Asia Malaysia : 's extraordinary financial scandal

1MDB: Malaysia’s extraordinary financial scandal

Tens of millions of dollars was used in 2012 by Najib's stepson Riza Aziz, an aspiring film producer, to fund the Hollywood film "The Wolf of Wall Street", starring Leonardo DiCaprio.

Author

Date

Category

- Advertisement -

’s extraordinary corruption scandal allegedly saw top officials loot billions from a state fund and go on a worldwide spending spree — buying a super yacht, paintings by Van Gogh and Monet, and financing a Hollywood blockbuster.

It also dragged in global banking giant Goldman Sachs, which this week said it had set aside $1.1 billion for settlements after helping raise $6.5 billion for the now defunct Malaysian sovereign wealth fund, which prosecutors say was looted of $4.5 billion between 2009 and 2015.

The controversy had a huge impact in Malaysia, contributing to the downfall of a coalition that had ruled the country since its independence from Britain in 1957. It also led to the US indictments of two ex-Goldman bankers, one of whom pleaded guilty.

Malaysia’s disgraced former leader — who denies any wrongdoing — has been hit with dozens of charges related to the fraud since losing power last year, and two of several expected trials have already started.

- Advertisement -

Here is a look back at the saga:

What was 1MDB?
1Malaysia Development Berhad (1MDB) was a state investment fund which Razak launched in 2009 shortly after becoming prime minister.

Its portfolio included power plants and other energy assets in Malaysia and the Middle East, as well as real estate in Kuala Lumpur.

The fund was closely overseen by Najib.

Whistleblowers say Low Taek Jho, a jet-setting Malaysian financier close to Najib but with no official positions — helped set up 1MDB and made key financial decisions.

Concerns escalated in 2014 as 1MDB slid into an $11-billion debt hole, and intensifying public scrutiny led to a string of revelations concerning missing funds.

The scandal first came to light through the Sarawak Report news portal, and gained further traction in July 2015 when The Wall Street Journal published documents showing Najib received at least $681 million in payments to his personal bank accounts.

Rich living
The US Department of Justice launched a probe due to claims that stolen Malaysian public money was laundered through the US financial system, and filed lawsuits seeking some $1.7 billion in assets allegedly purchased with the cash.

In its civil suits, the department said more than $4.5 billion was stolen from 1MDB between 2009 and 2015 by high-level officials at the fund and their associates.

Tens of millions of dollars was used in 2012 by Najib’s stepson Riza Aziz, an aspiring film producer, to fund the Hollywood film “The Wolf of Wall Street”, starring Leonardo DiCaprio.

Hundreds of millions were used, mainly by Riza and Low, to purchase high-end real estate in Beverly Hills, New York and London.

A Monet painting bought for $35 million, a Van Gogh for $5.5 million, a $35-million Bombardier jet, a $100-million stake in EMI Music Publishing, and a $250 million yacht were also ticked off the shopping list.

Election meltdown
Najib desperately sought to contain the scandal, targeting critics and introducing repressive laws, but the allegations hit the popularity of his long-ruling coalition and contributed to its shock election defeat last year.

A new government headed by veteran politician Mahathir Mohamad, who is 94 and in his second stint as premier, came to office on a wave of public anger, and has re-opened investigations.

Najib has since been hit with dozens of charges. He denies any wrongdoing.

During trial proceedings in December, Najib’s lawyer described the former leader as a victim, and accused the fugitive financier Low, nicknamed Jho Low, of being the mastermind.

Goldman’s role
Malaysia has also charged Wall Street titan Goldman Sachs and some of its current and former employees over the scandal in relation to the bank’s role in arranging bond issues for 1MDB.

Two ex-bankers were accused — along with Low and a former 1MDB employee — of being involved in misappropriating large sums during the fund-raising, bribing officials to ensure they were selected to carry out work and giving false statements to investors.

They were also charged in the US and one of them, Tim Leissner, has pleaded guilty to bribery and conspiracy charges there and agreed to a lifetime ban from the securities industry.

The second, Ng Chong Hwa, has been extradited to the US and has pleaded not guilty to bribery and other charges.

Goldman has vowed to fight the charges facing the bank.

Settlement reports
The Wall Street Journal has reported that Goldman Sachs is in talks with American authorities to admit guilt and pay a massive fine to end the US criminal probe into the scandal.

Goldman Sachs is close to an agreement with the Justice Department on a fine of close to $2 billion the Journal said, citing people familiar with the matter.

A spokeswoman for the bank declined to provide details on the possible settlement.

© Agence France-Presse

Please follow and like us:
Tweet
Share
- Advertisement -

K Shanmugam: In Singapore, the right to speak freely goes with the duty to act responsibly

Singapore—Speaking at the 16th Religious Rehabilitation Group Seminar at Khadijah Mosque on Monday (Nov 24), K Shanmugam, the Minister for Law and Home Affairs, said that the threat of terrorism has not gone away though its “shape and nature” have changed. Citing...

Parliament receives 61 NMP proposal forms from the general public, groups

The Office of the Clerk of Parliament said yesterday (24 Nov) that Parliament has received 61 Nominated Member of Parliament (NMP) proposal forms. This is higher than the 48, 41 and 36 proposal forms that Parliament received in 2018, 2016 and...

No state acknowledgement for former President Yusof Ishak on his 50th death anniversary

Although 23 November 2020 marked half a century since Singapore's first President Yusof Ishak passed away, there was no state acknowledgement to commemorate the former President's 50th death anniversary. Neither current President Halimah Yacob, Prime Minister Lee Hsien Loong nor any other...
Please follow and like us:
Tweet
Share
Follow Me
Tweet