NAJIB MAKES HISTORY OF THE WRONG KIND: 1MDB THIEVERY SO MASSIVE IT IS AMERICA’S MOST POWERFUL BANK’S BIGGEST SCANDAL EVER – REPORT

GOLDMAN Sachs looks set to be facing its biggest financial and reputational threat following its role in the multi-billion dollar 1Malaysia Development Bhd (1MDB) scandal, reported US magazine Rolling Stone.

The investment bank is currently facing a suit by Putrajaya which is seeking US$7.5 billion (RM31.1 billion) in repatriations, and is being investigated in the United States and Singapore for its role in moving billions of funds from the Malaysian state-owned fund.

And despite Goldman’s survival of many scandals in recent years, the 1MDB affair is shaping up to be its most damaging threat, both financially and existentially, said Rolling Stone.

In its most recent quarterly filing, Goldman said it expected to face “significant fines, penalties, and other sanctions”, but the larger damage may be to the bank’s name, said observers.

The bank had arranged three bond deals in 2012 and 2013 to fund 1MDB, raising US$6.5 billion to supposedly attract foreign investments. For its troubles, it charged 1MDB US$600 million, a fee that dwarfs what banks typically makes from government deals.

The US Department of Justice says that fugitive businessman Low Taek Jho embezzled those funds.

Goldman Sachs has distanced itself from former bankers Roger Ng and Tim Leissner, who have both been charged with abetting Low.

The bank claims that Leissner, who has pleaded guilty, and others sidestepped internal protocols.

However, the apparent inability of Goldman’s internal control mechanisms to question the source of a mysteriously lucrative US$600 million bond deal have cast aspersions on its reputation within the industry, said the report.

– https://www.themalaysianinsight.com