SINGAPORE (Oct 23): Goldman Sachs Singapore Pte (GSSP) will pay US$122 million to the Singapore government for its role in the 1Malaysia Development Bhd (1MDB) bond offerings.
This is according to a joint statement by the republic’s Commercial Affairs Department (CAD), the Monetary Authority of Singapore (MAS) and the Attorney-General’s Chambers (AGC) issued early this morning.
The statement said the CAD has served GSSP a 36-month conditional warning, in consultation with the AGC.
Following that, GSSP has committed to, among other things, paying US$122 million to the Singapore government’s Consolidated Fund within five working days from the date of the issuance of the conditional warning.
GSSP will also disburse a sum of US$61 million to the Malaysian authorities, which will be paid and/or credited in accordance with the Deferred Prosecution Agreement (DPA).
The DPA was entered into by the Goldman Sachs Group Inc (GSG) with the United States’ (US) Department of Justice.
“This sum represents GSSP’s share of fees earned from the 1MDB bond offerings.
“The total amount paid or to be paid by GSSP under the conditional warning is therefore US$183 million,” the statement said.
The Singapore CAD investigated GSSP and two of its former managing directors, Tim Leissner and Ng Chong Hwa @ Roger Ng, in relation to the three bond offerings underwritten by Goldman Sachs International for the subsidiaries of 1MDB.
Leissner was based in Hong Kong at the relevant time as a responsible officer of Goldman Sachs (Asia) LLC (GSA).
The statement said GSA was significantly involved in the three 1MDB bond offerings, while Leissner was instrumental in procuring the bond deals from 1MDB.
On Oct 22, the Securities and Futures Commission (SFC) of Hong Kong announced that it had reprimanded and fined GSA US$350 million for serious lapses and deficiencies in various controls that contributed to the misappropriation of a portion of the funds raised in the 1MDB bond offerings.
In August 2018, Leissner pleaded guilty in the US District Court to one count for conspiracy to violate the Foreign Corrupt Practices Act and one count for conspiracy to commit money laundering.
Leissner disclosed that fugitive businessman Low Taek Jho or Jho Low had informed him and Ng that some of the proceeds from the 1MDB bonds would be paid as kickbacks and bribes to certain Malaysian and Abu Dhabi officials, and Leissner admitted to retaining some of these diverted funds for his personal use, it said.
The DPA provides for a global resolution, led by the US Department of Justice and discussed with, inter alia, Singapore, of GSG’s role in bond offerings related to 1MDB.
As part of the DPA, GSG and its affiliates will pay approximately US$2.3 billion to the US authorities.
Meanwhile, MAS has directed GSSP to appoint an independent external party to review the measures taken by GSSP to remediate deficiencies uncovered during an inspection conducted by MAS in 2016 on GSSP’s risk governance and controls in relation to the 1MDB bond offerings.
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