The Image of Mighty Goldman Sachs Crumbles as Probe on 1MDB Reaches the Firm
The 1MDB scandal is not the just a scam only in Malaysia, but 10 other countries also involved in the act, even Goldman Sachs is caught up and marked as “central role” in this activity.
4 ธ.ค. 2561

To what extent can we trust the investment firm nowadays? Malaysia’s 1MDB aims to boost the country’s economy ends up with money laundering activities, even its own prime minister was probed and jailed. Meanwhile, the world’s leading investment management firm like Goldman Sachs also caught up in the middle of this activity with 1MDB. Has the image of the mighty Goldman Sachs been destroyed?
 
1Malaysia Development Berhad (1MDB) was found in 2009 after former Malaysia Prime Minister Najib Razak became the PM at that time. The company was established to drive strategic initiatives for long-term economic development for the country by forging global partnerships and promoting foreign direct investment.
However, the probe on 1MDB had begun in 2015 for its suspicious money transactions and evidences pointing to money laundering activities that also tied with Najib Razak, who pledged not guilty. The scandal of 1MDB was reportedly involve with 10 other countries around the world.
High-level officials in Goldman Sachs has also been linked to the so-called 1MDB scandal as well. Tim Leissner, Goldman’s South-east Asia chairman who arranged the $6.5 billion in 1MDB bond offerings that netted rich fees for the bank, pleaded guilty to conspiring to launder money, and that he and others (Leissner’s deputy, Roger Ng, and Malaysian financier Low Taek Jho) arranged the fundraising as debt offerings because that would generate higher fees for the bank.
 
Tim Leissner’s statement to the court:
“While acting within the scope of my employment and with the intent to benefit Goldman Sachs and myself, as an employee and agent of Goldman Sachs, I entered into a conspiracy with those individuals identified in the Government’s information to pay bribes and kickbacks to obtain and then retain business from 1MDB for Goldman Sachs.”
 
Malaysia is aiming for a full refund of around $600 million in fees the bank earned from raising $6.5 billion for the fund plus commissions. Meanwhile, two Abu Dhabi investment funds are also suing Goldman Sachs, claiming they suffered losses from the bank’s “central role” in the case as its two top employees were also allegedly bribed by Goldman.
Goldman’s shares have lost more than $11 billion from its market value since the statement from Malaysia went public on November 12.

The case of 1MDB is not just destroying the reputation of Goldman Sachs, who is viewed as a leading global investment banking, securities and investment management firm, but also the trust from its clients around the world. Goldman claims that the wrongdoings by its employees were made without the firm knowing, but when the world talks about the 1MDB scandal, it will be the scam between 1MDB and Goldman Sachs, not 1MDB and Tim Leissner.
 