Friday 9 August 2019 7:57 am

Malaysia charges 17 current and former Goldman Sachs staff in 1MDB fund fraud case

Malaysia has charged 17 current and former Goldman Sachs directors and in a corruption investigation into the state fund 1MDB.

“Custodial sentences and criminal fines will be sought against the accused in the Section 367 Charges, given the severity of the scheme to defraud and fraudulent misappropriation of billions in bond proceeds,” Malaysia attorney general Tommy Thomas said.

Read more: US probes Deutsche Bank links with 1MDB fraud case

Goldman helped raise $6.5bn (£5bn) for the development fund involving three bond offerings dating back to 2012 and 2013.

Goldman Sachs said in a statement: “We believe the charges announced today, along with those against three Goldman Sachs entities announced in December last year, are misdirected and will be vigorously defended.”

Today’s charges were brought under a section of the Malaysian Capital Markets and Services Act, which allows Malaysia to hold senior executives responsible for offences that may have been committed.

The named directors work or worked for three Goldman Sachs subsidiaries – Goldman Sachs International, Asian arm Goldman Sachs LLC and Singapore unit Goldman Sachs Pte.

Figures include Richard Gbnodde, the chief executive of Goldman Sachs International and his co-CEO former vice chairman of Goldman Sachs Group, Michael Sherwood.

Malaysia has previously filed charges against two Goldman employees – Tim Leissner and Roger Ng.

They allegedly plotted to defraud the government along with the 1MDB fund’s Jasmine Loo Ai Swan and Low Taek Jho “by way of the commission and abetment of false or misleading statements to dishonestly misappropriate billions from the bond proceeds”.

Leissner, who worked as a partner of Goldman Sachs’ Asia division, pleaded guilty last August to conspiracy to launder money and agreed to pay $43.7m (£36m). 

Low Taek Jho, also known as Jho Low, remains at large. He was the financier of the 1MDB deal. The US Department of Justice has sold his luxury yacht, the Equanimity, for $126m.

Read more: US to return $200m to Malaysia as part of 1MDB probe

The investment bank has previously denied wrongdoing. It has said that ex-Malaysian government figures and 1MDB employees had lied about the purpose of some of the fund money.

The US Department of Justice is investigating the bank’s role in the incident. The DoJ believes fund officials and others misappropriated $4.5bn from the 1MDB fund between 2009 and 2014.