Malaysia has reached a $ 3.9 billion settlement with Goldman Sachs over the losses suffered by a multi-million dollar scandal in the country’s 1MDB investment fund.
The deal announced Friday includes a $ 2.5 billion cash payment by the Wall Street giant to the Malaysian government and a guarantee to return at least $ 1.4 billion in assets linked to 1MDB bonds.
“This deal represents assets that legitimately belong to the people of Malaysia. 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, said.
“We are also pleased to be able to resolve this outside of the court system, which would have cost a lot of time, money and resources,” he said, adding that the settlement would resolve all pending charges and claims against Goldman Sachs.
Billions of dollars were looted from 1 Malaysia Development Berhad or 1MDB, a now defunct investment fund apparently established 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 units of Goldman Sachs for misleading investors into sales of bonds totaling $ 6.5 billion that the bank helped raise for 1MDB, and Malaysia claimed that large amounts were misappropriated during the process.
The bank confirmed the $ 3.9 billion deal on Friday and said it had reached an agreement in principle with Malaysia to resolve all criminal and regulatory procedures in the country involving the company.
Goldman Sachs has always denied the allegations, saying that members of the former Malaysian government and 1MDB lied to it about how the proceeds from bond sales would be used. Goldman Sachs units 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 issued its verdict in the case against Najib on Tuesday, the first of several corruption trials it faces related to the 1MDB scandal.
The former prime minister denied wrongdoing and pleaded not guilty to all charges against him.
SOURCE:
Al Jazeera and news agencies
.
