Abu Dhabi fund to sue Goldman Sachs over 1MDB scandal

Goldman Sachs is facing legal action from an Abu Dhabi sovereign wealth fund over the investment bank’s alleged role in the collapse of the 1Malaysia Development Behad (1MDB) fund.

International Petroleum Investment Company (IPIC) and its subsidiary Aabar Investment filed the lawsuit in a New York state court. They are seeking “damages and other appropriate relief for the significant financial exposure and losses… suffered as a result of fraudulent and illegal acts”.

The 1MDB scandal broke back in 2015 when Malaysia’s then prime minister Najib Razak was accused of embezzling nearly $700 million from the government-run fund. The US department of justice has since claimed that more than $4.5 billion has been laundered from the fund over a period of six years by various Malaysian officials and others.

Among the others alleged to have become involved in the embezzling are two IPIC executives – managing director Khadem Abdulla Al-Qubaisi and former Aabar CEO Mohamed Ahmed Badawy Al-Husseiny who are both named as defendants in the IPIC action.

The suit alleges that Goldman Sachs and three of its Asian subsidiaries engaged in an international conspiracy and, as part of the scheme, bribed IPIC and Aabar executives to participate in the fraudulent scheme and act against the company.

Goldman Sachs, which has 30 days to respond to the summons, has stated that it is “in the process of assessing the details of the allegations and fully expect to contest the claim vigorously”.

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