be taken against you by default for the relief
demanded in the complaint.

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Dated:

New York, New York
July 26, 2016

KASOWITZ, BENSON, TORRES &
FRIE AN LLP
By:
Marc E. Kasowitz
Sheron Korpus
Sarmad M. Khojasteh
1633 Broadway
New York, New York 10019
(212) 506-1700
Attorneys for Plaintiff
Primus Pacific Partners 1, LP
TO:
Tim Leissner
2 Seaside Lane, Apartment 802
Belleair, FL 33756-1988
Tim Leissner
11 E 68th Street, Unit 8W
New York, NY 10065
Tim Leissner
269 South Beverly Drive
#1241
Beverly Hills, CA 90212-3851
Tim Leissner
c/o Jonathan Cogan, Esq.
Kobre & Kim
800 Third Avenue
New York, NY 10022
Goldman Sachs Group, Inc.
200 West Street
New York, NY 10282
Goldman Sachs (Singapore) Pte,
I Raffles Link #07-01
One Raffles Link Singapore 039393

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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
-------------------------------------------------------------------x
PRIMUS PACIFIC PARTNERS 1, LP,
:
:
Plaintiff,
:
:
- against :
:
:
GOLDMAN SACHS GROUP, INC.,
:
GOLDMAN SACHS (SINGAPORE) PTE, and
:
TIM LEISSNER,
:
:
Defendants.
:
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Index No. ___________

COMPLAINT

Plaintiff PRIMUS PACIFIC PARTNERS 1, LP (“Primus”), for its complaint against
defendants THE GOLDMAN SACHS GROUP, INC. (“GSG”), GOLDMAN SACHS
(SINGAPORE) Pte (“GSS”) and TIM LEISSNER (“Leissner,” and together with GSG and GSS,
“Goldman Sachs”), alleges as follows:
PRELIMINARY STATEMENT
1.

This action arises from Goldman Sachs’s egregious and fraudulent betrayal and

breach of its duties as financial advisor to the EON Capital Sdn. Bhd. (“EON Capital” or the
“Company”), a Malaysian bank of which Primus was the largest shareholder, in connection with
the Board’s evaluation of and response to a bid in December 2009 by Hong Leong Bank
(“HLB”), another Malaysian bank, to acquire EON Capital.
2.

Goldman Sachs, led by Leissner, a Managing Director of GSG, fraudulently

induced the Board of Directors of EON Capital (the “Board”), including Primus’s designee on
the Board, to retain it as financial advisor by misrepresenting and concealing its disabling
conflicts of interest arising from its existing and prospective business interests in Malaysia.
Among other things, Goldman Sachs misrepresented to and concealed from the Board its close

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relationship and incentive to curry favor with the Prime Minister of Malaysia (the “Prime
Minister”), who in turn, had close family and business ties with HLB and others with an interest
in the success of HLB’s bid for EON Capital, even at the expense of and to the detriment of EON
Capital and its shareholders, including Primus. Specifically, Goldman Sachs was the key advisor
to the Malaysian-government investment fund established by the Prime Minister called
1Malaysia Development Bhd. ("1MDB") before, during and after the time Goldman Sachs acted
as advisor to the Board of EON Capital. Further, Leissner, on behalf of and in his capacity as
Managing Director of Goldman Sachs, repeatedly engaged in misconduct in connection with
1MDB, before, during and after the EON Capital engagement, to curry favor with the Prime
Minister.
3.

Goldman Sachs then proceeded to secretly curry favor with the Prime Minister by

using the Board’s confidential information to conspire with and position HLB to submit a
successful bid to acquire EON Capital, which Goldman Sachs convinced the Board was fair,
even though Goldman Sachs knew that the bid in fact was well below the fair intrinsic value of
the Company. Goldman Sachs’s egregious misconduct here apparently was part of a broad
pattern of corruptly winning favor with the Prime Minister in order to further Goldman Sachs’s
business opportunities in Malaysia -- corruption which, the Wall Street Journal recently reported,
is the subject of investigations by the Federal Bureau of Investigation in New York and U.S.
Department of Justice and led to Goldman Sachs firing Leissner from his position as a Managing
Director.
4.

In January 2010, Goldman Sachs, in fraudulently inducing the Board, including

Primus’s designee on the Board, to retain it as a financial advisor, expressly represented to the
Board that it had no conflicts preventing it from acting as financial advisor to EON Capital in

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connection with the HLB takeover bid. In fact, however, Goldman Sachs was intractably
conflicted by virtue of its relationship with the Prime Minister, whose brother was a board
member of HLB itself; and whose other brother was the Chairman of the CIMB Group
(“CIMB”), the investment firm advising HLB on the bid. Had Goldman Sachs’s conflicts been
known, the Board would not have engaged it as financial advisor for the HLB takeover bid.
5.

Initially, in January 2010, Goldman Sachs advised that the HLB takeover bid was

unfair and below the fundamental value of EON Capital. As the financial advisor to the
Company, Goldman Sachs, having been at Board meetings, obtained the Board’s confidential
information concerning the HLB takeover bid, including, but not limited to, the views of each
Board member and certain major shareholders with respect to the offer from HLB, the floor price
at which Board members would approve a sale of EON Capital, and the identity of other
potential suitors for EON Capital. Now, armed with the Board’s confidential information, aware
that the Prime Minister preferred the approval of the HLB bid by the Board, and confident that
the Board would follow its advice and recommendation, Goldman Sachs set out to win favor
with the Prime Minister by improperly using and disclosing this confidential information to HLB
in order to position HLB to submit a revised offer to the Board.
6.

Thereafter, in April 2010, HLB, employing the Board’s confidential information

provided to it by Goldman Sachs, submitted a revised offer providing for a mere 2.8% increase
over its initial offer, which remained woefully deficient relative to the valuation of the Company
that Goldman Sachs provided to the Board in January 2010. However, again in furtherance of its
scheme to curry favor with the Prime Minister, Goldman Sachs now provided the Board with a
new, much lower valuation and advised the Board that the second HLB offer was fair and should
be accepted. Under the cover of Goldman Sachs’s advice, the Board (with Primus’s designee

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dissenting) accepted the second HLB offer and recommended that shareholders approve it -advice that a majority of the shareholders followed. Thus, as a result of Goldman Sachs’s fraud
and breach of fiduciary duties, the price at which HLB acquired EON Capital was hundreds of
millions of dollars below fair value. Indeed, no unconflicted investment bank could have found
the second HLB offer fair or recommended that the Board accept it.
7.

As a result of Goldman Sachs’s fraud, shareholders approving HLB’s takeover

bid were unaware of critical facts that, if known, would have precluded approval of the HLB
offer. Specifically, shareholders were unaware of the existence of Goldman Sachs’s conflicts,
were unaware of Goldman Sachs’s reversal of advice and materially differing assessments of fair
value and valuation analyses, and were unaware of Goldman Sachs’s inability to provide
objective financial advice concerning the second HLB offer.
8.

Primus became aware of Goldman Sachs’s fraud only in March 2016 from press

reports that revealed previously unknown business and personal relationships and extensive
dealings between Leissner, on behalf of Goldman Sachs, and the Prime Minister. The extensive
dealings between Goldman Sachs and the Prime Minister reportedly have become the subject of
investigative probes in several countries. Among other things, on July 20, 2016, the U.S.
Department of Justice filed several civil forfeiture complaints seeking the forfeiture and recovery
of more than $1 billion in assets associated with an international conspiracy to launder funds
misappropriated from 1MDB. The complaints allege, among other things, that (i) Goldman
Sachs’s involvement with the Prime Minister, 1MDB and its officials dated back to at least as
early February 2009, (ii) disclosures related to various bonds issued by 1MDB and underwritten
by Goldman Sachs contained material misrepresentations and omissions, and (iii) hundreds of
millions of dollars in proceeds from the bonds issued by 1MDB and underwritten by Goldman

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Sachs were misappropriated. Additionally, law enforcement and regulatory agencies reportedly
are investigating the propriety of Goldman Sachs’s conduct in raising an estimated USD 6.5
billion in bonds for 1MDB for which Goldman Sachs received reportedly excessive fees of about
USD 590 million in 2012 and 2013, and acting as advisor to the board of 1MDB on various asset
acquisitions at reportedly excessive prices in 2012. Two days after capital was raised by
Goldman Sachs in 2012, USD 681 million reportedly was transferred by an entity linked to
1MDB into the Prime Minister’s private Malaysian bank account. The 1MDB scandal is the
focus of probes in at least seven countries, including in Malaysia by the nation's anticorruption
body, central bank, auditor general and a parliamentary committee. The media also reported on
an investigation by the FBI in New York and the U.S. Department of Justice on whether
Goldman Sachs misled bondholders when Goldman Sachs sold securities issued 1MDB.
According to media reports, Leissner has since been dismissed by Goldman Sachs as a result of
such misconduct
9.

Because EON Capital was acquired in a cash-out merger and wound up following

the sale of its assets and liabilities, Primus, as a former shareholder of EON Capital, has standing
to recover its share of the compensatory damages Goldman Sachs’s misconduct caused.
Accordingly, Primus now brings this action to recover over $170 million in compensatory
damages -- the losses caused to Primus by Goldman Sachs’s misconduct -- and $340 million in
punitive damages.
JURISDICTION AND VENUE
10.

This Court has personal jurisdiction over GSG and GSS pursuant to CPLR § 301,

as GSG is domiciled in New York State, and GSG operates GSS as its controlled subsidiary and
Singapore office. Leissner is subject to the Court’s jurisdiction by virtue of his residence in New
York.
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11.

Venue is proper pursuant to CPLR § 503, as one or more parties reside in New

York County.
THE PARTIES
12.

Plaintiff Primus is an exempted limited partnership organized under the laws of

the Cayman Islands.
13.

Defendant GSG is a financial holding company that provides global banking,

securities and investment management services in the United States and internationally. GSG is
incorporated under the laws of the State of Delaware with its principal office in New York, New
York.
14.

Defendant GSS is a wholly-owned subsidiary of the Goldman Sachs Group, Inc.,

organized under the laws of Singapore with its principal office in Singapore. GSS operates as
GSG’s department in Singapore and thus is subject to the jurisdiction of this Court by virtue of
GSG’s presence in New York. GSS is financially dependent on GSG and would not exist but for
its relationship with GSG. GSS’s executive leadership is selected by GSG and is comprised of
GSG employees. GSG controls GSS’s marketing and operations. GSS is listed as an office of
GSG on the company’s website (http://www.goldmansachs.com/who-weare/locations/index.html (last visited on July 25, 2016)); its employees are listed in the “Meet
Our People” page of GSG’s website
(http://www.goldmansachs.com/careers/blog/posts/goldman-sachs-singapore-kimtechnology.html (last visited July 25, 2016)); and its job vacancies are advertised and listed on
the “Careers” section of GSG’s website
(http://www.goldmansachs.com/a/data/jobs/asia_except_japan.html (last visited on July 25,
2016)). Moreover, as the Goldman Sachs Group’s Annual Report for 2010 states, (i) Goldman
Sachs is “headquartered in New York and maintains offices . . . around the world”; (ii) “[w] hen
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we use the terms ‘Goldman Sachs,’ ‘the firm,’ ‘we,’ ‘us,’ and ‘our,’ we mean [GSG] and its
consolidated subsidiaries”; (iii) “[d]ue to the highly integrated nature of international finance
markets, the firm manages its business based on the profitability of the enterprise as a whole,”
and (iv) GSS is identified as one of GSG’s offices.
15.

Defendant Leissner was a Managing Director of GSG and Co-President of GSS.

Leissner owns a residence in New York, New York.
FACTS
I.

Background
16.

EON Bank Berhad (“EON Bank”) is a Malaysian banking and finance company.

As of June 2010, EON Bank was the seventh largest domestic bank in Malaysia in terms of total
assets (about USD 17.5 billion), engaged in a wide range of retail and business banking
activities, possessed a distribution network comprised of 141 branches, and served a large
customer base of more than 1.4 million customer accounts.
17.

As of January 2010, EON Bank was wholly-owned by EON Capital, a publicly

listed company with a total assets at the time of the HLB takeover bid of about USD 16.6 billion.
18.

Primus was the single largest shareholder of EON Capital and controlled

approximately 20% of the shares of EON Capital.
19.

The Board of EON Capital consisted of seven persons, four of whom were

independent directors. The non-independent directors included a designee of Primus.
II.

EON Capital Receives Unsolicited Offer From HLB
20.

On December 17, 2009, HLB, a Malaysian Bank and competitor of EON Capital,

announced that it had received approval from Malaysian regulators to initiate negotiations with
“certain shareholders” of EON Capital to acquire the assets and liabilities of EON Capital in
what amounted to an unsolicited hostile takeover bid for the Company.
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21.

HLB retained CIMB, a prominent investment bank headquartered in Malaysia, to

advise HLB in connection with its takeover bid.
22.

On December 23, 2009, HLB sent a letter to EON Capital informing it that HLB

was seeking to purchase all assets and liabilities of EON Capital.
III.

The Board Of EON Capital Engages Goldman Sachs As Financial Advisor
23.

On December 31, 2009, the Board held a meeting to discuss HLB’s letter and the

engagement of financial advisors to advise and assist the Board in connection with HLB’s
takeover bid. At the meeting, presentations were made to the Board by Goldman Sachs, Citibank
and Morgan Stanley.
24.

During Goldman Sachs’s presentation, Leissner, on its behalf, represented to the

Board that Goldman Sachs had “[u]nrivalled [g]lobal and Asia FIG [e]xpertise” and identified 42
transactions throughout Asia on which it had advised. Goldman Sachs also stated that EON
Capital “needs to be guided appropriately to carry out its fiduciary duties with respect to all
domestic and international shareholders” and represented that Goldman Sachs was capable of
providing such guidance to the Board free of bias, conflicts or divided loyalties.
25.

Goldman Sachs’s presentation identified as “Senior Oversight” David Ryan, who,

at the time, held the position of Chairman and Co-President for GSG’s Southeast Asian
Operations and Managing Director of GSG; defendant Leissner, who, at the time, held the
position of Managing Director of GSG and Co-President of GSS; Richard Campbell-Breeden,
who, at the time, held the position of Managing Director at GSG and Head of Mergers &
Acquisitions for GSS’s Asia Excluding Japan Operations; and Doug Feagin, who, at the time,
held the position of Managing Director of GSG and Head of the Financial Institutions Group
(“FIG”) for GSG’s Asia Excluding Japan Operations.

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26.

The Goldman Sachs presentation touted Goldman Sachs’s “[u]nrivalled [g]lobal”

expertise, listing Goldman Sachs’s position as “#1 Global FIG M&A Advisor” and “#1 Global
FIG Equity/Equity-Linked.” Likewise, the Goldman Sachs presentation referred to and listed
advisory work performed by other Goldman Sachs offices in Southeast Asia other than GSS.
27.

As reflected in the minutes of the Board meeting, a Primus representative

specifically asked “whether Goldman Sachs has any conflict of interests on the transaction in
view of its previous assignments,” and in response, “Goldman Sachs confirmed that they have no
conflict of interest on the transaction.”
28.

Thereafter, on January 4, 2010, in reliance on the representations made to it by

Goldman Sachs at the December 31 meeting of the Board, the Board retained Goldman Sachs as
financial advisor to EON Capital. Goldman Sachs and the Board entered into a January 4, 2010
engagement letter (“January Engagement Letter”), pursuant to which Goldman Sachs’s services
included, among other things: (i) “[a]ssisting [EON Capital] with strategic review analysis,
which includes assessing the merits and desirability of each strategic option”; (ii) “[a]ssisting
[EON Capital] in forming a view towards . . . a fair intrinsic valuation based on the Company’s
projections”; (iii) [f]ormulating [EON Capital]’s tactical and strategic approaches in response to
any offer received”; and (iv) [a]ssisting [EON Capital] in the evaluation and negotiation of the
proposal[s] received.” Goldman Sachs also acknowledged that it “will engage with shareholders
to communicate the view of management and the board as it relates to valuation” and “[e]stablish
fair and reasonable parameters to measure the attractiveness of any proposal[s].”
29.

Goldman Sachs again represented to the Board in the January Engagement Letter

that it did not have any conflicts of interest that would prevent it from taking on the engagement
with EON Capital or that would compromise the objectivity of its analysis and recommendations

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to the Board: “[W]e are pleased to confirm that we have no conflict at this point in accepting
this mandate.”
30.

Goldman Sachs understood and intended that Primus and other members of the

Board would rely on its representations at the December 31 Board meeting and in the January
Engagement Letter when determining to retain it as a financial advisor.
31.

The January Engagement Letter also contained a forum selection clause and

choice of law provision providing that “all matters arising out of or in connection with this letter
(whether in contract, tort or otherwise) shall be governed by and construed in accordance with
the laws of the State of New York, and that, in connection with any legal proceedings arising
with respect to this agreement, [EON Capital] hereby irrevocably submits to the exclusive
jurisdiction of the United States District Court for the Southern District of New York and of any
state court located in the City of New York, and agrees to venue in such courts.”1
32.

On January 14, 2010, at a meeting of the Board, Goldman Sachs’s appointment as

financial advisor was discussed, and an independent director informed the Board that “Goldman
Sachs has also agreed that during the course of its assignment, it will work exclusively for [EON
Capital] and will not take on another assignment in the bank sector in Malaysia unless it has first
sought (on a no-name basis) and obtained [EON Capital]’s approval in writing.”

1

As an integral part of Goldman Sachs’s scheme, Goldman Sachs, in an effort to evade detection of its fraud,
later coerced the Board to enter into a second engagement letter, which contained a forum selection clause intended
to limit Goldman Sachs’s liability for its misconduct.

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IV.

Goldman Sachs’s Representations Concerning Its Conflicts Were False
33.

Goldman Sachs’s statements and representations to the Board at the December 31

Board meeting, in the January Engagement Letter and at the January 14, 2010 Board meeting
that it did not have any conflicts and would work exclusively for EON Capital were false, and
Goldman Sachs knew they were false, at the time that they were made.
34.

In fact, Goldman Sachs maintained a close relationship with the Prime Minister,

who in turn, had close family and business ties with HLB and others with an interest in the
success of HLB's bid, even at the expense of and to the detriment of EON Capital and its
shareholders, including Primus. Specifically, since February 2009, Goldman Sachs had acted as
a key advisor to 1MDB, a strategic Malaysian state fund established and led by the Prime
Minister. As reported in 2016 by the Wall Street Journal, defendant Leissner, Goldman Sachs’s
top banker in Southeast Asia, was particularly “close” to the Prime Minister.2 Unbeknownst to
the Board of EON Capital, because of Goldman Sachs’s relationship with the Prime Minister,
and its desire to expand that business, Goldman Sachs had every incentive to push through the
HLB acquisition of EON Capital and vitiated its ability to provide objective analyses and
recommendations to the Board. Indeed, the Prime Minister stood to benefit from the HLB
acquisition of EON Capital based on familial and business relationships he had with certain
parties interested in the transaction, whose interests were contrary to EON Capital’s.
35.

One of the Prime Minister's brothers, Nazim Razak, served on the Board of

Directors of HLB, the bank bidding to acquire EON Capital.

2

Mia Lamar in Hong Kong and Bradley Hope and Justin Baer in New York, U.S. Examines Goldman Sachs
Role in 1MDB Transactions, Wall St. J. (Oct. 14, 2015), http://www.wsj.com/articles/goldman-entangled-inmalaysia-fund-scandal-1444795262 (last visited on July 25, 2016).

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36.

Another brother of the Prime Minister, Nazir Razak, was the Chairman of the

Board of Directors, Chief Executive Officer and Managing Director of CIMB, the investment
firm advising HLB on its offer to acquire EON Capital.
37.

Goldman Sachs viewed the EON Capital engagement as an opportunity to curry

favor with the Prime Minister in order to continue to secure lucrative business opportunities in
Malaysia. By exploiting Goldman Sachs’s role as financial advisor to EON Capital, Goldman
Sachs also sought to forge ties with Malaysia’s most prominent financial players.
38.

The Goldman Sachs relationship with the Prime Minister and 1MDB indeed

proved extremely lucrative. After the Prime Minister provided Goldman Sachs with a license to
operate within Malaysia in 2009, from 2010 to 2015, Goldman Sachs became the top foreign
advisor in the country, working on USD 18.8 Billion in Malaysian mergers and acquisitions. In
2012 and 2013, Goldman Sachs arranged three bond sales with 1MDB totaling USD 6.5 billion,
which reportedly netted Goldman Sachs excessive fees of approximately USD 593 million.
During this time frame, Leissner also rose to become one of the highest paid bankers at Goldman
Sachs.
39.

The extent of Goldman Sachs’s relationship with the Prime Minister was not

disclosed to EON Capital, its Board or its shareholders.
V.

Goldman Sachs Determines The First HLB Offer
Is Far Below The Fundamental Value Of EON Capital
40.

On January 21, 2010, EON Capital received an offer from HLB to acquire the

assets and liabilities of EON Capital. HLB offered to acquire all assets and liabilities of EON
Capital at an aggregate purchase price of RM4,921,781,997.20 (RM7.10 per share), or
approximately USD 1.6 billion.

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41.

On January 22, 2010, EON Capital held a special meeting of the Board to discuss

the HLB offer. At the meeting, Leissner, on behalf of Goldman Sachs, provided an update to the
Board as to its valuation of EON Capital. Leissner informed the Board that HLB’s proposed
price of RM 7.10 per share was below the fundamental value of EON Capital/EON Bank, and he
advised that the Board respond to HLB that the price was below the threshold price. Based on
Goldman Sachs’s advice, the Board, at the time, decided not to accept the HLB offer.
42.

On January 25, 2010, the Board again convened a meeting at which Leissner, on

behalf of Goldman Sachs made a detailed presentation concerning its valuation of EON Capital.
Goldman Sachs outlined four valuation methodologies and the corresponding valuations, which
are set forth below:
Valuation Methodology
Discounted dividend model
based on Company’s
projections and including
value adjustments
Discounted dividend model
based on the Company’s
projections and adjusted
for 20% synergies
Precedent FIG transactions
in Malaysia
Current trading multiples
of comparable companies
43.

Preliminary Valuation
Parameter
RM8.00 – RM10.18

Implied P/B

RM11.15 – RM14.26

2.2x – 2.8x

RM10.36 – RM16.058

2.0x – 3.1x

RM8.81 – RM12.95

1.7x – 2.5x

1.5x – 2.0x

In connection therewith, Goldman Sachs stated that the cash offer of RM7.10 per

share was significantly less than the underlying value of EON Capital, which ranges from
RM8.00 to RM10.18 per share, and that for the purposes of negotiations with HLB, the valuation
that factored in synergies (i.e., RM11.15 to RM14.26 per share) should be used (“Goldman
Sachs’s First Valuation”).

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44.

On February 2, 2010, the Board again resolved not to accept the HLB offer. In so

doing, the Board relied on Goldman Sachs’s valuation and assessment of the offer.
VI.

Goldman Sachs Determines To Exploit The Board’s
Confidential Information To Curry Favor With The Prime Minister
45.

By virtue of its role as financial advisor to the Board and its attendance at the

Board meetings, Goldman Sachs had sought and obtained confidential information from the
Board. At the same time, Goldman Sachs knew that the Prime Minister preferred approval of the
HLB bid by the Board, as it would enrich his brothers through their positions at HLB and CIMB.
Thus, Goldman Sachs, now armed with the Board’s confidential information -- including the
views of each Board member and certain major shareholders with respect to the offer from HLB,
the floor price at which Board members would approve a sale of EON Capital, and the identity of
other potential suitors for EON Capital -- and confident that the Board would follow its advice
and recommendation, determined to exploit its position as the Board’s financial advisor to
effectuate HLB’s acquisition of EON Capital on terms that were advantageous to HLB and
materially identical to those which Goldman Sachs had previously determined were unfair to
EON Capital.
46.

Therefore, in order to curry favor with the Prime Minister, Goldman Sachs sought

to secure the Board’s approval of the HLB bid.
VII.

HLB Presents A Marginally Improved Offer To EON Capital
47.

On April 1, 2010, HLB, armed with the EON Capital confidential information it

received from Goldman Sachs, submitted a revised offer, increasing the price per share from
RM7.10 to RM7.30 per share, a mere 2.8% increase, while simultaneously introducing, as part of
the offer, non-price terms that were detrimental to EON Capital. The Board requested that

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Goldman Sachs review the revised HLB offer and provide a recommendation as to how to
proceed.
VIII. Goldman Sachs Reverses Itself And Endorses Second HLB Offer
48.

On April 2, 2010, the Board convened to discuss whether to accept the second

HLB offer. At the meeting, the Board determined that it should hear the views of Goldman
Sachs, its financial advisor, before making any decision.
49.

Leissner, on behalf of Goldman Sachs, then made a presentation to the Board as

to Goldman Sachs’s assessment of the valuation and its recommendation. Leissner
acknowledged that the second HLB offer represented an increase of only 2.8% from the earlier
increase and presented its views on the offer -- far less than the RM11.15 to RM14.26 per share
that Goldman Sachs, just weeks earlier, had stated should be used in evaluating any offers -- but,
nevertheless, concluded that the offer was fair. Given that the second HLB offer had not
increased materially, in order to give its favorable recommendation the veneer of plausibility,
Goldman Sachs adjusted the reference valuation metrics downwards materially. Goldman Sachs
also did not provide an opinion on the newly introduced detrimental non-price terms of the
second HLB offer. By advising the Board to accept HLB’s acquisition of EON Capital -- an
outcome that Goldman Sachs knew was preferred by the Prime Minister as it would enrich the
Prime Minister’s brothers through their positions at HLB and CIMB -- Goldman Sachs sought to
curry favor with the Prime Minister.
50.

These revised and substitute metrics (“Goldman Sachs’s Second Valuation”) were

as much as 45% lower than those that it had endorsed just weeks earlier when it had advised that
HLB’s original offer did not offer a fair value for EON Capital’s stock:

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Metrics
Dividend Discount Model
Based On Management
Projections
Dividend Discount Model
Based On Synergies
Dividend Discount Model
Based On Research
Projection
Precedent Transactions
Current Trading Multiples

January GS Valuation
(RM)
8.00 – 10.18

April GS Valuation (RM)

11.15 – 14.26

N/A

N/A

6.30 – 7.98

10.36 – 16.06

7.69 – 11.28

8.81 – 12.95

7.02 – 10.77

7.83 – 10.10

51.

Nevertheless, Goldman Sachs advised the Board that the offer was fair.

52.

Based on Goldman Sachs’s advice and Goldman Sachs’s Second Valuation,

members of the Board found the second HLB offer to be “credible,” and the Board accepted the
second HLB offer and commenced the process of preparing the Circular. But for Goldman
Sachs’s recommendation, the Board would not have accepted the second HLB offer and would
not have recommended that shareholders approve it.
53.

At the time, certain Board members stated that it was necessary to tell the public

that the independent directors decided to present the offer to shareholders based on Goldman
Sachs’s advice.
IX.

Impartial Observers Alert Management At Goldman Sachs
To Misconduct By The Firm
54.

Goldman Sachs’s misconduct did not go unnoticed. On May 19, 2010, an

anonymous email was sent to Douglas Feagin, the Head of Financial Institutions Group Asia ExJapan (Hong Kong) at Goldman Sachs. The email sought to “inform and alert [Feagin] that your
team in Kuala Lampur may inadvertently be exposing themselves and the firm to a number of
significant risks.” The email identified Goldman Sachs’s “complete reversal” in recommending

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that the Board accept the second HLB offer based on “valuation ranges that had inexplicably
been moved downwards through the inclusion of transactions that occurred over 10 years ago,
involving institutions that were either severely troubled, or forced to merge by regulators
intending to prevent them from entering receivership,” and the “[d]ramatic change in valuation
and reversal in overall recommendation in a matter of weeks, despite marginal improvement of
the offer price and significant worsening of offer terms and conditions.”
55.

The email cautioned Feagin that “the GS Team may be exposing themselves and

the firm to undesirable, potentially embarrassing and expensive consequences, especially given
the legal challenges that your firm currently face in the U.S.”
56.

The anonymous email spurred an internal investigation led by a New York-based

legal team, during which all members of the Goldman Sachs team, including Leissner, were
interviewed and questioned about the allegations set forth in the email.
X.

HLB Acquires The Assets And Liabilities Of EON Capital
57.

On September 27, 2010, the second HLB offer was approved by shareholders of

EON Capital. Thereafter, as a part of the transaction, all of the shareholders of EON Capital,
including Primus, were forced to relinquish their shares in exchange for payment.
58.

On September 23, 2011, EON Capital was delisted as a company.

59.

Following HLB’s acquisition, EON Capital no longer has any assets or

shareholders.
XI.

More Than Five Years Later, Primus Learns Of Goldman Sachs’s
Duplicity And Fraud From Press Reports Concerning The 1MDB Scandal
60.

Nearly five years after the consummation of the sale of EON Capital, Primus

learned facts that made it clear that Goldman Sachs had committed a fraud and breached its
fiduciary duties to EON Capital and the Board.
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61.

Through various press reports in March 2016, Primus became aware of Goldman

Sachs’s fraud. The reports revealed the previously unknown close business and personal
relationship between Leissner, on behalf of Goldman Sachs, and the Prime Minister. The media
reporting revealed that 1MDB, led by the Prime Minister, acquired a number of assets at
reportedly controversial valuations, whereby Goldman Sachs, as an advisor to the board of
1MDB, provided cover to create the appearance of legitimacy and fairness. According to
reports, former Goldman Sachs executives have stated that corruption was common in many
developing markets and the bank couldn't do business there without interacting with people and
organizations that were potentially corrupt.3
62.

The media reports further reported that Goldman Sachs -- in particular, Leissner --

and the Prime Minister had extensive dealings, including the extension by the Prime Minister of
a license to Goldman Sachs to operate in Malaysia in 2009 and Goldman Sachs raising an
estimated USD 6.5 billion in bonds for 1MDB reportedly earning the firm excessively high fees
of about USD 590 million in 2012 and 2013. The media further reported that Leissner, on behalf
of and in his capacity as Managing Director of Goldman Sachs, had repeatedly engaged in
misconduct in connection with 1MDB to curry favor with the Prime Minister and has since been
dismissed by Goldman Sachs as a result of such misconduct.
63.

The reporting further reveals that the CIMB Group, which advised HLB on its

takeover bid, is also a part of the 1MDB scandal. Specifically, the Chairman of the CIMB
Group, Nazir Razak, the Prime Minister's youngest brother, is being investigated in connection

3

Justin Baer, Tom Wright and Bradley Hope, Goldman Probed Over Malaysia Fund 1MDB, Wall St. J.
(June 7, 2016), http://www.wsj.com/articles/goldman-probed-over-malaysia-fund-1465257383 (last visited on July
25, 2016).

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with approximately USD 7 million that was transferred to his private account from the private
accounts of the Prime Minister.
64.

The 1MDB scandal is the focus of probes in at least seven countries, including in

Malaysia by the nation's anticorruption body, central bank, auditor general and a parliamentary
committee. According to the media reports, the extensive dealings between Goldman Sachs and
1MDB and the close business and personal relationship between Leissner, on behalf of Goldman
Sachs and the Prime Minister, have become the subject of investigative probes by the FBI in
New York and the U.S. Department of Justice, each of which are investigating Goldman Sachs’s
role in transactions with 1MDB as part of a broad probe into allegations of money laundering
and corruption, and that, as a part of the investigation, U.S. authorities have subpoenaed
Leissner.4 On July 20, 2016, the U.S. Department of Justice filed several civil forfeiture
complaints seeking the forfeiture and recovery of more than $1 billion in assets associated with
an international conspiracy to launder funds misappropriated from 1MDB. The complaints
allege, among other things, that (i) Goldman Sachs’ involvement with the Prime Minister, 1MDB
and its officials dated back to at least as early February 2009, (ii) disclosures related to various
bonds issued by 1MDB and underwritten by Goldman Sachs contained material
misrepresentations and omissions, and (iii) hundreds of millions of dollars in proceeds from the
bonds issued by 1MDB and underwritten by Goldman Sachs were misappropriated. According
to media reports, the FBI and Department of Justice also are investigating, among other things,
whether Goldman Sachs misled bondholders when Goldman Sachs sold securities issued by

4

Mia Lamar in Hong Kong, and Bradley Hope and Justin Baer in New York, U.S. Examines Goldman Sachs
Role in 1MDB Transactions, Wall St. J. (Oct. 14, 2015), http://www.wsj.com/articles/goldman-entangled-inmalaysia-fund-scandal-1444795262 (last visited on July 25, 2016); Ken Brown, Ex-Goldman Sachs Banker
Subpoenaed in U.S. Probe of 1MDB, Wall St. J. (Mar. 8, 2016), http://www.wsj.com/articles/ex-goldman-sachsbanker-subpoenaed-in-u-s-probe-of-1mdb-1457415095 (last visited on July 25, 2016).

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1MDB and whether Goldman Sachs failed to comply with the U.S. Bank Secrecy Act, which
requires a financial institution to report suspicious transactions to regulators.5
65.

According to the press reports, the 1MDB scandal has led to an internal

investigation at Goldman Sachs in New York as well. According to the Wall Street Journal,
“Goldman quietly began its own inquiry into Mr. Leissner’s role.”6 The Wall Street Journal
further reported that Goldman Sachs suspended Leissner in January 2016 after an internal
investigation unearthed an email containing an unauthorized reference letter that Leissner sent to
a bank on behalf of a Malaysian financier with close ties to the Prime Minister and 1MDB in
which he represented that Goldman Sachs had vetted the financier and done business with him.7
According to the press reports, Goldman Sachs never conducted any diligence on the financier.
FIRST CAUSE OF ACTION
(Fraud As Against All Defendants)
66.

Primus repeats and re-alleges paragraphs 1 through 65 hereof as though fully set

forth herein.
67.

Defendant GSG, acting with and through its affiliate defendant GSS under the

“Goldman Sachs” trade name, and defendant Leissner, knowingly or recklessly represented to
the Board that Goldman Sachs did not have any conflicts of interest when it advised the Board,

5

Justin Baer, Tom Wright and Bradley Hope, Goldman Probed Over Malaysia Fund 1MDB, Wall St. J.
(June 7, 2016), http://www.wsj.com/articles/goldman-probed-over-malaysia-fund-1465257383 (last visited on July
25, 2016).
6

Justin Baer and Ken Brown, Goldman Adviser to 1MDB, Tim Leissner, Quit After Alleged Bank-Policy
Violations, Wall St. J. (Mar. 8, 2016), http://www.wsj.com/articles/goldman-adviser-to-1mdb-quit-after-allegedbank-policy-violations-1457419373 (last visited on July 25, 2016).
7

Justin Baer and Bradley Hope, Fed Warned Goldman on Malaysia Bond Deals, Wall St. J. (Apr. 6, 2016),
http://www.wsj.com/articles/fed-warned-goldman-on-malaysia-bond-deals-1459974246 (last visited on June 17,
2016).

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including Primus’s designee on the Board, that it could act as its international financial advisor
with respect to the offer to acquire EON Capital from HLB.
68.

In fact, defendants knew these representations were false and/or misleading at the

time they were made, or made such representations recklessly without knowledge of their truth
or falsity. Goldman Sachs had a clear and indisputable conflict by way of its close business
relationship with the Prime Minister, who maintained several familial and business relationships
with the principals, who were involved with and stood to benefit substantially from the HLB
takeover bid.
69.

In reasonable reliance on defendants’ misrepresentation and omissions concerning

its conflicts of interests, and its concealment from the Board of its relationship to HLB and the
Prime Minister, EON Capital retained Goldman Sachs as its financial advisor.
70.

Based on Goldman Sachs’s advice and relying on Goldman Sachs’s First

Valuation, the Board rejected HLB’s initial offer.
71.

Based on Goldman Sachs’s advice and relying on Goldman Sachs’s Second

Valuation, the Board accepted the HLB revised offer. Although it objected, Primus was bound
by the vote of the Board and majority of shareholders.
72.

As a result of Goldman Sachs’s fraud, members of the Board and shareholders

approving the second HLB offer were unaware of critical facts that, if known, would have made
approval of the HLB’s takeover bid impossible. Members of the Board and shareholders were
unaware of the existence of Goldman Sachs’s conflicts and were unaware of Goldman Sachs’s
inability to provide objective financial advice concerning HLB’s takeover bid.
73.

As a direct and proximate result of defendants’ misrepresentations, Primus has

been damaged and is entitled to recover compensatory damages in an amount to be determined at

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trial of at least $170 million, as well as punitive damages in an amount to be determined at trial
of at least $340 million.
SECOND CAUSE OF ACTION
(Breach of Fiduciary Duty As Against All Defendants)
74.

Primus repeats and re-alleges paragraphs 1 through 73 hereof as though fully set

forth herein.
75.

Defendant GSG, acting with and through its affiliate defendant GSS under the

“Goldman Sachs” trade name, and defendant Leissner, acted as financial advisor to the EON
Capital in connection with the offer by HLB to acquire the assets and liabilities of the Company.
As the financial advisor to the Board and the Company, Goldman Sachs owed a fiduciary duty to
Primus, as a member of the Board and large shareholder of EON Capital, to, among other things,
act with the utmost good faith, fidelity, undivided loyalty, and impartiality. These duties
required Goldman Sachs to provide accurate information to the Board so it could make an
informed decision on the merits of the offer from HLB.
76.

Goldman Sachs breached its fiduciary duties by, without limitation, using the

Board’s confidential information to position HLB to re-submit its offer to acquire EON Capital;
advising that the offer from HLB was fair, that it should be accepted by the Board, and that the
Board should recommend that shareholders approve it when Goldman Sachs knew the offer to be
unfair and insincere; failing to deal with Primus and other members of the Board in utmost good
faith, failing to refrain from dual agency; failing to disclose its relationships to other interested
parties; and failing to disclose to Primus and EON Capital’s other Board members and
shareholders all facts within its knowledge that were material to the second HLB offer and
Goldman Sachs’s recommendations with respect thereto.

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77.

As a direct and proximate result of Goldman Sachs’s breach of fiduciary duties,

Primus has been damaged and is entitled to recover compensatory damages in an amount to be
determined at trial of at least $170 million, as well as punitive damages in an amount to be
determined at trial of at least $340 million.
WHEREFORE, PRIMUS is entitled to a judgment against Defendants on each of
Primus’s cause of actions awarding Primus:
1.

compensatory damages in an amount to be determined at trial of at least $170

million;
2.

punitive damages in an amount to be determined at trial of at least $340 million;

3.

interest, costs and expenses incurred in this action; and

4.

such other and further relief as the Court deems just and proper.

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Dated: New York, New York
July 26, 2016
KASOWITZ, BENSON, TORRES &
FRIEDMAN LLP
By:
Marc E. Kasowitz
Sheron Korpus
Sarmad M. Khojasteh
1633 Broadway
New York, New York 10019
(212) 506-1700
Attorneys for Plaintiff
Primus Pacific Partners 1, LP

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