A $3.9 billion settlement with the Malaysian government has been reached by the United States based lender and investment bank Goldman Sachs to settle the case of the multibillion-dollar 1MDB scandal, both the entities said on Friday.
Malaysia’s finance ministry said in a statement that a $2.5 billion cash payout by Goldman as well as a guarantee by the bank to return at least $1.4 billion in assets linked to 1MDB bonds is included in the deal between the two parties.
“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. He added that all outstanding charges and claims against Goldman Sachs would be resolved by the deal.
Charges against three Goldman Sachs units were filed in December 2018 by Malaysian prosecutors which involved charges of the bank’s units misleading investors in the sale of bond totaling $6.5 billion and the arising of this fund was aided by the bank. The fund as for the Malaysian sovereign wealth fund 1MDB or the 1Malaysia Development Bhd.
All allegations of wrongdoings have been consistently refuted by Goldman Sachs. The US investment bank has said that it had been lied to about the bond and how the proceeds from sale of the bonds would be used by certain members of the former Malaysian government and 1MDB.
The units of Goldman Sachs pleaded not guilty to the charges.
Confirming the $3.9 billion settlement deal, Goldman Sachs said that an agreement in principle had been reached by it with Malaysia to resolve all criminal and regulatory proceedings involving the company in the country.
About $4.5 billion was stolen from 1MDB, according to results of investigations into the issue carried out by US and Malaysian authorities. It has been reported that an elaborate scheme had been planned for the heist that was spread all across the world. The investigations pointed the finger at the former Malaysian Prime Minister Najib Razak and Goldman Sachs, among others.
Multiple cases in this regard are ongoing in Malaysian courts.
Najib has denied any wrongdoing and pleaded not guilty to all the charges that have been pressed against him.
(Adapted from CNBC.com)