MoF says Goldman Sachs pays record US$3.9b settlement in relation to 1MDB, confirms The Edge report

Thursday 18 Apr 2024

KUALA LUMPUR (July 24): The Ministry of Finance has announced that Goldman Sachs has agreed to pay a record US$3.9 billion(RM16.6 billion) settlement to Malaysia in relation to the 1Malaysia Development Bhd debacle, confirming a report by theedgemarkets.com.

It is understood to be the biggest settlement for Malaysia, and possibly also the largest payout by the international investment bank.

In a statement, the ministry said the settlement will be split into a cash payment of US$2.5 billion (RM10.65 billion) and a guarantee of a full recovery value of at least US$1.4 billion in assets that are traceable to the diverted proceeds from three bond issuances by the investment bank worth US$6.5 billion.

In addition, Goldman Sachs will also assist Malaysia in the recovery of other related assets abroad at its own cost, as acknowledgement of the misconduct of its two former executives in the 1MDB scandal.

"This settlement represents a significant increase compared to the previous offer of US$1.75 billion made by Goldman Sachs to the previous administration in 2019.

"With today's settlement amount and the monies that Malaysia has already received from the US Department of Justice, more than US$4.5 billion will be returned to the people of Malaysia. The Government remains committed to recover other outstanding assets," said the ministry, which added that this payment will, however, not affect Malaysia's claim against Jho Low and other parties related to the now-defunct sovereign wealth fund.

Finance Minister Tengku Datuk Seri Zafrul Aziz said: “This settlement represents assets that rightfully belong to the Malaysian people. We are confident that we are securing more money from Goldman Sachs compared to previous attempts, which were far below expectations.”

“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. With this settlement, we will have the return of the monies expedited, and not held up by lengthy and costly court battles and legal process,” he added.

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