Advertisements

Deutsche Bank Ensnared by Billion-Dollar Malaysian Fund Scandal

A multi-billion-dollar fraud scandal perpetrated by an investment arm of the Malaysian government appears to have ensnared another major global financial institution — Deutsche Bank  (DBGet Report) — which already is reeling from massive restructuring efforts.

The Wall Street Journal reported on Thursday that the Justice Department is investigating whether the German lender violated foreign corruption or anti-money-laundering laws in its work for the 1Malaysia Development Bhd. fund, which included helping the fund raise $1.2 billion in 2014 as concerns about the fund’s management and financials had begun to circulate.

Download Now: To be a profitable investor you first need to know the rules. Get Jim Cramer’s 25 Rules for Investing Special Report

The investigation comes amid a massive overhaul of the Munich-based bank announced over the weekend, which includes layoffs in the thousands and the creation of a separate entity for bad loans, debt and other problem investments and holdings that have plagued the bank since the 2008 global financial crisis.

Investigators reportedly have been assisted by former Goldman Sachs executive, Tim Leissner, the Journal said, citing people familiar with the matter. Prosecutors have been investigating similar issues at Goldman, where Leissner, a former managing director, pleaded guilty last year to helping re-direct billions of dollars from the 1MDB fund.

A state economic-development fund, 1MDB turned into a major global scandal after billions of dollars were drained from it between 2009 and 2014, leading to multiple government investigations and the downfall of former Malaysian Prime Minister Najib Razak.

The Department of Justice has said the stolen money totals at least $4.5 billion and that it was used to pay bribes to government officials, pad a slush fund controlled by the former prime minister and purchase hundreds of millions of dollars in luxury goods and real estate.

Shares of Deutsche Bank were down 0.54% at $7.36 in early trading in New York on Thursday.

By:

Source: Deutsche Bank Ensnared by Billion-Dollar Malaysian Fund Scandal – Report

Advertisements

Singapore Starts Probing Goldman Sachs for 1MDB Scandal

1.jpg

Singapore’s law enforcement authorities have extended their criminal probe against the Malaysian state investment fund 1Malaysia Development Berhad (1MDB) to include Goldman Sachs, according to a Bloomberg report.

Although the city-state’s authorities have been investigating Goldman Sachs’ involvement with the Malaysian scandal-plagued firm since 2017, now they are focusing on the firm’s local unit. The primary focus of the investigation is to see if Goldman’s Singapore subsidiary was involved in moving around $600 million acquired from the three controversial bond deal sales from 2012 to 2013.
The Scandal Explained

1MDB came under the limelight soon after its establishment in 2009, which was then chaired by the former Malaysian Prime Minister Najib Razak. Leaked financial documents surfaced that huge sums of money were borrowed via government bonds and syphoned into bank accounts in Switzerland, Singapore, and the US.

%d bloggers like this:
Skip to toolbar