Prosecutors allege that bond sales organised by Goldman Sachs were one means for associates of Najib to steal billions.

Najib set up 1MDB when he took office in 2009, but it accumulated billions in debts and U.S. investigators allege at least $4.5billion was stolen from the fund and laundered by Najib's associates

Malaysia has filed criminal charges against 17 more current and former directors at three Goldman Sachs subsidiaries for their role in the alleged multibillion-dollar ransacking of state investment fund 1MDB.

Prosecutors from Malaysia and the United States allege that bond sales organised by Goldman Sachs for 1MDB provided one of the means for associates of former Malaysian Prime Minister Najib Razak to steal billions over several years from a fund that was ostensibly set up to accelerate Malaysia's economic development.

The government in December filed criminal charges against Goldman Sachs and two former executives for breaches of securities laws, including making false, misleading statements to investors.

Attorney General Tommy Thomas said on Friday the 17 people charged in the most recent filings were charged under the Malaysian Capital Markets and Services Act for conniving to commit the significant fraud.

“Custodial sentences and criminal fines will be sought against the accused ... given the severity of the scheme to defraud and fraudulent misappropriation of billions in bonds proceeds,” Thomas said in a statement.

Najib set up 1MDB when he took office in 2009, but it accumulated billions in debts and US investigators allege at least $4.5bn was stolen from the fund and laundered by Najib's associates.

Public anger over the alleged corruption contributed to the shocking election defeat of Najib's long-ruling coalition in May 2018, and the new government reopened investigations that had been stifled while Najib was in office.

Najib is currently on trial for alleged criminal breach of trust, abuse of power and money laundering. He denies the charges. His wife and stepson have also been charged in the case.

Charges 'misdirected'

Former Goldman Sachs executive Roger Ng was arrested in Malaysia last year and has been extradited to the US, where he also faces charges.

Malaysia's current government has also filed criminal charges against Goldman Sachs and is seeking $7.5bn in compensation from the bank.

Goldman Sachs has consistently denied wrongdoing and said certain members of the former Malaysian government and 1MDB lied to Goldman Sachs, outside counsel and others about the use of transaction proceeds.

“We believe the charges announced today, along with those against three Goldman Sachs entities announced in December last year, are misdirected and will be vigorously defended,” said a Goldman Sachs spokesman in Hong Kong.

“Under the Malaysian legal process, the firm and the individual entity directors were not afforded an opportunity to be heard prior to the filing of these charges,” added the spokesman, saying that they “do not affect our ability to conduct our current business globally.”

Those charged on Friday include Richard Gnodde, chief executive of Goldman Sachs International, Michael Evans, president of Alibaba Group Holding Ltd and a former director at Goldman Sachs (Asia) LLC, and Michael Sherwood, former vice chairman of Goldman Sachs Group. (Aljazeera)

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