Some news events from Malaysia

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Three units of Goldman Sachs <GS.N> pleaded not guilty to charges of misleading investors regarding $6.5 billion in bond sales that the U.S. investment bank helped raise for state fund 1Malaysia Development Berhad (1MDB), Bernama state news agency reported on Monday.

Goldman Sachs pleads not guilty in Malaysia over 1MDB bond sales: state media

The U.S. Department of Justice estimates $4.5 billion was misappropriated from Malaysia’s 1MDB between 2009 and 2014, including some of the funds that Goldman Sachs helped raise.

Malaysian prosecutors filed charges in December 2018 against the units, based in London, Hong Kong and Singapore, for misleading investors by making untrue statements and omitting key facts in relation to the 1MDB bond issues.

A representative for Goldman Sachs pleaded not guilty after the charges were read out at the Kuala Lumpur High Court on Monday, Bernama reported.

The court set the trial for November, with hearings scheduled until April 2021, Bernama reported.

Goldman Sachs has consistently denied wrongdoing, saying that certain members of the former Malaysian government and 1MDB lied to it about how proceeds from the bond sales would be used.

Malaysia has said it was seeking up to $7.5 billion in reparations from Goldman over its dealings with 1MDB, which was set up in 2009 by then prime minister Najib Razak.

Najib, who lost a general election in May 2018, is facing 42 criminal charges related to losses at 1MDB and other state entities. He has pleaded not guilty.

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March 6, 2020 - The U.S. Department of Justice has delayed the return to Malaysia of another $240 million of recovered money allegedly stolen from the 1MDB sovereign fund, two sources with direct knowledge of the matter said on Friday, with one citing political uncertainty.
U.S. delays returning more 1MDB funds to Malaysia, sources say

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Prosecutors dropped money-laundering charges against Riza Aziz - a Hollywood producer and the stepson of Malaysia's former prime minister Najib Razak - on Thursday after a deal that officials said included the recovery of $107.3 million of overseas assets.

Malaysia to recover $107.3 mln after settling 1MDB case against 'Wolf of Wall Street' producer

May 14, 2020 - Riza, the co-founder of Red Granite Pictures that produced the hit movie “The Wolf of Wall Street”, was charged with five counts of money laundering last year over allegations that he had received $248 million misappropriated from state fund 1Malaysia Development Berhad (1MDB).

U.S. and Malaysian authorities say a total of about $4.5 billion was taken from 1MDB - an institution co-founded in 2009 by then-premier Najib.

A sessions court judge ruled on Thursday that the charges against Riza would be withdrawn after state prosecutors said they had reached a deal with the accused.

Riza’s lawyer Hariharan Tara Singh confirmed a deal had been reached and said his client was “pleased to make good on his obligations to the authorities and looks forward to beginning the next chapter of his life.”

The government is expected to recover overseas assets estimated to be worth $107.3 million as part of the agreement, the Malaysian Anti-Corruption Commission said in a statement.

“Based on the agreement, the accused is required to pay a compound to the government... which is punitive as an alternative to the charges that have been brought against him,” the commission said.

The court said the dropping of charges did not amount to an acquittal. Steps would be taken to ensure a full acquittal upon completion of the deal, failing which charges could be reinstated, lead prosecutor Gopal Sri Ram said during the hearing.

The U.S. Department of Justice has said Red Granite financed three films, including “The Wolf of Wall Street”, using funds they suspect were stolen from 1MDB.

Red Granite paid the U.S. government $60 million in September 2017 to settle a civil forfeiture claim over the rights to the films.

The United States has returned or assisted Malaysia with recovering around $600 million from the sale of assets allegedly bought with stolen 1MDB funds.

Since losing an election to Mahathir Mohamad in 2018, Najib has been slapped with 42 criminal charges tied to losses at now-defunct 1MDB and other state entities. He has pleaded not guilty and has consistently denied wrongdoing.

The case has also led to scrutiny of Goldman Sachs, which Malaysia has accused of misleading investors over bond sales totalling $6.5 billion that the bank helped raise for 1MDB. Three units of the bank have pleaded not guilty.

 

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Malaysia’s former leader, Najib Razak, was found guilty of corruption and sentenced to 12 years in jail on Tuesday in the first trial over a multi-billion-dollar scandal at state fund 1MDB that stretched to the Gulf states and Hollywood.

Malaysia's Najib sentenced to over a decade in jail in 1MDB trial

Malaysia's former leader, Najib Razak, was found guilty of corruption and sentenced to 12 years in jail on Tuesday in the first trial over a multi-billion-dollar scandal at state fund 1MDB that stretched to the Gulf states and Hollywood.

www.reuters.com

In a case widely seen as a test of the nation’s resolve to stamp out corruption and which could have major political implications, high court judge Mohamad Nazlan Mohamad Ghazali sentenced Najib to 12 years and a fine of 210 million ringgit ($49 million) for abuse of power.

Najib, 67, also received 10 years in jail on each of three charges of criminal breach of trust and three charges of money laundering for illegally receiving nearly $10 million from SRC International, a former unit of the state fund.

“After considering all evidence in this trial, I find that the prosecution has successfully proven its case beyond a reasonable doubt,” Mohamad Nazlan said.

He ordered the jail terms to run concurrently.

The judge allowed a request by Najib’s lawyers to delay the jail sentence and the fine, but asked Najib to post additional bail and report to a police station twice a month.

Najib had pleaded not guilty, and said he would appeal the verdict in Malaysia’s Federal Court if convicted. The verdict could potentially be partially or fully overturned, though that could take years.

The nearly $10 million in the SRC case is a fraction of the funds Najib is alleged to have misappropriated from 1Malaysia Development Berhad (1MDB), the state fund.

Prosecutors say more than $1 billion of 1MDB funds made its way into Najib’s personal accounts, over which he faces a total of 42 criminal charges.

U.S. and Malaysian authorities say $4.5 billion is believed to have been stolen from 1MDB, a fund Najib founded to promote economic development, and used by his associates to buy art, a superyacht and fund the “Wolf of Wall Street” movie.

PINK DIAMONDS
Prosecutors have also said $27 million was used to buy a pink diamond necklace for Najib’s wife, Rosmah Mansor, and some of the money went into warchests for Najib’s election campaigns.

Former U.S. attorney-general Jeff Sessions described the scandal as kleptocracy at its worst.

Allegations of corruption over 1MDB have hung over Najib for more than five years. But the criminal charges came only after his election defeat in 2018 when his successor Mahathir Mohamad reopened investigations.

Oh Ei Sun, a senior fellow with Singapore’s Institute of International Affairs, said the verdict was “the first time a prime minister has been convicted of essentially corruption- related charges and it testifies to the level of corruption in Malaysia”.

Politicians and others who had raised concerns about 1MDB years ago welcomed the verdict.

“All the heartbreaks were well worth it today. Well done Malaysia,” said Rafizi Ramli, a former opposition lawmaker and 1MDB whistleblower.

COALITION STRAINS
Najib’s lawyers had said he was misled by Malaysian financier Jho Low and other 1MDB officials into believing that the funds banked in his accounts were donated by the Saudi royal family. Low has denied wrongdoing.

Judge Mohamad Nazlan said it was “far-fetched” to believe Najib could have been misled by Low and asked why he never questioned Low’s claim that the money was a donation.

Before sentencing, Najib told the court he never demanded or planned for the 42 million ringgit in his account. “There has been no evidence or witnesses to say so,” he said.

Najib can remain a lawmaker but will be disqualified if his conviction stands after all legal avenues have been exhausted.

Najib’s party returned to power in February as part of an alliance led by Prime Minister Muhyiddin Yassin, who on Tuesday said the government respected the verdict and was committed to the rule of law.

Sources said this week a guilty verdict could prompt Najib’s camp to withdraw support for the government, which has a razor-thin majority.

Slideshow (4 Images)
Malaysia's Najib sentenced to over a decade in jail in 1MDB trial