Malaysia has charged 17 former and current Goldman Sachs bankers over the multibillion-dollar corruption investigation at state fund 1MDB, the attorney general said.
The individuals charged include Richard Gnodde, the chief executive of Goldman Sachs International - the bank's most senior executive in London -, and Michael Sherwood, who was formerly the vice-chairman of Goldman Sachs Group Inc and co-chief executive officer of Goldman Sachs international.
John Michael Evans, a former partner at the US bank who's now president of Alibaba Group Holding Ltd., was also charged. They were directors of three Goldman Sachs units that Malaysia has accused of misleading investors when arranging $6.5bn in bond sales for 1MDB in 2012 and 2013.
Custodial sentences and criminal fines will be sought against the accused … given the severity of the scheme to defraud and fraudulent misappropriation of billions in bond proceeds"
Goldman Sachs has been under scrutiny for its role in helping to raise $6.5bn through bond offerings for 1Malaysia Development Bhd (1MDB), the subject of corruption and money-laundering investigations in at least six countries.
Friday's charges were brought under a section of the Malaysian Capital Markets and Services Act that holds certain senior executives responsible for any offences that may have been committed, the attorney general, Tommy Thomas, said.
"Custodial sentences and criminal fines will be sought against the accused … given the severity of the scheme to defraud and fraudulent misappropriation of billions in bond proceeds," Thomas said in a statement.
The directors knew the funds would be misappropriated, Malaysian officials allege. The country announced charges against the entities in December, though prosecutors have struggled to serve to the respective Goldman Sachs units.
Former senior Goldman Sachs banker Tim Leissner has pleaded guilty to conspiring to launder money and violating the US Foreign Corrupt Practices Act by paying bribes to Malaysia and Abu Dhabi officials and circumventing Goldman's internal accounting controls.
The bank said it would "vigorously" contest the charges.