Digital Assets

Malaysia drops 1MDB charges against Goldman Sachs

Malaysia has reportedly dropped the criminal charges it was pursing against Goldman Sachs over its role in the 1MDB scandal.

The charges withdrawn accused the US firm of misleading investors over USD6.5 billion in bond sales they assisted the state fund in organising, Reuters said in an article.

Malaysia’s announcement that it is withdrawing the charges comes on the back of a USD3.9 billion settlement paid by Goldman Sachs to settle a probe into its alleged role in the scandal involving the 1MDB fund, a fund around which the US Department of Justice estimates saw the misappropriation of USD4.5 billion funds from 1MDB between the years 2009 and 2014. The USD4.5 million includes some of the funds raised by Goldman Sachs, reports Reuters.

The Goldman Sachs units involved, based in London, Hong Kong and Singapore, pleaded not guilty in February 2020, and the Bank as a whole has consistently denied any wrongdoing in connection with the scandal.

“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,” Bernama quoted High Court judge Mohamed Zaini Mazlan as saying as he granted prosecutors the request.

According to an article by Bloomberg, Goldman Sachs boosted its legal reserves by USD2.01 billion, thus reducing its second-quarter net income by 85%, in order to account for the Malaysia settlement.

Furthermore, the settlement with Goldman Sachs does not acquit or affect Malaysia’s claims against other people involved in the 1MDB scandal, including Low Taek Jho, the scandal’s alleged mastermind, reports Bloomberg. Prosecutors also are reportedly looking to bring Goldman Sachs banker Roger Ng to Malaysia to face similar accusations.

Najib Razak, Malaysia’s former premier, who held the position in 2018, was sentenced to 12 years in prison, having been found guilty of corruption in August 2020.