Skip to main content

Advertisement

Advertisement

Asia

Malaysia, Goldman discuss smaller penalty over 1MDB scandal: Report

Malaysia, Goldman discuss smaller penalty over 1MDB scandal: Report

A man walks past a 1 Malaysia Development Berhad (1MDB) billboard at the funds flagship Tun Razak Exchange development in Kuala Lumpur, Mar 1, 2015. (Photo: Reuters/Olivia Harris)

KUALA LUMPUR: Malaysia has discussed a US$2 billion to US$3 billion settlement with Goldman Sachs over the US bank's alleged role in the 1MDB scandal, Bloomberg reported on Wednesday (Oct 23), less than half the sum the Southeast Asian nation had demanded earlier.

Investigators in Malaysia and the United States say about US$4.5 billion was misappropriated from the now-defunct state investment fund 1Malaysia Development Berhad, set up in 2009 by former prime minister Najib Razak who has been slapped with several charges.

READ: Malaysia aims to recover nearly US$1 billion paid out by former 1MDB unit 

READ: Former Malaysian PM Najib stakes claim for seized 1MDB assets, cash

Last year, Malaysia filed criminal charges against Goldman over its role as underwriter and arranger of three bond sales that raised US$6.5 billion for 1MDB. Prosecutors in August filed criminal charges against 17 current and former directors at Goldman's units.

Malaysia's finance minister said in January the government would be ready to discuss dropping the charges against Goldman if it agreed to pay US$7.5 billion in reparations. Goldman has not commented on any figure but said last year it had set aside US$1.8 billion to cover potential losses related to 1MDB legal proceedings.

Citing people with knowledge of the matter, Bloomberg said Malaysian Prime Minister Mahathir Mohamad was keen to reach a deal with Goldman this year itself as the government grapples with a high debt burden.

Goldman declined to comment on the report. A spokesman for Mahathir had no immediate comment.

READ: Najib, 1MDB and billions of dollars - A look back at one of Malaysia’s biggest corruption scandals

The country's attorney-general said recently that they had a strong case against Goldman and were very confident of winning, but that criminal charges and settlement negotiations were taking place in parallel.

The bank said last week it was in discussions with governmental and regulatory authorities on the possibility of a resolution of investigations relating to 1MDB.

Najib, who lost a general election last year, is now facing dozens of graft and money laundering charges over allegations that he received about US$1 billion in 1MDB funds. He has pleaded not guilty.

FILE PHOTO: Former Malaysian Prime Minister Najib Razak and his wife Rosmah Mansor attend an Anti-ICERD (International Convention on the Elimination of All Forms of Racial Discrimination) mass rally in Kuala Lumpur, Malaysia, December 8, 2018. REUTERS/Sadiq Asyraf

Attorney-General Tommy Thomas said at a trial on Tuesday in one of Najib's cases that the former premier acted like an "emperor" who orchestrated massive fraud at a former unit of 1MDB. Najib's lawyer is expected to rebut the prosecution’s case on Wednesday.

A ruling on whether to acquit Najib or call for him to enter his defence will be delivered on Nov 11.

READ: Cash, items seized from Najib-linked premises worth around RM1.1 billion - Malaysia police

Separately, Lebanese jeweller Global Royalty withdrew on Tuesday a civil suit against Najib's wife Rosmah Mansor, their lawyers said. The firm had sought more than US$14 million in jewellery that it said were in her possession.

Global Royalty would instead focus on intervening in the government's forfeiture proceedings against the owner of a property from which jewellery were seized by police, its lawyer told local media.

Najib and Rosmah were barred from leaving Malaysia soon after his surprise election loss last year, and their lifestyle came under scrutiny especially after the discovery of nearly US$300 million worth of goods and cash at properties linked to him. 

Source: Reuters

Advertisement

Also worth reading

Advertisement