Abu Dhabi sovereign fund halts new business with Goldman Sachs
Mubadala suspends activities pending outcome of litigation related to 1MDB scandal
Abu Dhabi’s state investment company has halted all new dealings with Goldman Sachs, piling pressure on the Wall Street bank that has been dragged into the multibillion-dollar embezzlement scandal linked to Malaysian state investment fund 1MDB.
“We have suspended any activities with Goldman Sachs pending [the] outcome of the litigation,” said Brian Lott, a spokesman of Mubadala Investment Company in a statement. “The only exceptions are engagements signed prior to the litigation, which will continue as per contractual terms”.
Goldman declined to comment on Mubadala's suspension.
The International Petroleum Investment Company, a Mubadala unit and former partner of 1MDB, in November sued Goldman, accusing the US bank of bribing its officials during a “massive global conspiracy”.
IPIC filed a lawsuit in New York 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.
In November, Goldman said it was “in the process of assessing the details” of the IPIC lawsuit and expected to contest it “vigorously”.
In 2015, IPIC guaranteed billions of dollars of bonds arranged by Goldman and issued by 1MDB, from which the US Department of Justice alleges $4.5bn have gone missing. After the Malaysian fund defaulted, the government in Kuala Lumpur at the time agreed to repay IPIC in a settlement that has since been challenged by the new government.
The suspension comes after the Malaysian Securities Commission on Thursday announced it issued a “show cause” letter to Goldman in December, a document that typically requires companies to explain why they should not face disciplinary action for contentious issues. Goldman also declined to comment on the “show cause” letter.