U.S. securities regulators allege that former Malaysian Prime Minister Najib Razak received kickbacks involving sovereign wealth fund 1MDB, as American authorities publicly link him to the multibillion-dollar corruption scandal for the first time.
The onetime leader is currently on trial in Malaysia, facing a litany of charges connected to the scandal.
The U.S. Securities and Exchange Commission cites Najib as a key figure in a corruption case brought against Tim Leissner, a former Goldman Sachs executive. The SEC issued an order permanently banning Leissner from the financial industry as part of a settlement deal announced Monday with the former investment banker.
Known formally as 1Malaysia Development Berhad, the sovereign wealth fund raised billions of dollars in a series of bond offerings with Goldman Sachs. Leissner worked with others to misappropriate more than $2.7 billion as part of a scheme to secure business for the American investment giant, the SEC order said.
The money was distributed “as bribes and kickbacks to government officials in Malaysia and Abu Dhabi, including but not limited to Najib Razak,” the SEC order said. U.S. officials previously referred only to “government officials” without naming Najib.
Furthermore, the SEC alleges there was an illicit transfer of $1.3 million for the purpose of paying for jewelry for Rosmah Mansor, Najib’s wife.
The agency also says that Malaysian businessman Low Taek Jho transferred $200 million into accounts controlled by Leissner. The fugitive financier known as Jho Low, once a close associate of Najib, is considered the mastermind behind the 1MDB scandal.
The SEC order, resulting from a settlement offer by Leissner, paints the former executive as engaging in a host of corrupt practices to secure a lucrative payday from 1MDB’s bond sales. For example, Leissner falsely told a Goldman Sachs committee that Low was not involved in a 1MDB bond transaction.
Leissner tried to make Low a formal Goldman Sachs client, but was rebuffed at least three times by internal compliance officers.
Najib faces 42 criminal counts in Malaysia, including abuse of power and money laundering charges. Najib has declared himself innocent of all criminal wrongdoing.
Source : Asia Nikkei