Goldman Sachs has finalised a $3.9bn agreement with the government of Malaysia to resolve allegations linked to the 1MDB state fund scandal.
The settlement includes a $2.5bn cash payment to Malaysia and a guarantee to return at least $1.4bn in proceeds from 1MDB-related assets.
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According to a report by Bloomberg, Goldman Sachs is required to pay the cash in 10 days.
The bank reached a settlement agreement in principle last month, after Malaysian officials reportedly refused to accept a $3bn settlement from the bank in the case.
Background
In 2019, the Malaysian government filed criminal charges against 17 bankers of three Goldman Sachs units over their involvement in the 1MDB scandal.
Under the settlement agreement, Malaysia agreed to drop all criminal proceedings against Goldman Sachs along with legal proceedings against some of the bank’s executives.
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By GlobalDataHowever, the settlement does not resolve charges on the bank’s former employees Tim Leissner and Roger Ng, against whom Malaysian authorities filed criminal charges in 2018.
The duo allegedly conspired with the scandal’s mastermind Low and 1MDB employee Jasmine Loo to bribe Malaysian government officials.
The 1MDB scandal involves misappropriation of billions of dollars which were said to be ultimately used to purchase art, a private jet and super-yacht, among others.
The scandal played an integral role in the election defeat of Malaysia’s former prime minister Najib Razak.
Goldman Sachs, which has denied misconducted in the case, allegedly helped 1MDB raise $6.5bn through bond sales. The bank is said to have earned $600m through the deal, said the US Justice Department.
Refuting its involvement in the matter, the bank said that 1MDB kept it in the dark about how the bond sales proceeds would be utilised.
In 2018, Abu Dhabi’s International Petroleum Investment Company sued the bank for playing a central role in the 1MDB scandal and bringing significant losses to the firm.
Goldman Sachs still faces charges in the US over 1MDB.
