Newly installed Goldman Sachs CEO David Solomon has defended the investment bank's handling of the scandal-plagued Malaysian fund 1MDB stating that much of the criticism of the bank was unfair.
In a year-end message to employees, David said, “I cannot stress enough how integrity is a cornerstone of our culture.”
He further that the bank was working with the Malaysian authorities to bring to justice the culprits involved in the scandal. The bank had helped 1Malaysia Development Berhad (1MDB) to issue $6.5 Bn of bonds but Malaysia has accused the bank and its former employees of misappropriating $2.7 Bn during the process.
Consequently, Malaysia filed criminal charges against Goldman Sachs and two of its former employees over the alleged theft of funds which were splurged on yachts to artwork.
While David expressed his limits on how much to share on the ongoing probe, but defended the bank's role in the scandal. He said that while the bank understands the anger and skepticism, yet it does not believe that the criticism directed at it accurately reflects “who we were then or who we are now.”
He added. “We believe our culture and our processes around our due diligence and compliance was strong at the time, and is even stronger today."
The bank had conducted due diligence of the bond offerings and had not anticipated that a group of individuals and foreign officials would orchestrate such a brazen scheme, he added.
While the probe in due course of time would reveal if the bank was liable for misappropriation or not, for now, it seems Goldman Sachs finds itself embroiled in a scandal that could raise much concern about its standard of ethics in Malaysia. Meanwhile, Malaysia has sought jail terms and billions in fines from the investment bank and four individuals who allegedly misappropriated the $2.7 Bn from the 1MDB bond proceeds.
Image Credits: Abc.net.au