PUTRAJAYA’S suit to recover US$600 million (RM2.48 billion) from Goldman Sachs after the investment bank misled investors in the issuance of 1Malaysia Development Bhd bonds will now be heard at the Kuala Lumpur High Court.

Justice Mohamed Zaini Mazlan allowed the application from the Attorney-General’s Chambers to transfer the case from the magistrates’ court this morning.

The case, involving US$6.5 billion (RM27 billion) in 1MDB bonds issued by UK-based Goldman Sachs International Ltd and Hong Kong-based Goldman Sachs (Asia) LLC, will be heard by the same judge, who is also presiding over the 1MDB audit tampering case in which former prime minister Najib Razak is on trial.

Deputy public prosecutor Norinna Bahadun appeared for the government while lawyer Hisyam Teh Poh Teik represented the investment bank.

Another application to transfer a similar suit against Goldman Sachs (Singapore) to the high court will be heard on December 26.

Zaini set the hearing date after being informed that the summons against the Singapore unit has yet to be served.

On December 19, 2018, the prosecution filed four summonses against Goldman Sachs for allegedly leaving out material facts on the sales of bonds between a subsidiary of 1MDB and Aabar Investments PJS Limited (Aabar).

The offences were allegedly committed at 1MDB headquarters in Kuala Lumpur, between March 19, 2012 and November 11, 2013.

Charges were filed under Section 179 (c) of the Capital Markets and Services Act and punishable under Section 182 of the same law, which provides for a maximum jail term of not more than 10 years and a fine of not less than RM1 million, upon conviction.

On December 19 last year, former Goldman Sachs banking expert Roger Ng Chong Hwa, 46, pleaded not guilty in the Kuala Lumpur Sessions Court for allegedly playing a role in 1MDB-related bond issuance.

The US Department of Justice estimates US$4.5 billion was misappropriated from 1MDB between 2009 and 2014, including some of the funds that Goldman Sachs helped raise.

Bloomberg also recently reported that Goldman Sachs could end up paying less than US$2 billion as part of its settlement with the US Department of Justice.

Finance Minister Lim Guan Eng has said that Putrajaya will proceed with its suit against Goldman Sachs despite a report of the settlement. – December 16, 2019.