Goldman Sachs in talks with Malaysia to resolve latest 1MDB clash
Sign up now: Get ST's newsletters delivered to your inbox
Malaysian Prime Minister Anwar Ibrahim was interviewed by Bloomberg News during his visit to New York for the United Nations General Assembly.
PHOTO: BLOOMBERG
Follow topic:
NEW YORK – Three years after the Goldman Sachs Group agreed to fork out more than US$5 billion (S$6.8 billion) for its role in the plundering of Malaysia’s 1Malaysia Development Berhad (1MDB) investment fund, the Wall Street giant has struggled to put the scandal to bed.
Now, the New York-based bank and the South-east Asian nation are taking a fresh stab at resolving one of the most embarrassing episodes in the bank’s history.
Behind the scenes, Goldman Sachs executives have made fresh overtures, Malaysian Prime Minister Anwar Ibrahim told Bloomberg News, during his visit to New York for the United Nations General Assembly.
He struck a more conciliatory tone after recently saying he may consider taking Goldman to court
A settlement is “possible because we are not unreasonable, we ask what is reasonable, and I even refused to state the quantum because... we should allow for some flexibility to discuss”, Datuk Seri Anwar said.
“I don’t think it is fair to suggest that the entire deal has got to be relooked into, but there are specific areas where there is a flaw. Maybe we just focus on that.”
The investment fund 1MDB became the centre of a multi-billion-dollar scandal
Months after striking the initial agreement in 2020 – and staging an unusual and amusing photo op with Malaysian government officials to celebrate it – Goldman admitted to its role in the biggest foreign bribery case in US enforcement history.
The bank reached multiple international settlements exceeding US$5 billion for its part in raising funds for 1MDB.
Malaysia is also pursuing efforts to bring back former Goldman banker Roger Ng,
“He was quite instrumental, he would know a lot and would be of immense assistance in our investigations,” Mr Anwar said.
As part of the 2020 settlement, Goldman made an initial US$2.5 billion payment while guaranteeing the return of US$1.4 billion of 1MDB assets seized by the authorities around the world, in exchange for Malaysia dropping charges against the bank.
Goldman was also required to make an interim payment of US$250 million if Malaysia did not receive at least US$500 million in assets and proceeds by August 2022, according to the bank. The two sides have been locked in a disagreement over that, the bank has spelled out in public filings.
The latest talks concern only the asset valuation dispute, a Goldman spokesman said.
Lawsuit and cheesecake
While the two sides will try for an amicable resolution, Mr Anwar cautioned Goldman against assuming the lawsuit threat is a bluff.
“They are taking us for granted, they think that we’ll not proceed” with a lawsuit, he said.
“There is nothing for us to lose except for the legal fees, which a government can manage. But it is also the integrity of Goldman Sachs that is in question.”
The Malaysian government is unhappy on two key counts with the existing deal and how Goldman is approaching it.
“The flaw is firstly the quantum and the interpretation of some of the clauses,” he said.
Mr Anwar said he could get personally involved, but he does not see the need for it. He added that Malaysia has a competent team to handle the matter, but if needed, he can “meet them for just casual tea or cheesecake”. BLOOMBERG
