No bank in Singapore received US$3 billion (S$4 billion) from a Goldman Sachs-arranged bond issue for scandal-hit Malaysian state fund 1Malaysia Development Berhad (1MDB), the Monetary Authority of Singapore has found.
MAS was refuting a Wall Street Journal (WSJ) report alleging Goldman Sachs had wired the US$3 billion from the bond issue arranged in 2013 to a 1MDB-controlled account at the Singapore branch of small Swiss private bank BSI.
The WSJ report said Mr Kevin Wong, Goldman's lawyer and a partner with law firm Linklaters in Singapore, had sent a note to Goldman bankers alerting them the money was to be sent to a private bank. The report, citing unnamed sources, said Goldman had checked the credentials of BSI SA and found no reason not to send money there.
However, the WSJ yesterday issued a correction, stating the US$3 billion went to 1MDB's account with BSI in Switzerland rather than the Singapore branch.
An MAS spokesman said yesterday that "no bank in Singapore received the US$3 billion wire transfer from Goldman Sachs in relation to the bond issuance for 1MDB".
Goldman Sachs, BSI and Mr Wong all declined comment.
On May 24, MAS moved to shut down BSI Bank's operations here over anti-money laundering rule violations, as its Swiss parent faces criminal proceedings in Europe over money flows from 1MDB.
The US authorities are probing Goldman Sachs to see if it violated anti-money laundering laws for failing to flag a suspicious transaction as funds of that size would typically go to a large global bank, the WSJ said. Half the sale proceeds allegedly transferred by Goldman Sachs to the Swiss bank account disappeared, with some ending up in Malaysian Prime Minister Najib Razak's bank account, the WSJ said.
But Datuk Seri Najib's press secretary disputed the report, saying WSJ's "false allegations against Malaysia have been proven to be lies yet again, this time by" MAS. "Despite the gravity of their allegations, the WSJ gave no evidence at all to support their claims," Datuk Seri Tengku Sariffuddin Tengku Ahmad said.
The US Federal Bureau of Investigation and Justice Department, as part of a broader probe into 1MDB, are looking into the role of Goldman Sachs. The investment bank made about US$593 million from three bond sales in 2012 and 2013 that raised US$6.5 billion for 1MDB, according to media reports. That's above what banks typically make from government deals.
Meanwhile, 1MDB defended its liquidity position, saying it is "strong", after Moody's Investors Service on Tuesday withdrew the rating on 1MDB Energy's 5.99 per cent US$1.75 billion debt "for its own business reasons".
