Goldman Sachs agrees deal with Malaysia over 1MDB
July 24, 2020
Malaysia and US investment titan Goldman Sachs reached a deal on Friday that will see the bank pay $3.9 billion (€3.36 billion) in return for having the country end criminal proceedings against it over a multibillion-dollar fraud scandal.
Goldman will pay out $2.5 billion in cash, while guaranteeing to return at least $1.4 billion in proceeds from assets acquired with misappropriated funds from the sovereign wealth fund 1Malaysia Development Berhad (1MDB), the two sides announced.
Prime Minister Muhyiddin Yassin hailed the settlement as a "victory," saying that Malaysia would receive a total of $4.5 billion from the settlement combined with 1MDB-linked funds already returned by the US.
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Global-based fraud
The deal, the biggest reached so far as Malaysia tries to recover funds allegedly stolen from 1MDB, is being seen a boost for Yassin's four-month-old administration.
Three Goldman units had been facing charges from Malaysian prosecutors over bond sales totaling $6.5 billion that the bank helped raise for 1MDB. Malaysia claims that large amounts of money were misappropriated during the process.
Both Malaysian and US authorities say the 1MDB fund was defrauded of some $4.5 billion, with former Malaysian Prime Minister Najib Razak and Goldman among those implicated. US prosecutors say the money was used to buy artwork and real estate around the world and even used to fund the movie "Wolf of Wall Street" — a film about a young Wall Street broker who makes a fortune by defrauding wealthy investors.
Najib lost power in 2018 amid public outrage at the scandal. He is facing dozens of charges and will face his first verdict on Tuesday. He has denied any wrongdoing.
tj/msh (Reuters, AFP)