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Goldman Sachs CEO apologises for ex-banker's role in 1MDB scandal

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Goldman Sachs CEO apologises for ex-banker's role in 1MDB scandal
FILE PHOTO: Men walk past a 1Malaysia Development Berhad (1MDB) billboard at the fund's flagship Tun Razak Exchange development in Kuala Lumpur March 1, 2015. REUTERS/Olivia Harris/File Photo   -   Copyright  Olivia Harris(Reuters)
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(Reuters) – Goldman Sachs <GS.N> Chief Executive Officer David Solomon on Wednesday apologised to the Malaysian people for former banker Tim Leissner’s role in the sovereign wealth fund 1MDB scandal, but said the bank had conducted due diligence before every transaction.

U.S prosecutors last year charged two former Goldman bankers for the theft of billions of dollars from 1MDB. Leissner, a former partner for Goldman Sachs in Asia, pleaded guilty to conspiracy to launder money and violate the Foreign Corrupt Practices Act.

“When control functions in the firm asked if each transaction whether intermediaries were involved, they were told no. Leissner himself said no intermediaries were involved in the transaction,” Solomon said on a post-earnings conference call with analysts.

Goldman is being investigated by Malaysian authorities and the U.S. Department of Justice for its role as underwriter and arranger of three bond sales that raised $6.5 billion (£5 billion) for 1MDB.

The DOJ has said that $4.5 billion was misappropriated by high-level officials of the fund and their associates between 2009 and 2014.

(Reporting By Aparajita Saxena in Bengaluru; Editing by Arun Koyyur)

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