'Unsatisfied' Malaysia rejects $2 billion compensation from Goldman Sachs for 1MDB scandal
'Unsatisfied' Malaysia rejects $2 billion compensation from Goldman Sachs for 1MDB scandal
Former Malaysian Prime Minister Najib Razak is accused of channelling around $700 million from 1Malaysia Development Berhad (1MDB) in 2015.
2 min read
Former PM Razak is accused of transferring $700 million to his own accounts. [Getty]
Malaysia has rejected a compensation of “less than $2 billion” from American investment bank Goldman Sachs for its role in the multi-billion dollar 1MDB scandal, an aide to the Prime Minister said.
Former Malaysian Prime Minister Najib Razak is accused of channelling around $700 million from 1Malaysia Development Berhad (1MDB) - a government-run development company- to his own accounts in 2015. The money was spent on luxuries ranging from high-end real estate to a super-yacht.
Prime Minister Mahathir Mohamed reopened an investigation into the scandal after coming to power last year.
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Malaysia filed criminal charges against Goldman Sachs in December 2018 for its role in the scandal, as it helped arrange bond issues worth billions for 1MDB. Kuala Lumpur claims that huge amounts were misappropriated, and is seeking $7.5 billion from the company – a much larger amount than the figure offered.
"Having held themselves out as the pre-eminent global adviser/arranger for bonds, the highest standards are expected of Goldman Sachs," Malaysia’s attorney-general Tommy Thomas said at the time.
"They have fallen far short of any standard."
"We are not satisfied with that amount so we are still talking to them... If they respond reasonably we might not insist on getting that $7.5 billion," Mahathir said.
Last year, Malaysia filed charges against three units of the bank and two ex-employees over the scandal. Additional charges were filed in August against 17 present and former executives of three of the bank’s subsidiaries, which the Wall Street giant has said were “misdirected”.
This news comes just days after Low Take Jho, a central figure in the scandal, agreed to surrender $700 million in assets as part of an effort to recover the stolen money, US official said.
Malaysia’s Prime Minister has said his country would ask the US to hand over what it has recovered from Low, which would be the largest ever US civil forfeiture in history.
The 1MDB scandal has rocked Malaysia where corruption was a key issue in the country's last election, °®Âþµº's Malaysia expert, Taufiq Wan said.
"It rocked Malaysia's political landscape and brought Umno - a party that had been in power since independence - crashing down. Months after the election, Umno is in crisis and people are questioning whether it will survive."
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