It’s not what a newly elected MHR
would have wanted. Another diversion from the main task of making his
way up the greasy pole of politics and showing the rest of the country
that he’s “foreman material.” But that’s what the member for Wentworth
Malcolm Turnbull has to contend with following news that his old
Goldman Sachs gig as investment banker to Rocket Rodney Adler and FAI
still has him still in the sights of the HIH Liquidator, Tony McGrath.

The Sydney Morning Herald
reports today that Goldman Sachs is still a target, while the Financial Review
says Goldman Sachs and its then chief, Malcolm Turnbull and deputy,
Russell Pillemer, have been named in one of two legal actions by
McGrath over the FAI re-insurance contracts and the sale of FAI to HIH
in 1998. The deepest pockets in both actions is General Re, the Warren
Buffett-owned reinsurance giant being investigated by the country’s
prudential regulator, APRA.

Malcolm
Turnbull is the richest member of the Australian parliament, while
Warren Buffett is the second richest man in the US. Both are bit
players in wider stories and have been caught up in investigations and
legal actions in a way that will be distracting to both. According to
AAP, Goldman Sachs vowed to fight McGrath’s legal action last September:

US-based investment bank Goldman Sachs today (September 27)
said any claim against it, or former employees, in relation to HIH
would be as baseless today as it was when examined by a royal
commission two years ago.

Goldman Sachs was responding to a news
report today that said HIH Liquidator Tony McGrath had filed a claim
against a series of people and organisations involved with FAI
insurance at the time it was sold to HIH. The list of 10 defendants
included merchant banker and former Goldman Sachs Australia chairman,
Malcolm Turnbull, and FAI chief executive Rodney Alder. A request for
comment today from Mr Turnbull was referred to Goldman Sachs director
of corporate communications Edward Naylor.

Any claim made
against Goldman Sachs or its former employees would be as baseless
today as when these matters were examined exhaustively in 2002 by the
HIH Royal Commission and rejected by Justice Neville Owen in his final
report last year which exonerated Goldman Sachs and its employees,”
Naylor said.”We will vigorously defend any action brought against us,
he told AAP.

Goldman Sachs Australia was cleared by the 2002 royal commission of
playing a part in the $5.3 billion collapse of HIH Insurance in 2001.
The AFR
says the action involving Goldman Sachs and Turnbull is the first of
two and involves the sum of $400 million, being the $300 million paid
by HIH for FAI plus interest. The second action is called the “FAI
trading loss claim and dividend claim” and has the same defendants,
except for the Goldman Sachs executives.

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Peter Fray
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