Malaysia files Goldman with 1MDB charges 

Malaysia has filed criminal charges against Goldman Sachs and two of its former managers over the alleged theft of billions through the 1Malaysia Development Bhd (1MDB) scandal.

Former Goldman bank bosses Tim Leissner and Ng Chong Hwa are accused of misappropriating US$2.7 billion, bribing government staff and giving false statements when helping to arrange bonds for the sovereign wealth fund.

Goldman shares have collapsed this quarter amid 1MDB developments and are now down 34 per cent this year, with further falls expected.

Allegations that former Malaysian prime minister Najib Razak and his inner circle bought yachts, homes, jewellery and artwork contributed to the first electoral defeat for the ruling coalition since independence from Britain in 1957.

Both ex-Goldman Sachs staff members had already been charged over the scandal in the US in November, with Leissner, who worked as Asean managing director at Goldman, admitting guilt while Ng, another managing director at the bank, was detained in Malaysia. 

Goldman also faces possible fines from a US Department of Justice probe into its 1MDB role.

Low Taek Jho, a high-profile Malaysian financier accused of orchestrating the operation, faces fresh charges.

Low, through a spokesman, said he would not stand trial in Malaysia while denying any guilt.

“As has been stated previously, Low will not submit to any jurisdiction where guilt has been predetermined by politics and there is no independent legal process,” the fugitive’s statement said. 

“It is clear that Low cannot get a fair trial in Malaysia, where the regime has proven numerous times that they have no interest in the rule of law.” 

The Australian-based Wells Haslem Mayhew Strategic Public Affairs released his statement.

The corporate culture at Goldman Sachs has come under scrutiny amid a stream of accusations.

“Having held themselves out as the pre-eminent global adviser, arranger for bonds, the highest standards are expected of Goldman Sachs,” Malaysia’s attorney general Tommy Thomas said while declaring the charges.

“They have fallen far short of any standard. In consequence, they have to be held accountable.”

Goldman Sachs would “vigorously defend” itself against the charges, its spokesman Edward Naylor said.

The Wall Street giant has come under fire for its role in underwriting bonds totalling US$6.5 billion on three occasions for 1MDB, for which the firm earned an estimated US$600 million in fees.

Former Goldman chief executive Lloyd Blankfein allegedly attended a 2009 meeting with Low and an associate, who is also accused of helping to launder billions from the fund.


Prime Minister Mahathir Mohamad, 93, has targeted those responsible for the 1MDB scandal since taking power in May. Picture credit: YouTube