Goldman Sachs freed of 1MDB bond sale charges

The High Court in Kuala Lumpur today acquitted and discharged UK-based Goldman Sachs International Ltd and its two Asian entities, Goldman Sachs (Asia) LLC and Goldman Sachs (Singapore), of charges relating to the sale of RM27.2 billion in 1MDB bonds.

Judge Mohamed Zaini Mazlan made the decision after deputy public prosecutor Masri Mohd Daud told the court that the prosecution did not intend to pursue the charges against the accused and was therefore applying 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,” Zaini said.

In December 2018, Malaysia filed four charges against the three entities for allegedly leaving out material facts on the sale 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 between March 19, 2012 and Nov 11, 2013.

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

The US 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 had agreed to a total settlement of US$3.9 billion (RM16.6 billion) to resolve outstanding charges and claims related to the three bond transactions that the company had structured and arranged for 1MDB.

The ministry said the settlement included 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 traceable to the diverted proceeds from the three bond transactions.