Goldman steadfast to counter 1MDB-related charges

The investment bank will contest all the charges, while extending full cooperation to local authorities in the probe


Goldman Sachs Group Inc is maintaining its position to contest all charges filed against the investment bank, on several ill transactions relating to controversial former sovereign state fund 1Malaysia Development Bhd (1MDB).

The US-based investment bank will contest all the charges, while extending full cooperation to Malaysian authorities probing the case.

“Goldman Sachs was lied to by certain members of the former Malaysian government and 1MDB.

“We intend to vigorously contest the charges brought against us,” a Goldman spokesperson said in an email reply to The Malaysian Reserve (TMR).

Local prosecutors has filed criminal charges against the bank and its two former employees for alleged “theft” of US$2.7 billion (RM11.16 billion) from a total of US$6.5 billion raised from three bonds issued on behalf of 1MDB.

The money was said to have ended up in the accounts of people close to, or associated with the bank.

The government has also alleged that the New Yorkbased bank had misled investors in the three bond deals it arranged and knew the money would be misused and that US$600 million were pocketed by the bank as a bond arrangement fee.

Following the charges, Goldman former senior banker Tim Leissner pleaded guilty to the charges including conspiring to money laundering and has agreed to pay US$43.7 million in restitution.

The investment bank CEO David Solomon has also apologised to the Malaysian people for the role it played in the financial scandal.

However, Finance Minister Lim Guan Eng said the bank must be held accountable by paying for compensation instead of apologising.

TMR previously reported experts’ opinion that although Goldman is entitled to raise its defence, it is still responsible to explain whether it had sufficiently conducted adequate due diligence.

Asian Strategy and Leadership Institute’s Centre for Public Policy Studies chairman Tan Sri Dr Ramon Navaratnam also said the bank’s statement is expected in order to minimise charges.

He added that as a top banker, Goldman was supposed to be able to outwit the crooked borrowers, referring to the former 1MDB officials and previous government.

The bank also denied that any money from the 1MDB funds passed through any accounts controlled by the bank.