The deal will see Malaysia drop all criminal charges against Goldman in exchange for $3.9bn of reparations for its role in raising money for 1MDB.
Goldman Sachs has reached a USD 3.9 billion settlement agreement with the Malaysian government over the investment bank’s role in the 1MDB scandal.
A six-member team of top executives and legal advisors from Goldman entered Malaysia on Saturday (18 July) to resume negotiations, having been granted a special permit from the government to enter the country.
Malaysia had charged Goldman and 17 of this current and former directors for allegedly misleading investors over bond sales totalling USD 6.5 billion that it helped raise for sovereign wealth fund 1MDB.
The “agreement in principle” see Goldman pay USD 2.5 billion to the Malaysia government and guarantee it receives an additional USD 1.4 billion in proceeds from assets related to 1MDB seized by governmental authorities around the world.
“In connection with the guarantee, Goldman Sachs performed valuation analysis on the relevant assets and believes based on that analysis that the guarantee does not present a significant risk exposure to the firm,” the investment bank said in a statement, while warning of materially higher provisions to be reflected in its financial statements.
The agreement will resolve all criminal and regulatory proceedings against Goldman in Malaysia relating to 1MDB, including those against its subsidiaries and certain current and former directors. It does not resolve pending investigations outside of Malaysia, including negotiations with the US Department of Justice.