Goldman Sachs freed of 1MDB bond sale charges

KUALA LUMPUR: The High Court here yesterday acquitted and discharged United Kingdom-based Goldman Sachs International Ltd and its two Asian entities, Goldman Sachs (Asia) LLC and Goldman Sachs (Singapore), on charges relating to the sale of 1Malaysia Development Bhd (1MDB) bonds amounting to RM27.2 billion (US$6.5 billion).

Judge Mohamed Zaini Mazlan made the decision after deputy public prosecutor Datuk Masri Mohd Daud informed the court that the prosecution did not intend to pursue charges against all the accused and applied to withdraw all charges against Goldman Sachs.

“Goldman Sachs International Ltd, Goldman Sachs (Asia) LLC and Goldman Sachs (Singapore) are therefore discharged amounting to an acquittal from all four charges made against them,” said Zaini.

In December 2018, Malaysia filed four charges against the three entities for allegedly leaving out material facts on the sales of bonds between a subsidiary of 1MDB and Aabar Investment PJS Ltd (Aabar).

The offences were allegedly committed at 1MDB, Level 8, Menara IMC, No. 8, Jalan Sultan Ismail, here, between March 19, 2012 and Nov 11, 2013.

The company was charged under Section 179(c) of the Capital Markets and Services Act 2007 and punishable under Section 182 of the same act, which provides for up to 10 years’ jail and a fine of not less than RM1 million upon conviction.

The United States Department of Justice estimated that about US$4.5 billion was misappropriated from 1MDB between 2009 and 2014.

On July 4, the Finance Ministry was reported as saying that Goldman Sachs agreed to a total settlement of US$3.9 billion to resolve outstanding charges and claims related to the three bond transactions that the company structured and arranged for 1MDB.

The ministry said the settlement includes a cash payment of US$2.5 billion and a guarantee of a full recovery value of at least US$1.4 billion in assets that are traceable to the diverted proceeds from the three bond transactions.