This article first appeared in The Edge Financial Daily on November 5, 2019

KUALA LUMPUR: Malaysia is still engaging with Goldman Sachs on the amount of compensation over the 1Malaysia Development Bhd (1MDB) scandal it expects to get from the US investment bank, Tun Dr Mahathir Mohamad said yesterday.

The prime minister pointed out that Malaysia had rejected an offer from Goldman that was deemed too low, compared with its publicly stated demand of US$7.5 billion.

He did not disclose the actual sum offered by Goldman but had told the Financial Times last Friday that the US bank had proposed “something like less than US$2 billion”.

“They’ve caused us to lose about US$7 billion. They may not want to pay us that amount. Their [compensation] offer is too low, because of that we have not accepted their offer,” Bernama quoted Dr Mahathir as telling the Malaysian media yesterday in Bangkok, where he is attending the Asean Summit.

Noting that the matter is of “great public interest”, he said Malaysia will go to court if it fails to obtain a higher amount.

“How much we’re willing to accept, of course, it’s based on the negotiation, out of court negotiation. But if we cannot reach an agreement, we’ve to go to court,” he said.

In the interview with the Financial Times, Dr Mahathir said: “We are not satisfied with that amount so we are still talking to [Goldman] … If they respond reasonably we might not insist on getting that US$7.5 billion.”

Goldman raised US$6.5 billion in bonds for 1MDB in 2012 and 2013. The US bank allegedly earned RM600 million in fees from the bond issues.

Malaysia has charged Goldman and 17 current and former directors of its units under the Capital Markets and Services Act 2007 for allegedly misleading investors over the bond sales.

US authorities have said that about US$4.5 billion was siphoned from 1MDB.