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AG preparing civil suit against Goldman Sachs

KUALA LUMPUR: Attorney-General Tommy Thomas is reportedly preparing a civil suit against Goldman Sachs to seek USD4.5 billion (RM18.8 billion) in damages over the latter’s role in raising funds which were later misappropriated from 1Malaysia Development Bhd (1MDB).

An Asia Times report, quoting sources familiar with the preparation, said the legal action will be filed in the United States (US) courts.

The move is set to be the latest legal action taken against the investment bank for its dealings with the sovereign fund, said the report.

1MDB is currently the subject of corruption and money-laundering investigations in at least six countries, including the US.

The report said the argument against Goldman by Thomas will centre on the knowledge of the fraud having reached the highest level of the bank’s management.

The report, quoting the same sources, said that among those expected to be accused include senior Goldman executives, who have yet to be charged in a recently-filed US Department of Justice (DoJ) criminal case.

“Specifically, the case will argue that senior Goldman executives knew that proceeds from three 2012 1MDB bond issues the bank arranged were funneled into a company, Aabar BVI, which was set up in the British Virgin Islands to resemble a similarly named company, Aabar Investments, belonging to the guarantor of the bonds, Abu Dhabi’s International Petroleum Investment Company (IPIC),” said the source.

The report said the USD4.5 billion (RM18.8 billion) civil suit would significantly up the ante of the government’s earlier complaints against Goldman and could lead to a new sell-off of the New York-based investment bank’s publicly listed shares.

On Nov 12, Finance Minister Lim Guan Eng said the Malaysian government will reclaim the USD600 million (RM2.5 billion) fees paid to Goldman for its work with 1MDB.

The amount was paid to the investment bank for raising three bond offerings a total of USD6.5 billion (RM27.2 billion) between 2012 and 2013.

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