Attorney General Tan Sri Tommy Thomas clarified today there was never a plan to drop charges against Goldman Sachs in exchange for a settlement.
Starting last December, the Malaysian government filed criminal charges against the US investment bank and its subsidiaries “for perpetrating a scheme to defraud the Government of Malaysia and the purchaser of three bonds with a face value of US$6.5 billion which were underwritten and arranged by Goldman Sachs, and issued by subsidiaries of 1MDB”.
To date, the AG Chambers has identified 17 current and former executives of three Goldman Sachs subsidiaries as potentially guilty.
This case is also the first time a country in the world is prosecuting a leading investment bank as a company.
The three subsidiaries are Goldman Sachs International, Goldman Sachs (Asia) LLC and Goldman Sachs (Singapore) Pte.
Last June Prime Minister Tun Dr Mahathir Mohamad revealed that Goldman had offered Malaysia US$ 239 million in compensation. The amount is a mere slap on the wrist compared to the billions in fines the bank now stands to pay.
1MDB, brainchild of disgraced former Prime Minister Najib Razak, is one of the biggest and certainly most bizarre financial scandals of our century.
It started out ten years ago as a nation-building fund.
By the time the story broke, billions of dollars had been misappropriated, and eye-watering sums had been spent on lavish parties, yachts, prized paintings, prime real estate in New York and London, and even a Hollywood production.
At the heart of it all is fugitive wheeler-dealer Jho Low, who together with Najib has denied any wrongdoing.
Former Goldman banker Roger Ng is now on trial in the US and faces up to 30 years in prison if convicted on charges related to the Foreign Corrupt Practices Act.
His colleague, Tim Leissner – once Asia’s most powerful and colourful deal maker for Goldman – has pleaded guilty to charges brought against him by the US Department of Justice.
Goldman Sachs reportedly pocketed US$600 million in fees for arranging the three bond sales for 1MDB.
The US banking giant’s shares fell by 32% last year as the scandal unraveled and Malaysia’s newly elected opposition-led government started a formal investigation into 1MDB.
The case is scheduled for Oct 22 and will be tried in the Magistrate Court before being transferred to the Malaysian High Court. Thomas is confident that Malaysia has a solid case and a high chance of winning.
Equanimity, Jho Low’s former yacht, was one of the many multi-billion dollar assets seized as part of the 1MDB scandal. Picture credit: Wikimedia.