Goldman Sachs to Settle 1MDB Scandal with Malaysia for $3.9 Billion
Posted on 07/24/2020
Under Lloyd Blankfein’s reign, Goldman Sachs has been publicly mired in two sovereign wealth fund scandals, one with the Libyan Investment Authority (LIA) and the other with 1Malaysia Development Berhad (1MDB).
Goldman Sachs Group agreed to settle a key part of an international scandal by agreeing to a US$ 3.9 billion deal with Malaysia. Goldman Sachs will cough up US$ 2.5 billion in cash to Malaysia and guarantee the Malaysian government will receive at least $1.4 billion in proceeds from assets seized around the world. In return, the Malaysian government is withdrawing pending criminal charges and regulatory proceedings and said it won’t seek charges against Goldman Sachs and its employees – with the exception for Tim Leissner and Roger Ng, the former Goldman bankers accused of assisting Malaysian financier Low Taek Jho.
“This settlement by Goldman Sachs represents its acknowledgment of the misconduct of two of its former employees in the broader 1MDB fraudulent and corruption scheme,” Malaysia’s Finance Minister Tengku Dato’ Sri Zafrul Aziz said in a statement.
This settlement with Malaysia enables Goldman Sachs to make a deal with the U.S. Department of Justice (DOJ) for its role in the scheme. Goldman seeks to avoid a guilty plea in the case.
Low is a fugitive sought by U.S. and Malaysian authorities and is said to be hiding in Wuhan, China.