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Malaysia files criminal charges against Goldman Sachs

This article is more than 12 months old

It also files charges against ex-bankers and more

KUALA LUMPUR Malaysia said yesterday that it has filed criminal charges at home against Goldman Sachs and two of the US bank's former employees in connection with a corruption and money laundering probe at state fund 1Malaysia Development Berhad (1MDB).

Goldman Sachs has been under scrutiny for its role in helping raise US$6.5 billion (S$9 billion) through three bond offerings for 1MDB, which is the subject of investigations in at least six countries.

Malaysia's Attorney-General Tommy Thomas said criminal charges under the country's securities laws were filed yesterday against Goldman Sachs, its former bankers Tim Leissner and Roger Ng, former 1MDB employee Jasmine Loo and financier Jho Low in connection with the bond offerings, Reuters reported.

"The charges arise from the commission and abetment of false or misleading statements by all the accused in order to dishonestly misappropriate US$2.7 billion from the proceeds of three bonds issued by the subsidiaries of 1MDB, which were arranged and underwritten by Goldman Sachs," Mr Thomas said in a statement.

In an e-mailed statement, a Goldman Sachs spokesman said "these charges are misdirected" and that the bank continues to cooperate with all the authorities in their investigations, Reuters reported.

The bank has consistently denied wrongdoing.

FINES

Mr Thomas said prosecutors will seek fines against the accused "well in excess" of the allegedly misappropriated US$2.7 billion bond proceeds plus US$600 million in fees received by Goldman Sachs.

Malaysia will also seek jail terms of up to 10 years for each of the individuals accused, Mr Thomas said.

"Having held themselves out as the pre-eminent global adviser/arranger for bonds, the highest standards are expected of Goldman Sachs.

"They have fallen short of any standard," Mr Thomas said.

Low has said he is innocent. A spokesman did not immediately respond to a request for comment, Reuters reported.

Loo, against whom Malaysia brought other 1MDB-related charges this month, has not commented on the case and her whereabouts are unknown.

Lawyers for Leissner and Ng could not be reached immediately.

In a separate development, Malaysia's Deputy Prime Minister said Malaysia lost RM47 billion (S$15.5 billion) in gross domestic product (GDP) value to corruption last year alone.

Dr Wan Azizah Wan Ismail said a similar amount, about 4 per cent of GDP, has been lost to corruption annually since 2013, according to Transparency International Malaysia, Bernama reported.

"What can we do with RM47 billion? It is more than we spend on education and is almost double the amount spent on healthcare in 2017," she said yesterday in her keynote address at the United Against Corruption: Anchoring Anti-Corruption in Good Governance forum.

Dr Wan Azizah said that contrary to popular belief, corruption does not occur at only the highest levels of government, Bernama reported.

"A PricewaterhouseCoopers report in 2016 showed that bribery and corrupt activities among private entities in Malaysia rose from 19 per cent in 2014 to 30 per cent in 2016," she said.

You can find corruption in daily activities like paying traffic summons too, she said.

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