Straight from Kuala Lumpur, we are aware that a Malaysian court will be announcing a verdict in Najib Razak’s first corruption trial on Tuesday, Jul 28, nearly 16 months after it began probing the former prime minister’s role in the multi-billion-dollar 1MDB Scandal.
What is 1MDB?
For viewers who are unaware of the term MDB, it stands for ‘Malaysia Development Berhad’. It is the Sovereign Wealth Fund of Malaysia launched under Former PM Najib in 2009. Its portfolio is diversified and intact which includes power plants and host of energy assets in Malaysia and the Middle East, as well as real estate in Kuala Lumpur. But the question arises whether it was really sovereign? And for those who wonder why the former Prime Minister? The fund was closely monitored and scrutinized by him and It is because Najib and his inner circle are accused of plundering the sovereign wealth fund in a mind-boggling fraud that stretched around the world.
What is the 1MDB Scandal Story?
The 1MDB scandal allegedly has seen top officials of the country loot billions from the state treasury and go on a worldwide spending spree – buying a US$250 million (over RM1 billion) yacht and a painting by Van Gogh, and financing a Hollywood blockbuster. Yes, the blockbuster we have all watched and pondered of becoming rich overnight – The Wolf of Wall Street starring Leonardo Di Caprio.
The embezzlement charges stem from bond sales that Goldman arranged in 2012 and 2013 which raised money for the state fund. The scandal has prompted investigations around the world and played a role in the election defeat of Malaysia’s former prime minister, Najib Razak, who was accused of pocketing $700m (£517m) from the fund he set up.
The scandal first came to light through the Sarawak Report news portal, and gained further traction in 2015 when The Wall Street Journal published documents showing Najib received at least US$681 million in payments to his personal bank accounts.
The US Justice Department launched its own probe after claims that stolen Malaysian public money was laundered through the US financial system, and has filed lawsuits seeking some US$1.8 billion in assets allegedly purchased with the cash.
Relation between 1MDB and Goldman Sachs.
It was one of the largest Financial Services and Investment Banking Companies in the world which is allegedly involved in helping the 1MDB Fund raise billions of dollars enroute private individual’s pockets. Goldman Sachs, which received $600 million in payments for its bond work, has consistently denied any wrongdoing and fund fraud. Goldman Sachs has agreed to a $3.9 billion settlement with Malaysia. Under the settlement, the criminal charges against Goldman and those executives were dismissed. Goldman Sachs is having a good day because if circumstances were worse, it could have to plead guilty to charges in the United States and pay another multibillion-dollar fine. Federal authorities have also been talking to Goldman about appointing a monitor to review its compliance procedures.
Goldman said in a statement the deal with Malaysia “is an important step towards putting the 1MDB matter behind us.”
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