Malaysia reached a US$3.9 billion settlement with Goldman Sachs over the Wall Street titan’s role in the 1MDB scandal in exchange for the country ending all criminal proceedings against the monster bank.
Billions of dollars were looted from sovereign wealth fund 1Malaysia Development Berhad in a fraud that allegedly involved former leader Najib Razak and his cronies.
Goldman’s role came under scrutiny over bond issues totaling $6.5 billion it helped arranged for the fund. Malaysia and the bank had been locked in long-running talks and the country’s finance ministry announced a breakthrough had finally been achieved.
The settlement comprises a cash payment of $2.5 billion and a guarantee that at least $1.4 billion in assets acquired with misappropriated funds would be recovered.
This settlement represents assets that rightfully belong to the Malaysian people.
A former Jewish Goldman partner, Tim Leissner, has previously pleaded guilty in the USA over his part in the controversy.
A Malaysian former managing director at the bank, Ng Chong Hwa, has also been charged in the USA and Malaysia over the scandal.
The US Department of Justice, which is investigating the fraud as huge sums were allegedly laundered through the US financial system, says that about $4.5 billion was looted from 1MDB.
The money was used to fund a global spending spree, with cash spent on everything from a super-yacht to high-end real estate.
Anger at the scandal played a large part in Najib’s long-ruling coalition losing power at elections in 2018, after which he was arrested and hit with dozens of charges.
Najib is now facing three 1MDB-linked trials and the verdict in the first is due to be handed down next week.
Bribery & Extortion / ABC Flash Point News 2020.