Monday, October 26, 2020

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.

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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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