Goldman Sachs, Malaysia agree to US$3.9 billion settlement over 1MDB

Goldman Sachs, Malaysia agree to US$3.9 billion settlement over 1MDB

Goldman Sachs raised $6.5 billion for Malaysia's 1MDB fund, and is accused of bribery in the
Goldman Sachs raised US$6.5 billion for Malaysia's 1MDB fund, and was accused of bribery in the scandal that siphoned off billions. (AFP/Johannes EISELE)

KUALA LUMPUR: US investment bank Goldman Sachs has reached a US$3.9 billion settlement with the Malaysian government over the multibillion-dollar 1MDB scandal, the two sides said on Friday (Jul 24).

The deal includes a $2.5 billion cash payout by Goldman and a guarantee by the bank to return at least $1.4 billion in assets linked to 1MDB bonds, Malaysia’s finance ministry said in a statement.

“We are confident that we are securing more money from Goldman Sachs compared to previous attempts, which were far below expectations,” Finance Minister Tengku Zafrul Aziz said in a statement.

“We are also glad to be able to resolve this outside the court system, which would have cost a lot of time, money and resources,” he said, adding the deal would resolve all outstanding charges and claims against Goldman Sachs.

Malaysian prosecutors filed charges in December 2018 against three Goldman Sachs units for misleading investors over bond sales totalling $6.5 billion that the bank helped raise for sovereign wealth fund 1MDB (1Malaysia Development Bhd).

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

Goldman Sachs has consistently denied wrongdoing, saying that certain members of the former Malaysian government and 1MDB lied to it about how proceeds from the bond sales would be used. The units of Goldman Sachs pleaded not guilty to the charges.

"We are pleased to have reached an agreement in principle with the Government of Malaysia to resolve outstanding charges and claims against Goldman Sachs," the bank said in a statement. "Today's settlement is an important step towards putting the 1MDB matter behind us."

Ex-PM Najib Razak is currently facing three, 1MDB-linked trials, and the verdict in the first is due
Najib Razak is currently facing three 1MDB-linked trials and the verdict in the first is due to be handed down on Jul 28, 2020. ((Photo: AFP/Mohd Rasfan)

US and Malaysian authorities say about $4.5 billion was stolen from 1MDB, in an elaborate scheme that spanned the globe and implicated former Malaysian Prime Minister Najib Razak and Goldman Sachs, among others.

A Malaysian court will deliver its verdict in the case against Najib on Tuesday, the first of several corruption trials he faces linked to the 1MDB scandal.

Najib has denied any wrongdoing and pleaded not guilty to all the charges against him.

Source: Reuters/kv

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