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KUALA LUMPUR: Goldman Sachs paid Malaysia $ 2.5 billion as part of a deal on the US investment bank’s role in the 1MDB multi-million dollar scandal, officials said on Friday (August 28).
The deal, which has a total value of $ 3.9 billion, was announced last month after lengthy negotiations.
Billions of dollars were looted from the sovereign wealth fund 1Malaysia Development Berhad in a fraud involving former Prime Minister Najib Razak and his cronies.
Cash looted from state coffers funded a wave of global spending and was used to buy everything from artwork to real estate to a superyacht.
Goldman’s role came under scrutiny for bond issues totaling $ 6.5 billion that helped organize the investment vehicle, and Malaysia claimed large amounts were misappropriated in the process.
The deal includes a $ 2.5 billion payment to Malaysia and a guarantee that at least $ 1.4 billion in assets acquired with embezzled funds will be recovered.
READ: Goldman Sachs, Malaysia Sign US $ 3.9 Billion 1MDB Deal
A spokesman for Malaysia’s Ministry of Finance confirmed that the cash portion of the deal “has been paid for by Goldman Sachs and received through an escrow account” on Thursday.
Bloomberg News reported that the funds will be used to pay off 1MDB’s outstanding debts, citing a person familiar with the matter.
Najib was ousted from office in 2018 in large part due to public anger over the scandal.
READ: Najib reiterates innocence after 1MDB verdict, says money was spent on orphans and ‘welfare programs’
The government that took office charged Goldman and a number of former and current employees with the fraud, as well as demanding substantial compensation.
Under the agreement, Malaysia will end all criminal proceedings against the bank.
Prime Minister Muhyiddin Yassin said last month that, combined with funds tied to 1MDB already returned to Malaysia by the United States, the country will receive a total of $ 4.5 billion.
Last month, Najib was sentenced to 12 years in prison after being convicted of all seven charges in the first of several 1MDB-related trials. He remains free on bail while he appeals.
