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INVESTMENT bank, Goldman Sachs, has reached a $3.9 billion settlement with Malaysia over the multibillion-dollar 1MDB scandal that will see all criminal charges against the bank dropped, Reuters reports.
The deal includes a $2.5 billion cash payout by Goldman and a guarantee by the bank to return at least $1.4 billion in proceeds from assets linked to sovereign wealth fund 1Malaysia Development Bhd (1MDB), the two sides said.
The settlement is the biggest Malaysia has reached so far in its efforts to recover funds allegedly stolen from 1MDB, and is a big victory for the four-month old administration of Malaysian Prime Minister Muhyiddin Yassin.
“We are confident that we are securing more money from Goldman Sachs, compared to previous attempts, which were far below expectations,” Finance Minister, Tengku Zafrul Aziz, said in a statement.
“We are also glad to be able to resolve this outside the court system, which would have cost a lot of time, money and resources,” he said, adding that the deal would resolve all outstanding charges and claims against Goldman.
Malaysian and US authorities estimate $4.5 billion was stolen from 1MDB in an elaborate scheme that spanned the globe and implicated high-level officials in the fund, former Malaysian Prime Minister Najib Razak, Goldman staff and others.
US prosecutors said the money was used to buy artwork, including paintings by Vincent Van Gogh and Claude Monet, luxury properties in New York and London and to fund the “Wolf of Wall Street” movie.
Goldman helped the fund raise $6.5 billion in two bond offerings the bank underwrote, earning itself $600 million in fees, according to the US Justice Department.
