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Malaysia Asks Goldman Sachs To Pay $7.5 Billion In Reparations For 1MDB: FT


12/21/2018


Malaysia Asks Goldman Sachs To Pay $7.5 Billion In Reparations For 1MDB: FT
According to a report published in the Financial Times on Friday, $7.5 billion is being sought by the Malaysian government form Goldman Sachs Group Inc in relation to repatriation of the money that had been siphoned off from the country via the scandal-linked state fund 1MDB. The report quoted a information from Malaysia’s finance minister.
 
Another report published by Bloomberg claimed that the criminal investigation of 1MDB have been extended to include examination of the role of Goldman Sachs by authorities in Singapore. This is a clear indication that the US banker and wealth management firm is being put under increased scrutiny with respect to its role in the multi-billion-dollar money laundering incident of 1MDB.
 
For its alleged role as the underwriter and arranger of three bond sales that raised $6.5 billion for 1Malaysia Development Berhad (1MDB), criminal charges have been filed by Malaysian prosecutors Goldman Sachs this week. this is the first such criminal charge filed against teh U bank on the 1 MDB scandal.
 
All charges of wrongdoing have been repeatedly denied by Goldman Sachs and has said that the bank was given false information about the proceeds of the bond sales by certain members of the former Malaysian government and 1MDB.
 
The FT quoted Malaysian Finance Minister Lim Guan Eng as saying that Malaysia should be given $1 billion by Goldman Sachs to cover $600 million that were paid in fees paid to the bank and bond coupons that were “higher than the market rate”, in addition to the bonds’ total value.
 
At least more than $1.8 billion should be the amount that Goldman Sachs should repatriate to Malaysia which is the money that the US bank has told its investors that it had apportioned separately as a cover for any potential losses related to the legal proceedings over the 1MDB scandal, Lim has also told the FT.
 
“Their figure is $1.8 billion. Ours is $7.5 billion,” Lim said.
 
Lim said that while the Malaysian government is not currently holding any negotiations with Goldman Sachs, the bank could be brought to the negotiation table following the filing of the charges on Monday.
 
The bank intended to “vigorously contest these charges”, a Goldman Sachs spokesman told the media in response of the FT report.
 
“The 1MDB bond offerings were meant to raise money to benefit Malaysia; instead, a huge portion of those funds were stolen for the benefit of members of the Malaysian government and their associates. Certain members of that government and 1MDB lied to Goldman about the use of proceeds from these transactions,” the spokesman said.
 
There has been criticism of the amount of fees that were paid to Goldman Sachs for its services linked to the 1MDB fund and that the fees earned by the bank were more than the usual 1-2 per cent that is paid generally in such cases.
 
(Source:www.thedailybeast.com)


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