Goldman Sachs reaches $3.9bn settlement with Malaysia over 1MDB scandal
Goldman Sachs has agreed to a $3.9bn settlement with the Malaysian government over the multi-billion dollar 1MDB scandal.
The deal includes a cash payment of $2.5bn and a guarantee by Goldman to pay at least $1.4bn in assets linked to 1MDB bonds, Malaysia’s finance ministry said.
“This settlement represents assets that rightfully belong to the Malaysian people,” said Tengku Dato’ Sri Zafrul Aziz, the Minister of Finance. “We are confident that we are securing more money from Goldman Sachs compared to previous attempts, which were far below expectations.”
Malaysian prosecutors filed charges in December 2018 against three Goldman Sachs units for misleading investors over bond sales of %6.5bn that the bank helped raise for sovereign wealth fund 1MDB.
The units pleaded not guilty to the charges and the investment bank has consistently denied wrongdoing, saying members of the former Malaysian government and 1MDB lied about how the proceeds from the bond sales would be used.
The US Department of Justice alleges a total of $4.5bn was misappropriated from 1MDB.
“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. With this settlement, we will have the return of the monies expedited, and not held up by lengthy and costly court battles and legal process,” Zafrul added.
In a statement Goldman Sachs said: “We are pleased to have reached an agreement with the Government of Malaysia to resolve outstanding charges and claims against Goldman Sachs.”
“Today’s settlement is an important step towards putting the 1MDB matter behind us and will help enable the Malaysian government to move forward with additional recovery efforts and to execute on its economic priorities.”