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22 Nov, 2018 09:39

Abu Dhabi sues Goldman Sachs over ‘central role’ in bribery scam

Abu Dhabi sues Goldman Sachs over ‘central role’ in bribery scam

US investment bank Goldman Sachs has been accused by an Abu Dhabi sovereign-wealth fund of playing a key role in an international corruption scandal and enabling bribes to former top executives at the fund.

International Petroleum Investment Company (IPIC) and its subsidiary Aabar filed a lawsuit against Goldman in a state court in New York. IPIC is a one-time investment partner of scandal-struck 1Malaysia Development fund, or 1MDB.

“Goldman Sachs conspired with others to bribe IPIC’s and Aabar’s former executives,” the court filing said.

IPIC is seeking unspecified punitive damages from Goldman and individuals, including Tim Leissner, a former partner at the bank who has pleaded guilty to conspiracy charges over the affair.

The Abu Dhabi fund claims Goldman conspired with others to bribe former executives of IPIC and Aabar, inducing them to “misuse the companies’ names, networks, and infrastructures to further the criminal schemes and to personally benefit Goldman Sachs” and others.

The US bank said it intends to fight the charges. “We are in the process of assessing the details of allegations and fully expect to contest the claim vigorously,” a Goldman Sachs spokesman said.

The long-running 1MDB scandal involves high-ranking Malaysian officials including former Prime Minister Najib Razak who have been accused of helping to loot $4.5 billion from the Malaysian government fund.

READ MORE: Goldman Sachs executive takes ‘personal leave’ amid Malaysian fund corruption probes

In 2015, IPIC guaranteed billions of dollars in bonds arranged by Goldman Sachs and issued by 1MDB. When the Malaysian fund defaulted, the country’s government agreed to repay IPIC in a settlement that has since been challenged by Malaysia’s new government.

Earlier this month, the US Justice Department announced that Goldman's Leissner pleaded guilty to conspiring to launder money and conspiring to violate the Foreign Corrupt Practices Act through the payment of bribes to government officials in Malaysia and Abu Dhabi.

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