US agen­cies sub­poena Gold­man Sachs in 1MDB probe

The Myanmar Times - - International Business -

UNITED States reg­u­la­tors have is­sued sub­poe­nas to Gold­man Sachs for documents related to the in­vest­ment gi­ant’s deal­ings with the 1MDB Malaysian state in­vest­ment fund, a source close to the probe said.

Sub­poe­nas were is­sued a few months ago by in­ves­ti­ga­tors from the Depart­ment of Jus­tice and Se­cu­ri­ties and Ex­change Com­mit­tee (SEC), the source said, speak­ing on con­di­tion of anonymity.

The in­ves­ti­ga­tors also want to in­ter­view a Gold­man Sachs em­ployee over the bank’s role, ac­cord­ing to The Wall Street Jour­nal, which first broke the story.

The US of­fi­cials, who base their author­ity on the For­eign Cor­rupt Prac­tices Act, want to know why Gold­man Sachs did not re­port trans­ac­tions deemed sus­pi­cious that in­volve funds raised by bond of­fer­ings worth US$6.5 bil­lion for 1MDB, the source said.

Gold­man Sachs ar­ranged for the bond sale, and has col­lected some $590 mil­lion in com­mis­sions.

The in­vest­ment bank is col­lab­o­rat­ing with US reg­u­la­tors, the source said, and is also pro­vid­ing in­for­ma­tion to reg­u­la­tors in Sin­ga­pore, which is also car­ry­ing out a probe, The Jour­nal re­ported.

When con­tacted by AFP, Gold­man Sachs had no com­ment.

US reg­u­la­tors want to see if Gold­man Sachs fol­lowed US bank­ing laws that re­quires banks and fi­nan­cial in­sti­tu­tions to re­port sus­pi­cious trans­ac­tions.

Gold­man has re­jected any charges link­ing them to cor­rup­tion.

Malaysia has been gripped for more than a year by al­le­ga­tions that bil­lions of dol­lars were looted from state in­vest­ment fund 1MDB in an au­da­cious cam­paign of fraud and money laun­der­ing.

On July 20, the US Jus­tice Depart­ment filed suit to re­cover more than $1 bil­lion in as­sets it says were il­le­gally pur­chased us­ing 1MDB funds. Later Sin­ga­pore said it had seized nearly $180 mil­lion linked to the scan­dal-tainted fund.

“The Depart­ment of Jus­tice will not al­low the Amer­i­can fi­nan­cial sys­tem to be used as a con­duit for cor­rup­tion,” US At­tor­ney Gen­eral Loretta Lynch said on an­nounc­ing the le­gal ac­tion.

Ms Lynch said the funds taken from 1Malaysia Devel­op­ment Ber­had had been meant to help de­velop the Malaysian econ­omy.

“In­stead, they were stolen, laun­dered through Amer­i­can fi­nan­cial in­sti­tu­tions, and used to en­rich a few of­fi­cials and their as­so­ciates,” she said.

1Malaysia Devel­op­ment Ber­had, or 1MDB, is a state in­vest­ment fund launched and over­seen by em­bat­tled Prime Min­is­ter Na­jib Razak in 2009 shortly af­ter as­sum­ing of­fice.

Both Mr Na­jib and 1MDB have con­sis­tently dis­missed al­le­ga­tions of wrong­do­ing as po­lit­i­cal at­tacks by his op­po­nents. –

Photo: AFP

Gold­man Sachs de­nies any links with cor­rup­tion.

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