KL issues Goldman show-cause letter over 1MDB

Malaysia's securities commission said yesterday that it has issued a show-cause letter to Goldman Sachs, which is embroiled in multi-jurisdictional investigations into Malaysian state fund 1Malaysia Development Berhad (1MDB).

A show-cause letter typically requires the recipient to explain why they should not be subject to disciplinary action.

"We have issued a show cause to Goldman Sachs," the chairman of the Malaysia Securities Commission, Mr Syed Zaid Albar, said at a press conference yesterday. However, he did not say when the letter was issued or provide more details.

If the commission finds wrongdoing, its powers include issuing fines and revoking operating licences.

Goldman Sachs did not immediately respond to a request for comment.

Apart from facing civil lawsuits, it is being investigated by the Malaysian authorities and the United States Department of Justice for its role as underwriter and arranger of three bonds that raised US$6.5 billion (S$8.8 billion) for 1MDB.

US prosecutors last year charged two former Goldman bankers, Tim Leissner and Roger Ng, over the theft of billions of dollars from 1MDB.

Goldman Sachs has consistently denied wrongdoing and said certain members of the former Malaysian government and 1MDB had lied to the bank about the use of the proceeds from the bond sales.

In January, Goldman Sachs chief executive David Solomon apologised to the Malaysian people for Leissner's role in the 1MDB scandal, but said the bank had conducted due diligence before every transaction.


A version of this article appeared in the print edition of The Straits Times on March 15, 2019, with the headline 'KL issues Goldman show-cause letter over 1MDB'. Print Edition | Subscribe