The Singapore government has reportedly fined Goldman Sachs Singapore for US$122 million (S$165 million) due to its role in bond offerings in the 1Malaysia Development Berhad (1MDB) corruption scandal.
The 1MDB scandal involved former Malaysian Prime Minister Najib Razak, who set up the 1MDB fund in 2009, and his cronies.
On Friday morning (23 Oct), the Monetary Authority of Singapore (MAS), in a joint statement with the Attorney-General’s Chambers and the Commercial Affairs Department (CAD), stated that it has directed Goldman Sachs Singapore to appoint an independent external party to conduct a review of its remedial measures.
CAD has also served Goldman Sachs Singapore a 36-month conditional warning, in lieu of prosecution, for three counts of corruption offences punishable under Section 5(b)(i) of the Prevention of Corruption Act, Chapter 241.
Goldman Sachs Singapore will also pay a sum of US$61 million to the Malaysian authorities, which will be paid based on the deferred prosecution agreement that it has entered with the US Department of Justice (DOJ).
Goldman Sachs Group Inc will pay a US$2.3 billion fine to the US authorities.
Meanwhile, it was stated that Goldman Sachs Singapore and its former managing directors, Tim Leissner and Ng Chong Hwa, have been investigated by the CAD over three bond offerings underwritten by Goldman Sachs International for 1MDB subsidiaries.
Tim Leissner had pleaded guilty in the US District Court in 2018 to criminal charges brought by the DOJ against him for conspiring to commit money laundering and to violate the Foreign Corrupt Practices Act.
Following his guilty plea, MAS increased the 10-year prohibition order against him to a lifetime ban in December 2018.
In a separate statement, MAS said that it has issued a lifetime ban against Kevin Michael Swampillai, the former head of the wealth management services at BSI Bank Singapore.
It noted that Swampillai and his then-subordinate, Yeo Jiawei, had assisted 1MDB in restructuring several of its joint venture interests from 2012 to 2013.
During that time, they transferred a portion of “secret profits” – approximately US$5 million in total – to an entity beneficially owned by Swampillai, without being authorised by BSI Singapore.
Goldman Sachs fined US$350 million by Hong Kong’s authorities
Over in Hong Kong, Goldman Sachs was fined US$350 million by the country’s securities watchdog on Thursday (22 Oct) over its involvement in the 1MDB bribery scandal.
Hong Kong’s Securities and Futures Commission (SFC) said in a statement that Goldman Sachs Asia — the Hong Kong-based compliance and control hub of the company — showed “serious lapses and deficiencies in its management supervisory, risk, compliance and anti-money laundering controls”.
The regulator added that Goldman had accepted the SFC’s findings, leading to an early resolution of the disciplinary action.
SFC said that Goldman’s failures contributed to the misappropriation of US$2.6 billion from the US$6.5 billion that 1MDB raised in three bond offerings in 2012 and 2013.
“Goldman Sachs Asia fell far short of the standards expected of a licensed intermediary in the 1MDB case and suffered not only reputational damage from its own failures, but also brought the securities industry into disrepute,” said Thomas Atkinson, SFC’s Executive Director of Enforcement.
Goldman Sachs Asia received US$210 million — or 37 per cent of the total revenue — from the 1MDB bond offerings, which was the largest share among the various Goldman Sachs entities.