In the corruption scandal surrounding the sovereign wealth fund 1MDB, Malaysia has sued the US investment bank Goldman Sachs. In addition, two former employees of the bank, a former 1MDB employee and a Malaysian investor, are to be brought to justice for violating Malaysian securities laws, as Attorney General Tommy Thomas announced today.
Malaysia demands billions in damages. Goldman Sachs said the allegations were misguided. The bank continues to cooperate with all authorities in their investigations.
Scandal about ex-premier
Malaysian Prime Minister Najib Razak, who has since been suspended, had launched 1MDB 2009 to promote economic development. The US Department of Justice speculates that senior fund employees and their partners have embezzled more than $ 4.5 billion from the fund.
Najib’s role in the scandal was one of the main reasons for his departure. In a house search in May, the Malaysian police found, among other things, equivalent to nearly 25 million euros in cash, 567 luxury handbags of brands such as Hermes, Prada and Chanel and 423 watches from brands such as Rolex and Chopard. The former head of government has been charged with corruption. He has denied the allegations.
High sentences threaten
Goldman Sachs had covered three $ 1 billion of 1MDB bond issues and received $ 600 million in fees. According to Thomas, $ 2.7 billion was misappropriated from bond proceeds. The prosecution will demand damages from the defendants, which will be „significantly“ above the allegedly embezzled $ 2.7 billion and $ 600 million in fees. In addition, the accused persons face up to ten years in prison.
The US Department of Justice had already charged the two Goldman bankers and the Malaysian investor last month. At the time, banker Tim L. pleaded guilty to money laundering and violations of the US Anti-Corruption Practices Act.
