Reports said Malaysian prosecutors filed charges against Goldman Sachs in connection with its role as underwriter and arranger of three bond sales that raised $6.5bn for 1MDB, the first criminal action against the US bank over the scandal.
Goldman Sachs has consistently denied wrongdoing and said certain members of the former Malaysian government and 1MDB lied to the bank about the proceeds of the bond sales, the Financial Times reported.
In addition to the bonds’ total value, Goldman Sachs should also return $1bn to cover $600m in fees paid to the bank and bond coupons that were “higher than the market rate”, the FT quoted Malaysian Finance Minister Lim Guan Eng as saying.
Lim also told the FT that reparations should at least be more than $1.8 billion, the sum Goldman Sachs has told investors it had set aside to cover potential losses related to 1MDB legal proceedings.
He said: “Their figure is $1.8 billion. Ours is $7.5 billion.”
Malaysia is not currently negotiating with Goldman, but charges filed could bring the bank to the negotiating table, Lim said.
A spokesperson for Goldman Sachs said: “The 1MDB bond offerings were meant to raise money to benefit Malaysia; instead, a huge portion of those funds were stolen for the benefit of members of the Malaysian government and their associates.
“Certain members of that government and 1MDB lied to Goldman about the use of proceeds from these transactions.”
The spokesperson added that the bank intends to “vigorously contest these charges”.
Recently, this publication reported that the Monetary Authority of Singapore (MAS) increased its ban against Tim Leissner to a lifetime Prohibition Order (PO) for his role in 1MDB.