GOVT FILES CHARGES AGAINST GOLDMAN SACHS OVER 1MDB BOND SALES
It allegedly made false statements on 1MDB bond sales
MALAYSIA has filed criminal charges against units of Goldman Sachs Group Inc, involving what it said were false statements made in relation to 1Malaysia Development Bhd (1MDB) bond sales.
The government will seek fines well in excess of both the US$2.7 billion (RM10.8 billion) of allegedly misappropriated funds and the US$600 million in fees received by Goldman Sachs for the 1MDB deals, Attorney-General Tommy Thomas said in a statement.
The allegations, the first criminal charges against Goldman Sachs since it was embroiled in the 1MDB scandal, relate to three bond sales worth US$6.5 billion that the bank arranged for the troubled state fund.
Malaysia said circulars and memoranda that Goldman Sachs prepared for the notes contained statements that were false or misleading, or both.
Goldman Sachs allegedly misrepresented to investors that the proceeds would be used for legitimate purposes, when the bank knew that the funds would be misappropriated, the statement said.
“Their fraud goes to the heart of our capital markets,” Thomas said.
“If no criminal proceedings are instituted against the accused, their undermining of our financial system and market integrity will go unpunished.”
Goldman Sachs will “vigorously defend” against the charges, spokesman Edward Naylor said.
“We believe these charges are misdirected,” he said, adding that the bank continued to cooperate with all authorities investigating the matter.
Related charges were also filed against the bank’s former employees Tim Leissner and Roger Ng Chong Hwa, as well as former 1MDB employee Jasmine Loo Ai Swan and fugitive financier Low Taek Jho. Malaysia will seek custodial sentences against them with a maximum term of 10 years, according to the statement.