Goldman chief says sorry over ex-banker’s role in 1MDB scandal | Business

The chief executive of Goldman Sachs has apologised to the people of Malaysia over the role of a former employee of the bank in the 1MDB scandal.

In a rare move for a Goldman chief executive, David Solomon joined the company’s fourth-quarter earnings call and gave an update on investigations into corruption surrounding the Malaysian sovereign wealth fund. He also said the bank was sorry for the effect the fraud had on the country.

“It’s very clear that the people of Malaysia were defrauded by many individuals including the highest members of the prior [Malaysian] government,” he said. “Tim Leissner, who was a partner at our firm, by his own admission, was one of those people. For Leissner’s role in that fraud, we apologise to the Malaysian people.”

The investment bank has consistently denied wrongdoing, and said it was lied to about how the proceeds of three bond sales it conducted on the fund’s behalf between 2012-2013 were used. Solomon echoed the bank’s stance on Wednesday.

US prosecutors allege that about $4bn (£3.1bn) in total vanished from 1MDB, with proceeds used to invest in luxury New York real estate, expensive artworks and Hollywood films including the The Wolf of Wall Street.

Leissner was one of a handful of individuals charged by US and Malaysian prosecutors late last year over their involvement in the scandal. Among them were the Malaysian financier Jho Low, who has been accused of working as an intermediary and masterminding the fraud. He is still at large.

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News reports claim Goldman’s former chief executive, now chairman, Lloyd Blankfein, held initial meetings with Low. While Solomon did not directly address those reports, he said the bank was sceptical of Low’s dealings.

Solomon confirmed that Goldman declined Low’s request to open a private wealth account in 2010 because the bank could not verify the source of the financier’s wealth. “Out of prudence we also declined to advise or represent Low and other opportunities he presented to us between 2011 and 2014,” he added.

Solomon also maintained that the bank was lied to over the role of any intermediary in the 1MDB bond sales.“

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