Malaysia drops charges against Goldman over 1MDB scandal

Lucy Burton

MALAYSIA has dropped criminal charges against Goldman Sachs following a massive fraud in which the country’s sovereign wealth fund was allegedly raided to buy Picasso paintings, jewellery and a mega-yacht.

The Malaysian National News Agency, Bernama, has quoted a High Court judge saying the three Goldman units accused of misleading investors have officially been discharged.

Charges against a number of Goldman bosses, including its top banker in Europe, Richard Gnodde, are also understood to have been dropped.

The move was widely expected after Goldman agreed to pay $3.9bn (£3.3bn) to Malaysian authorities in July, a settlement that ended a long-running investigation over its role raising money for the scandal-hit 1MDB fund in 2013.

1MDB was set up to fund infrastructure projects in Malaysia and turn Kuala Lumpur into an Asian financial hub, but instead huge sums were allegedly looted to buy luxury items. US authorities allege that some of the proceeds were laundered through real estate assets and even funded Hollywood movies such as The Wolf of Wall

Street, where actor Leonardo Dicaprio starred as a corrupt trader.

The Wall Street bank, which has always denied any wrongdoing and tried to distance itself from the scandal by arguing that it was duped by one rogue banker, helped raise more than $6bn in bonds issued by 1MDB.

The bank has been fighting to move on from the crisis, which is one of the world’s biggest ever financial scandals, for years. In 2018 Malaysia’s then prime minister Mahathir Mohamad said Goldman’s bankers had “cheated” Malaysia through its dealings with the fund while last January Goldman chief David Solomon apologised to the country over the role a former banker played.

The bank’s settlement with Malaysia does not impact claims against others. Jho Low, a Malaysian financier accused by prosecutors of leading the alleged heist, is believed to be on the run.

He is claimed to have taken out enough money to buy a $30m Manhattan penthouse and the 300ft yacht Tranquility, which was later seized. He spent $8m on jewellery and a glass piano for model Miranda Kerr and bought a Picasso for Dicaprio’s birthday. He has denied any wrongdoing.

A spokesman for Goldman declined to comment on the charges being dropped.