LAW & COMPLIANCE

Goldman reportedly scrutinized by Singapore in money laundering probe

Singaporean prosecutors and police are examining Goldman Sachs’s relationship with the Malaysian state investment fund 1MDB, Bloomberg reported.

Singapore’s Commercial Affairs Department, the police’s economic crime unit, and city prosecutors have interviewed current and former Goldman Sachs executives who worked on bond offerings from 1Malaysia Development Bhd and at the same time are looking into the firm’s links with Malaysian financier Low Taek Jho, who the US has alleged controlled a plot to siphon billions of dollars from the bond proceeds Bloomberg said, citing anonymous sources familiar with the matter.

1MDB, founded by Malaysian Prime Minister Najib Razak, is facing money laundering probes in at least six countries including the US, Switzerland and Singapore.

Sources are quoted as saying that while current and former Goldman Sachs employees are part of a criminal probe into fund flows related to 1MDB, the bank itself isn’t the focus of the investigation.

The interviews, which took place as recently as October, add to the scrutiny Goldman Sachs faces over its role in raising almost $6 billion for 1MDB in 2012 and 2013. The money was meant for development projects but US prosecutors allege that the bulk of it was diverted by high-level 1MDB officials and their associates.

The 1MDB bonds were arranged and underwritten by Goldman Sachs International, the bank’s London-based unit. Both 1MDB and Malaysian Prime Minister Najib Razak, who formerly chaired its advisory board, have denied any wrongdoing. Goldman Sachs earned some US$593 million in fees and commissions for arranging the 1MDB bond deals, sources were cited as saying.

Goldman Sachs spokesperson in both Singapore and Hong Kong declined to comment, according to various reports.

The Monetary Authority of Singapore (MAS) has also issued a 10-year prohibition order in March, barring Tim Leissner, former Southeast Asia chairman at Goldman Sachs, from the country’s securities industry for 10 years. The MAS said Leissner made false statements on behalf of his bank without its knowledge or consent.

Leissner was responsible for managing the relationship with Malaysia's 1MDB fund when Goldman Sachs was engaged to arrange three bond issues from 2012 to 2013. MAS had flagged its intention to ban Leissner last December.

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