1MDB scandal: Malaysia files charges against 17 current, former directors at Goldman Sachs units
- Those charged include the CEO of Goldman Sachs International
- An estimated US$4.5 billion was siphoned from 1MDB between 2009 and 2014
Malaysia has filed criminal charges against 17 current and former directors at subsidiaries of Goldman Sachs Group Inc in a multibillion-dollar corruption investigation at state fund 1MDB, the attorney general said on Friday.
Goldman Sachs has been under scrutiny for its role in helping to raise US$6.5 billion through bond offerings for 1Malaysia Development Bhd (1MDB), the subject of corruption and money laundering investigations in at least six countries.
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Friday’s charges were brought under a section of the Malaysian Capital Markets and Services Act that holds certain senior executives responsible for any offences that may have been committed, Attorney General Tommy Thomas said.
“Custodial sentences and criminal fines will be sought against the accused … given the severity of the scheme to defraud and fraudulent misappropriation of billions in bond proceeds,” Thomas said in a statement.
The individuals charged include Richard Gnodde, chief executive of Goldman Sachs International and Michael Sherwood, vice chairman of Goldman Sachs Group Inc and co-chief executive officer of Goldman Sachs international, Thomas added.
Goldman Sachs did not immediately respond to a request for comment.
It has consistently denied wrongdoing and said certain members of the former Malaysian government and 1MDB lied to Goldman Sachs, outside counsel and others about the use of transaction proceeds.
Last year, Malaysia filed criminal charges against Goldman Sachs and two of the US bank’s former employees in connection with 1MDB. The US Department of Justice is investigating the bank for its role as underwriter and arranger of the bond offer.
An estimated US$4.5 billion was misappropriated from 1MDB by fund officials and their associates between 2009 and 2014, the US Justice Department has said.
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Malaysia has said it was seeking up to US$7.5 billion in reparations from Goldman Sachs over its dealings with 1MDB, set up in 2009 by then prime minister Najib Razak.