Goldman seals deal with Putrajaya to escape criminal liability in Malaysia over 1MDB

19-Aug-2020 Intellasia | Malay Mail | 9:45 AM Print This Post

The government has signed an agreement with Goldman Sachs Group Inc to finalise a $3.9 billion (RM16.3 billion) settlement over the 1MDB scandal, after it was first agreed to in principle last month.

Bloomberg reported Goldman as confirming the formal accord in a regulatory filing late yesterday in New York, and cited anonymous sources as saying the firm must make a $2.5 billion cash payment to Malaysia within 10 days.

The deal announced in July called for Goldman to pay $2.5 billion while guaranteeing the return of $1.4 billion (RM5.8 billion) of 1MDB assets seized by authorities around the world, in exchange for Malaysia dropping charges against the bank.

However, former Malaysian officials including ex-prime minister Tun Dr Mahathir Mohamad and former attorney general Tan Sri Tommy Thomas have pointed out that the $1.4 billion in assets came at no cost to Goldman as these were already seized by other governments including the US.

They also insisted that the $2.5 billion was far below what Goldman should have paid in reparations to Malaysia.

It is understood the Malaysian settlement does not resolve other pending governmental and regulatory probes related to 1MDB concerning Goldman, including one from the United States’ Department of Justice.

The agreement helps Goldman move on from its worst scandal since the financial crisis, while Malaysia gets to recoup much of the $4.5 billion that is believed to have been embezzled from 1MDB, especially when funds are needed to counter the impact of Covid-19 on the national economy.

The bank helped 1MDB raise $6.5 billion in funds in 2012 and 2013, with its investment banking group then headed by current chief executive officer David M. Solomon being paid approximately $600 million from the bond sales.


Category: Malaysia

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