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Malaysia seeks to amend 1MDB charges against Goldman Sachs

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Malaysian prosecutors will seek to amend charges against three Goldman Sachs Group units in the case involving troubled state fund 1MDB.

[KUALA LUMPUR] Malaysian prosecutors will seek to amend charges against three Goldman Sachs Group units in the case involving troubled state fund 1MDB.

Prosecutors will be seeking amendments involving liability, with Goldman's lawyers arguing the proposed changes would be substantial, according to proceedings at the Kuala Lumpur High Court on Thursday. The court set Sept 4 for the next case management hearing.

The US bank is accused of misleading investors when it arranged US$6.50 billion of bond sales for 1MDB while allegedly knowing that the funds would be misappropriated. Prosecutors are seeking fines in excess of the US$2.70 billion allegedly misappropriated from the proceeds, and the return of US$600 million of fees received by Goldman.

1MDB is at the centre of global investigations, with US prosecutors alleging US$4.50 billion was siphoned from the Malaysian investment fund. The scandal has roiled Malaysian politics and led to lifetime bans against Goldman bankers including Andrea Vella and Tim Leissner from the financial industry. Leissner has pleaded guilty in the US to charges including conspiring to launder money.

The case involving the bank's three units had been on hold as Malaysia imposed restrictions on people's movement since March to contain the pandemic, with most activities now allowed to resume since last week. The case was transferred to the High Court in February, a step toward advancing the proceedings that have dragged on since the criminal charges were first announced in December 2018.

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Since then, Malaysia has gone through a change of government that saw the departure of former Prime Minister Mahathir Mohamad, who had pledged to bring those involved in the 1MDB scandal to justice, and Tommy Thomas, the former attorney-general who filed the charges against Goldman and said he was ready to bring the bank to court.

Current Prime Minister Muhyiddin Yassin has promised to continue fighting corruption and bring back funds missing from 1MDB. His government faced backlash after striking a deal to drop 1MDB-related charges against the stepson of former leader Najib Razak, who faces his own set of cases linked to the scandal-ridden fund.

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