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Mubadala thumbs down future deals with Goldman Sachs over pending 1MDB suit


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Mubadala thumbs down future deals with Goldman Sachs over pending 1MDB suit

State-owned fund Mubadala Investment Co. suspended future business dealings with Goldman Sachs Group Inc. due to pending litigation concerning the 1MDB corruption scandal, Reuters reported.

Brian Lott, a spokesman for Mubadala Investment, told Reuters the only business deals that will push through are those that were signed prior to the filing of the suit.

A spokesperson for Goldman Sachs declined to comment when contacted by Reuters.

Mubadala Investment units International Petroleum and Aabar Investments PJS in November 2018 filed a lawsuit in New York against Goldman Sachs, alleging that the investment banking giant paid bribes to former 1MDB officials who then allegedly conspired to mislead the two Abu Dhabi investment funds. The two investment funds also claimed Goldman Sachs played a "central role" in the scandal.

Goldman Sachs in December 2018 confirmed to The Straits Times that it proceeded with a $1.75 billion bond sale for 1MDB without seeking approval from International Petroleum's board. International Petroleum served as chief guarantor of the bonds in the transaction.

Goldman Sachs said it only relied on documents provided by the IPIC and legal opinions of outside counsel to provide evidence that the IPIC approved the transaction. Unnamed senior financial executives told The Straits Times the investment banking giant relied on former senior IPIC officials, high-ranking Malaysian government officials and senior IPIC executives so that the sale would push through.

The $1.75 billion bond sale went to finance the Malaysian sovereign wealth fund's investments in the power sector and Goldman Sachs also arranged a $3 billion bond sale for "strategic economic activities for Malaysian and Abu Dhabi interests," according to The Straits Times report.