Goldman Sachs $3.9B settlement with Malaysia over 1MDB
Published 10:59 am Friday, July 24, 2020
KUALA LUMPUR, Malaysia (AP) — Goldman Sachs has reached a $3.9 billion settlement with Malaysia over the 1MDB sovereign wealth fund that was used to launder money.
Malaysian and U.S. prosecutors had alleged that bond sales organized by Goldman Sachs for 1MDB provided one of the means for associates of former Malaysian leader Najib Razak to steal billions over several years from a fund that was ostensibly set up to accelerate Malaysia’s economic development.
Najib was arrested as part of the scandal. Two former Goldman Sachs bankers have been charged for their role in helping 1MDB launder money.
Goldman on Friday said it had agreed to pay the government of Malaysia $2.5 billion and to guarantee that it gets at least $1.4 billion in proceeds from assets that have since been seized around the globe.
Investigations into the 1MDB scandal had been quashed by Najib’s government. Its ousting in the 2018 elections ushered in Malaysia’s first change of power since independence from Britain in 1957.
The new government soon reopened investigations that led to charges being filed against Najib, his wife Rosmah Mansor and several former senior government officials. Malaysia also charged U.S. bank Goldman Sachs with allegedly misleading investors over bond sales it organized for 1MDB.
Najib has called the prosecution a political attack. The ruling alliance that ousted him collapsed in March with two-time Prime Minister Mahathir Mohamad resigning in protest over his party forming a Malay-centric government with Najib’s party and several others.
The king subsequently appointed fellow party leader Muhyiddin Yassin as the new prime minister despite Mahathir’s insistence that he has the support of a majority of lawmakers. Mahathir, 94, has called for a no-confidence vote against Muhyiddin that has been delayed by the coronavirus, and could be held at the next sitting of Parliament in July.