Malaysia reconsiders its 1MDB corruption deal with Goldman Sachs

Kuala Lumpur — Malaysia may pursue lawsuits against Goldman Sachs over the US investment bank’s role in the multibillion-dollar corruption scandal at state fund 1MDB, Prime Minister Anwar Ibrahim said in an interview with CNBC.

Goldman settled with Malaysia in 2020 by agreeing to pay $2.5bn in cash and guaranteeing the return of $1.4bn in assets to the country in exchange for dropping all criminal charges against the bank.

But Anwar, who came to power in late 2022, said earlier in 2023 that Malaysia was re-evaluating the deal as the settlement sum was small.

“I am not discounting the possibility of proceeding again with the lawsuits,” Anwar told CNBC in an interview aired on Monday. Malaysia is also considering other options, including negotiations, Anwar said.

Goldman did not immediately respond to a request for comment.

The US bank has always denied wrongdoing in the 1MDB case.

Malaysian and US authorities estimate $4.5bn was stolen from 1MDB between 2009 and 2014 in a globe-spanning scheme that implicated high-level government and banking officials in Malaysia and elsewhere. Goldman had helped 1MDB raise $6.5bn in two bond offerings, earning itself $600m in fees, according to the US justice department.

As part of the 2020 settlement, Goldman is also required to make a one-time interim payment of $250m if the Malaysian government had not received at least $500m in assets and proceeds by August 2022, the bank said in a regulatory filing in 2023. The two parties disagreed over whether Malaysia had recovered at least $500m since August 2022 and whether any interim payment is due, Goldman said.

The dispute would be settled by arbitration if the two are unable to resolve the matter, the bank said.

Reuters