February 20, 2024

Goldman boss apologises for 1MDB scandal

From BBC


Goldman Sachs new boss has apologised to Malaysia for the role an ex-partner played in the corruption scandal at one of the country’s wealth funds.

However, chief executive David Solomon also distanced the bank from the scheme, which saw billions embezzled from the state development fund, 1MDB.

He said Goldman, which had helped to raise money for the fund, had been deceived about details of the deals.

Malaysia filed criminal charges against Goldman last month.

It accused the investment bank of helping to misappropriate money intended for the fund.

The US and other countries are also investigating its role.

Tim Leissner, who served as Goldman’s South East Asia chairman, pleaded guilty in the US last month for his role in the money laundering and bribery scheme.

Mr Leissner left Goldman in 2016.

On a call with financial analysts Mr Solomon said: “It is very clear that the people of Malaysia were defrauded by many individuals,” he said.

“For Leissner’s role in that fraud, we apologise to the Malaysian people,” he said.

He added that Mr Leissner had deliberately concealed parts of the deal from Goldman employees charged with reviewing it.

‘Difficult time’

The scandal has hurt the bank’s reputation, but the overall impact on client relationships has been minimal, he added.

“This has been a difficult time, but I’m proud about how our firm has remained focused on our clients,” he said.

Goldman helped raise money for 1MDB, by underwriting more than $6bn in bonds in three separate offerings between 2012 and 2013.

It earned $600m for that work, according to authorities.

Much of the money intended for the fund was allegedly embezzled and used to buy art, property, a private jet – and even to finance the Wolf of Wall Street film starring Leonardo DiCaprio.

Malaysia’s former prime minister, Najib Razak is among those who have been accused of pocketing the money. He has pleaded not guilty. That case is scheduled for trial in Malaysia later this year.

For more on this story go to: https://www.bbc.com/news/business-46896849

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