Reference no: EM132968741

Goldman Sachs and 1MDB Scandal

 

Goldman Sachs is one of the largest investment banks in world and is based out of New York City, which was founded in 1862. The company was faced with a lawsuit in October of 2020, the company was charged with violating United states bribery law with a southeast Asia country's sovereign wealth fund. The case developed was form happening was a former prime minster of Malaysian Najib Razak was stealing from a state fund and taking the money and putting it in his private bank account. What was Goldman Sachs job throughout this whole thing was that the company was help arranging bonds for 1MDB which is the fund for Malaysia sovereign account and during this large sum of money was stolen during this time.

 

An individualist would believe That Goldman Sachs was maximize the company's profit, but Individualism says to maximize profits but within the law which Goldman Sachs did not do that because it broke the United State bribery law. So, this act goes against Individualism. The second theory Utilitarianism which is to maximize happiness in the case of Goldman Sachs would say That what Goldman Sachs did maximize happiness for the company's stock holders and upper management but at the same time they did not maximize happiness for the people and government of Malaysia. So according to Utilitarianism, this case is unethical.

 

The case was that Goldman Sachs plead guilty in Malaysian bribery case and agreed to pay 2.9 Billion Dollars. The Malaysian Bribery case is That Goldman Sachs violated United states Bribery laws where a large sum of money was stolen from Malaysian Sovereign wealth fund called 1MDB. Golden Sachs was in charge of creating bond sales for the 1MDB fund and They underestimated them which allowed Jho Low who is Malaysian Financer to steal 4.8 billion dollars and put the funds into former prime minster Najib Razak's bank account. Goldman Sachs had arranged three large bonds offering in 2013 and 2012 which raised about $6.8 billion and the bank collect more than $600 million in fees. There were two former Goldman Sachs Bankers that have been accused of helped steal $4.8 billion. Although Goldman Sachs says that the charges are Misdirected. The two main people in the case the former Prime Minster Najib Razak was using the fund as a personal bank account and stealing the money. As well as Jho Low who was a Malaysian investor who was living a lavish lifestyle to purchase yacht and houses. The under lying problem throughout the whole case is greed which is never good in business. Although Goldman Sachs has already settled the case with the with the Malaysian government, they still have plentily to face by the United States Government.

 

a. Elaborate further with regards to Goldman Sach business Ethics Principles in their organization and what are the factors that Goldman Sach have failed in the principles of Business Ethics in an overall perspective? What are the remedies that the Organization could undertake to resolve their ethical issues?

 

b. Discuss in the context of the above case, the role of Corporate Governance Principles in companies.