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Goldman Sachs, Malaysia Reached $3.9 Billion Settlement Over 1MDB Fiasco

  • Goldman Sachs has reached a US$ 3.9 billion settlement with the Malaysian government over the multibillion-dollar 1MDB scandal.
  • The deal includes Goldman’s $2.5 billion cash payout, and a bank guarantee to return at least $1.4 billion in assets related to 1MDB bonds, said Malaysia’s finance ministry in a statement.
  • Goldman Sachs has consistently denied wrongdoing, saying that some members of the former Malaysian government and 1MDB were lying to it about how the bond sales proceeds would be used.
  • Visit The Financial Today’s homepage for more stories.

Kuala Lumpur • Goldman Sachs, the US investment bank, has reached a US$ 3.9 billion settlement with the Malaysian government over the multibillion-dollar 1MDB scandal, both sides said Friday.

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

“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.

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

Goldman Sachs has consistently denied wrongdoing, saying that some members of the former Malaysian government and 1MDB were lying to it about how the bond sales proceeds would be used. Goldman Sachs units pleaded not guilty to the charges against them.

“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.”

The US and Malaysian authorities believe around $4.5 billion had been looted from 1MDB, in an intricate scheme that spanned the globe and included, among others, former Malaysian Prime Minister Najib Razak and Goldman Sachs.

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

Najib denied any misdemeanors and pleaded not guilty to all charges against him.

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[Reuters]

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