Malaysia charges former Goldman Sachs banker over 1MDB scandal
MALAYSIA has filed criminal charges against a former Goldman Sachs banker in connection with a multibillion-dollar scandal plaguing state fund 1Malaysia Development Berhad, or 1MDB.
The charges against Ng Chong Hwa, also known as Roger Ng, were filed Wednesday -- two days after Goldman Sachs subsidiaries and another key employee were also slapped with a slew of indictments over the $6.5 billion bonds the bank raised for 1MDB in 2012 and 2013 that saw the New Yorkbased investment banking giant receive US$600 million in fees, deemed way above the industry norm.
Ng, who was the No. 2 man at the bank’s Southeast Asia office, pleaded not guilty to four charges under a securities law for abetting with it to, among others, conceal the role of fugitive financier Low Taek Jho, popularly known as Jho Low, in 1MDB.
Ng and Low are both wanted by US authorities who in November indicted them and the other Goldman Sachs employee, Tim Leisner, for conspiring to launder money and violating the law by bribing Malaysian officials in relation to 1MDB.
Low has been described by the United States as the mastermind behind what it calls one of the world’s greatest heists, one in which some $4.5 billion was believed to have been misappropriated from the state fund.
Leisner, who was Ng’s boss, had pleaded guilty in the United States.
In Malaysia, he, Low and Jasmine Loo Ai Swan, who was 1MDB’S legal counsel, were all charged in absentia on Monday under the same securities law for the commission and abetment of false and misleading statements in the lead-up to the bond issuance.
The suit for the offenses under the Capital Markets and Services Act 2007 carries a jail term of not more than 10 years and a minimum fine of 1 million ringgit (about $240,000), if convicted.
Low and Loo have been on the run since the scandal blew up three years ago. Ng was arrested in November by Malaysian police and is currently fighting his extradition to face trial in the United States.
The 1MDB scandal that has sparked investigation across the globe due to its complex web of money trails has already ensnared several banking giants like Deutsche Bank, Credit Suisse and UBS, which were penalized for breaching anti-money laundering laws and control lapses.
But this is the first time criminal charges were heaped on a bank such as Goldman Sachs in both the United States and Malaysia over the scandal.
Goldman Sachs claimed that it was duped by previous Malaysian government and 1MDB officials.
“Certain members of the former Malaysian government and 1MDB lied to Goldman Sachs, outside counsel and others about the use of proceeds from these transactions,” it said in a statement.
“1MDB, whose CEO and Board reported directly to the Prime Minister at the time, also provided written assurances to Goldman Sachs for each transaction that no intermediaries were involved,” it added. – Kyodo