Malaysia 1MDB Scandal: US Investigators Probing If Goldman Sachs Misled Bondholders
Malaysia 1MDB Scandal: US Investigators Probing If Goldman Sachs Misled Bondholders
BY VISHAKHA SONAWANE @VISHAKHANS ON 03/22/16 AT 8:07 AM
American investigators probing the Malaysian state-run fund 1Malaysia Development Bhd are looking into whether Goldman Sachs Group Inc. misled bondholders when it sold securities issued by the investment fund, the Wall Street Journal reported Monday citing a source. The FBI and the U.S. Department of Justice are investigating Goldman Sachs over allegations of money laundering and corruption as an adviser to the 1MDB.
Officials are trying to establish if Goldman Sachs’ proceeds from bond deals done for 1MDB were not being used for the intended purpose, the source told the Journal. Investigators are also looking into whether the investment firm’s hiring practices in the region violated U.S. anti-corruption laws, the report added.
According to the Journal, Goldman Sachs advised 1MDB on three acquisitions and arranged the sale of three bonds worth a total of $6.5 billion that got the firm $650 million. Goldman Sachs' last transaction with 1MDB was in 2013 when it sold $3 billion in bonds for what the government fund reportedly said would help pay for a real estate project in Kuala Lumpur.
The report added that 1MDB officials told Goldman Sachs to transfer the proceeds from the deal to the fund’s account at private Swiss bank BSI SA. The huge transfer drew the attention of lawyers at Linklaters, Goldman Sachs’ legal counsel on the transactions, the Journal reported. Kevin Wong, a partner at the law firm, reportedly alerted Goldman Sachs that the money was being sent to the private bank...
