The fallout from a Malaysian bribery scandal continues to plague Goldman Sachs, with news on Wednesday that an Abu Dhabi sovereign-wealth fund is suing the investment bank for its involvement.
Abu Dhabi’s International Petroleum Investment Co (IPIC) said on Wednesday that is has filed a lawsuit against Goldman for damages incurred in dealings with the Malaysian 1MDB development fund. Several executives in the US investment bank have been implicated in an ongoing bribery scandal linked to the fund.
IPIC “played a central role in a long-running effort to corrupt former executives of IPIC and its subsidiary Aabar Investments, and mislead IPIC and Aabar,” the Abu Dhabi fund said in a statement reported by Reuters.
“We are in the process of assessing the details of the allegations and fully expect to contest the claim vigorously,” a Goldman spokesman was quoted as saying.
According to The Financial Times, IPIC guaranteed billions of dollars of bonds issued by 1MDB, an arrangement that the sovereign-wealth fund says had been brokered by Goldman.
The US investment bank has denied any knowledge of bribery and embezzlement.
Also on Wednesday, rival investment bank Morgan Stanley downgraded Goldman’s stock to “equal-weight,” citing concerns about the US Justice Department investigation into the 1MDB scandal.
“It is unclear how long the issue will take to resolve, what the fines and penalties could be, and what costs Goldman Sachs will subsequently incur to satisfy any demands from regulators,” Morgan Stanley analyst Betsy Graseck wrote, per CNBC.
“These risks, coupled with potential headline risks in the coming months (additional lawsuits, additional regulatory probes, internal reviews), drive our Equal-weight rating.”
Goldman Sachs sends Malaysia into a bottonless debt spiral. So much for all the writings on Malaysia having to cancel BRI projects. Now the country is paying through its nose, hugh debts at super high interest.
Goldman Sachs sends Malaysia into a bottonless debt spiral. So much for all the writings on Malaysia having to cancel BRI projects. Now the country is paying through its nose, hugh debts at super high interest.