Goldman Sachs reaches $3.9bn settlement with Malaysia over 1MDB scandal
Jul 24, 2020
Kuala Lumpur [Malaysia], July 24 : Malaysia has reached a USD 3.9 billion settlement with American multinational investment bank, Goldman Sachs, over losses incurred from a multibillion-dollar scandal at the country's 1MDB investment fund.
As per Al Jazeera reports, the deal announced on Friday includes a USD 2.5 billion cash payout by the Wall Street giant to the Malaysian government and a guarantee to return at least USD 1.4 billion in assets linked to 1MDB bonds.
"This settlement represents assets that rightfully belong to the Malaysian people. We are confident that we are securing more money from Goldman Sachs compared to previous attempts, which were far below expectations," Tengku Zafrul Abdul Aziz, Malaysia's finance minister, was quoted as saying.
"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 that the deal would resolve all outstanding charges and claims against Goldman Sachs.
Billions of dollars were looted from 1Malaysia Development Berhad or 1MDB, a now-defunct investment fund ostensibly set up to accelerate Malaysia's economic development, in a fraud that allegedly involved former Malaysian Prime Minister Najib Razak and his cronies.
Malaysian prosecutors filed charges in December 2018 against three Goldman Sachs units for misleading investors over bond sales totalling USD 6.5 billion that the bank helped raise for 1MDB, with Malaysia claiming large amounts were misappropriated during the process.
The bank on Friday confirmed the USD 3.9 billion settlement and said it had reached an agreement in principle with Malaysia to resolve all criminal and regulatory proceedings in the country involving the firm.
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.
Two former Goldman Sachs bankers have been charged for their alleged role in helping 1MDB launder money.
The settlement came days before 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.
The former prime minister has denied any wrongdoing and pleaded not guilty to all the charges against him.
