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Malaysia open to talks if Goldman pays $7.5 billion, minister says
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The wrongdoings at state fund 1MDB is bigger than what the public have known, according to Malaysian Prime Minister Mahathir Mohamad. (The Star/File photo)
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alaysia’s finance minister said on Friday the government would be ready to discuss dropping criminal charges against Goldman Sachs linked to the 1MDB scandal if the bank pays $7.5 billion in reparations.
Goldman Sachs is being investigated by Malaysian authorities and the U.S. Department of Justice for its role as underwriter and arranger of three bond sales that raised $6.5 billion for 1Malaysia Development Berhad. The bank has denied wrongdoing.
U.S prosecutors last year charged two former Goldman bankers with the theft of billions of dollars from 1MDB.
Finance Minister Lim Guan Eng said Malaysia was seeking $7.5 billion in reparations from Goldman Sachs over its 1MDB deals, which included fees paid to the bank and bond coupons that were “higher than the market rate”.
Asked by a reporter on Friday if Malaysia would drop the charges against the bank if it paid the reparations, Lim said: “Pay the $7.5 billion, then we can discuss.”
Malaysia reopened domestic investigations into 1MDB last year, after a historic election that saw the country’s first change of government in more than 60 years.
The government of former Malaysian Prime Minister Najib Razak set up the 1MDB fund in 2009, and the U.S. Justice Department estimated $4.5 billion was misappropriated by high-level fund officials and their associates between 2009 and 2014.
Najib has denied wrongdoing.
On Wednesday, Goldman Sachs chief executive David Solomon apologized to the Malaysian people for the role played by Tim Leissner in the 1MDB scandal, but said the bank had conducted due diligence before every transaction.
Leissner, a former partner for Goldman Sachs in Asia, pleaded guilty in the United States to conspiring to launder money and violate the Foreign Corrupt Practices Act.
Lim said the apology was “necessary but not sufficient” and that the whole scandal had caused “agony and trauma suffered by the Malaysian people”.
“If not for the change of government, do you think Goldman Sachs would have apologized? We are talking about the largest investment bank in the world... it’s not easy to get an apology from them,” Lim said.
“An apology is not enough. An apology with $7.5 billion, that is what matters.”
