1MDB scandal: Singapore to expand criminal probe to include Goldman Sachs over fund flows

Singapore has expanded a criminal probe into fund flows linked to scandal-plagued 1MDB to include Goldman Sachs Inc., which helped raise money for the entity, people with knowledge of the matter said.

Police in the city state had been examining Goldman’s relationship with the Malaysian state investment company since at least late 2017, but until recently, the firm’s local unit itself was not a focus of any investigation, said the people, asking not to be named discussing sensitive information. Authorities are trying to determine whether some of the roughly US$600 million in fees from the three bond deals Goldman arranged for 1MDB from 2012 to 2013 flowed to the Singapore subsidiary, they said.

Singapore’s widened probe opens a potential new battle front for Goldman, less than a week after Malaysia filed the first criminal charges against the firm over a relationship that spawned one of the biggest scandals in its history. Singapore is coordinating closely with the US Justice Department, which is also investigating Goldman and has filed criminal charges against two former senior bankers at the firm, the people said.

The scandal around the fund, whose full name is 1Malaysia Development Bhd, has reverberated around the globe, spawning a book and an upcoming Hollywood adaptation as it grew to engulf bankers, companies and government officials. It has also dragged down Goldman’s stock this year.

US prosecutors say more than US$4.5 billion flowed from 1MDB, through a complex web of opaque transactions and fraudulent shell companies, to finance spending sprees by corrupt officials and their associates.