Goldman Sachs and Malaysia have reached an agreement to settle the longstanding probe over the American investment bank’s role in the multi-billion dollar 1MDB scandal.
Goldman Sachs has agreed to pay $3.9 billion – a $2.5 billion cash payout and $1.4 billion in proceeds from assets linked to 1MDB – according to a media release and a «Reuters» report citing the bank and Malaysian authorities. On Malaysia’s side, criminal charges against Goldman, which has denied wrongdoing, will be dropped.
«We are pleased to have reached an agreement in principle with the government of Malaysia to resolve outstanding charges and claims against Goldman Sachs,» the bank said in a statement. «Today’s settlement is an important step towards putting the 1MDB matter behind us.»
Better Than Last Time
A six-strong team from Goldman Sachs arrived in Malaysia earlier this month in an effort to further negotiations after the two parties failed to reach an agreement in the last attempt. Last month, Goldman Sachs agreed to a deal totaling $3 billion – $900 million less than the current deal – which Malaysia’s finance minister, Tengku Zafrul Aziz then called unacceptable.
«We are confident that we are securing more money from Goldman Sachs compared to previous attempts, which were far below expectations,» the finance minister said in a statement about the latest attempt.
U.S. Deal
Observers expect a deal to be reached soon with the U.S. Department of Justice which is reportedly investigating if Goldman Sachs violated foreign corruption laws. The bank has stored away $3 billion in reserves for 1MDB-related legal matters, including the Malaysian settlement.
In December, another «Reuters» report, citing unidentified sources, claimed that the bank could pay as much as $2 billion to the U.S. government and regulator to resolve the case. If this were to become the case, Goldman would be on the hook for a total of $5.9 billion compared to the estimated $4.5 billion stolen from 1MDB.
