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Tuesday 18 December 2018 - 04:12

Malaysia sues America's Goldman Sachs in multi-billion dollar scandal

Story Code : 767290
A view of the Goldman Sachs stall on the floor of the New York Stock Exchange in New York, U.S. on July 16, 2013. (Photo by Reuters)
A view of the Goldman Sachs stall on the floor of the New York Stock Exchange in New York, U.S. on July 16, 2013. (Photo by Reuters)

The lawsuit, which was issued on Monday, charges Goldman Sachs and two of its former bankers Tim Leissner and Roger Ng of securities law violations, according to Malaysian Attorney General Tommy Thomas speaking to Reuters.

“The charges arise from the commission and abetment of false or misleading statements by all the accused in order to dishonestly misappropriate $2.7 billion from the proceeds of three bonds issued by the subsidiaries of 1MDB, which were arranged and underwritten by Goldman Sachs,” said Thomas in a statement.

Former 1MDB employee Jasmine Loo and financier Jho Low have also been charged in connection with the bond offerings.

Along with the Goldman bankers, Loo and Low have been accused of conspiring to "bribe Malaysian public officials in order to procure the selection, involvement and participation of Goldman Sachs in the bond issuances," said Thomas.

Goldman has, however, rejected the charges as being misdirected against the company and has vowed to defend those charged in the case, according to Goldman spokesman Michael DuVally.

DuVally added that the charges did not affect Goldman’s “ability to conduct our current business globally.”

The American company, which receives 15 percent of its revenue from Southeast Asia, has, nonetheless, already lost around $22 billion in market capitalization due to a more than 24 percent decrease in stock value in the past month.

The decrease came after the United States Department of Justice announced 1MDB-related charges against the two former Goldman bankers Leissner and Ng on November 1.

1MDB, which was founded by former Malaysian Prime Minister Najib Razak in 2009, is the subject of money-laundering investigations in at least six countries, including the United States, Switzerland, and Singapore.

Malaysian Prime Minister Mahathir Mohamad barred Najib and his wife from leaving the country and reopened an investigation into the 1MDB as soon as he took office in May.

Najib is accused of channeling nearly $700 million from 1MDB into personal bank accounts.
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