By Elizabeth Hearst
Goldman Sachs, the leading investment bank, has finalised a deal with the Malaysian government to settle the bank’s $3.9 Billion payout over the 1MDB scandal.
The agreement announced in principle in July, was confirmed in a regulatory filing in New York Tuesday. The firm must now make a $2.5 Billion cash payment to Malaysia within 10 days,according to an anonymous source.
The deal will see Goldman Sachs pay $2.5 Billion while also guaranteeing the return of $1.4 Billion in assets from 1MDB seized by authorities worldwide, in exchange for the dropping of charges against the bank by Malaysia.
The deal brokered will see Malaysia recoup much of the $4.5 Billions that prosecutors estimate was lost from the 1MDB scandal. The controversy has spanned Asia, Europe and the US, with funds suspected to have been funnelled into financing real estate, luxury yachts and even the Wolf of Wall Street.
The former Prime Minister of Malaysia, Najib Razak was found guilty in a groundbreaking trial on charges of abuse of power, breach of trust and money laundering. He was sentenced to twelve years in prison but maintains his innocence.
He is accused of siphoning $4.5 Billion from the country’s investment fund (1MDB). The current settlement by Goldman Sachs comes as a result of an investigation into bond sales arranged by the firm in 2012 and 2013 which raised capital for this fund.
In a statement in July, the investment firm described the settlement as an “important step towards putting the 1MDB matter behind us”, and added that the recovered assets will “help enable the Malaysian government to move forward with additional recovery efforts and to execute on its economic priorities”.
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