Sunday, January 17, 2021

Goldman agrees $3.9 billion settlement with Malaysia over 1MDB scandal

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Goldman Sachs Group Inc. and Malaysia have signed an agreement to finalize the $3.9 billion settlement over the 1MDB scandal, according to people familiar with the matter.

The U.S. bank formalized the deal on Tuesday and must make a $2.5 billion cash payment to Malaysia within 10 days, said the people, who asked not to be identified as the information is private.

The pact reached in July was a major step toward resolving the scandal surrounding 1MDB, a Malaysian state fund that’s at the center of global investigations into corruption and money-laundering. It involved Goldman Sachs agreeing to pay $2.5 billion in cash and guaranteeing the return of $1.4 billion of 1MDB assets seized by authorities around the world, in exchange for Malaysia dropping charges against the bank.

A representative for Goldman Sachs declined to comment. A representative for Malaysia’s finance ministry couldn’t immediately comment.

The deal allowed the bank to move on from its worst scandal since the financial crisis, while the country gets to recoup much of the $4.5 billion that prosecutors said were lost from 1MDB at a time when it’s seeking funds for its massive stimulus package.

Goldman Sachs is set to face a case management hearing over its criminal charges at a Malaysian court on Sept. 4, a date that was set before the deal was struck.

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