GOLDMAN Sach’s shares were trading at its lowest level since Oct. 2016 early Monday morning (local time) after the Malaysian government filed criminal charges against the global banking monolith and two of its employees on the alleged theft of billions of dollars.
The bank’s shares have dropped 34 percent this year, according to Fortune, and the shares took another 2.4 percent hit as the government laid the charges against Goldman subsidiaries and ex-bankers Tim Leissner and Ng Chong Hwa over the alleged misappropriation of US$2.7 billion and graft involving the 1Malaysia Development Berhad (1MDB) state fund.
The latest development comes as a fresh blow to Goldman, which has come under scrutiny following allegations of its complicity in the scandal which has rocked the Southeast Asian nation and prompted investigations in at least six countries.
Announcing the charges, Malaysian attorney-general Tommy Thomas said “the highest standards are expected of Goldman Sachs”.
“They have fallen far short of any standard. In consequence, they have to be held accountable.”
Goldman has come under fire for its role in underwriting bonds totalling US$6.5 billion on three occasions for 1MDB. For the transactions, the bank earned a whopping US$600 million in fees, according to the AFP.
Thomas said Goldman and its former employees were accused of making false and misleading statements to misappropriate US$2.7 billion from the bond issuances, which took place in 2012 and 2013.
The scandal was a major contributor to the shock election defeat of Malaysia’s previous government under former Prime Minister Najib Razak in May.
Najib, who is facing dozens of corruption charges, has been implicated in the case which saw huge sums looted from the sovereign wealth fund to buy jewellery, a superyacht, a private jet, real estate, and exquisite artwork, among others.
In November, Malaysian Prime Minister Dr Mahathir Mohamad said bankers at Goldman Sachs Group Inc “cheated” the country throughout its dealings with the government under Najib.
The US Department of Justice (DOJ) believes a total of US$4.5 billion was syphoned from 1MDB between 2009 and 2014 and now Malaysia is looking to get a “full refund” from the Wall Street bank.
The bank has consistently denied wrongdoing in the case and the announcement of the charges marks the first time it is faced with criminal charges in the 1MDB scandal.
“Certain members of the former Malaysian government and 1MDB lied to Goldman Sachs, outside counsel and others about the use of proceeds from these transactions,” Goldman spokesman Michael DuVally said in a statement, as quoted by Reuters.
“1MDB, whose CEO and Board reported directly to the prime minister at the time, also provided written assurances to Goldman Sachs for each transaction that no intermediaries were involved,” DuVally said.