18 December 2018 at 09:18 BST

In Goldman Sachs, Malaysia does not trust

Malaysian prosecutors files charges against Goldman Sachs and two bankers, seeks fines of over $3 billion.

Attorney General's Chambers Shutterstock

In filing criminal charges, the Malaysian attorney general’s office alleges the bank helped to ‘dishonestly misappropriate’ $2.7bn from bond issues

Malaysian charges

Goldman Sachs and two of its bankers are being pursued for their role in the alleged embezzling of billions of dollars from the country’s scandal-wracked state investment fund, 1MDB. The charges are the first time Goldman has been directly targeted by prosecutors for its alleged role in the widening scandal, and follows from the US department of justice indictment last month of the two former bankers on similar charges. Tommy Thomas, Malaysia’s attorney general, said he was filing charges against subsidiaries of Goldman and former bankers Tim Leissner and Roger Ng Chong Hwa, whom he described as Goldman’s ‘key employees’ in the case.

Global charges

The two bankers are accused of bribing Malaysian officials to secure involvement in the auction of $6.5 billion of bonds for 1MDB. Goldman received $600 million in fees for its role. Mr Thomas, said the amount was ‘several times higher than the prevailing market rates and industry norms.’ Law-enforcement agencies from multiple countries allege that as much as $4.5 billion was misappropriated from the investment fund. The bank disputes the allegations and said it would defend itself against the accusations. A bank spokesperson explained, ‘we believe these charges are misdirected, we will vigorously defend them and look forward to the opportunity to present our case.’ They confirmed the ‘firm continues to co-operate with all authorities investigating these matters.’

 
   
 
 
 

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