Malaysian Prime Minister Anwar tells Goldman to pay for 1MDB settlement

(Bloomberg) – Malaysian Prime Minister Anwar Ibrahim demanded that Goldman Sachs Group Inc. honors its settlement with the government over its role in the 1MDB scandal, saying the Wall Street firm should not use its financial strength to dictate terms.

Most read from Bloomberg

The misuse of the sovereign state fund was made possible by the “complicity” of institutions such as Goldman Sachs, Anwar told Bloomberg Television’s Haslinda Amin in his first interview with international media since he became prime minister.

“My only appeal is that they do this deal with Malaysia because 1MDB is known all over the world,” Anwar said in Singapore on Monday. “It’s in the books and I think Goldman Sachs needs to come out clean and deal with Malaysia.”

State Development Fund 1MDB became the center of a billion-dollar scandal that sparked investigations in Asia, the US and Europe. Goldman Sachs admitted its role in 2020 in the largest foreign bribery case in U.S. enforcement history, reaching multiple multibillion-dollar international settlements to end investigations into fundraising for 1MDB.

The Malaysian government turned its attention to Goldman Sachs in 2018 for its work to raise $6.5 billion in 2012 and 2013 for 1MDB, formally known as 1Malaysia Development Bhd. The bonds were earmarked for redevelopment, but all but $2 billion of the money was diverted to pay bribes to government officials, US federal prosecutors said.

For years, authorities have tracked down funds that allegedly flowed from 1MDB into high-end art and real estate, a superyacht and, ironically, the popular Hollywood movie “The Wolf of Wall Street,” which chronicles an earlier era of financial crimes.

The settlement announced in July 2020 required Goldman Sachs to pay $2.5 billion while guaranteeing the return of $1.4 billion in 1MDB assets seized by authorities around the world, in exchange for dropping of charges against the bank by Malaysia.

Goldman will also be required to make a one-time interim payment of $250 million if Malaysia does not receive at least $500 million in assets and proceeds by August 2022, according to the bank. However, the two disagree over whether the government received the $500 million proceeds before the August deadline, Goldman Sachs said in a filing last year.

The bank in the filing had also accused Malaysia of “unilaterally lowering the value of one asset by $80 million” while refusing to include substantial additional assets in its asset and recoveries accounts.

“If we get a fair deal, we should get a lot more than that, which I intend to deal with them if these things aren’t settled amicably,” Anwar said in response to Goldman’s claims. “It’s not my intention – I’m just new to the game. I just want to settle old scores, in the sense of old commitments we’ve made. We need to move on.”

A Goldman Sachs spokesperson referred Bloomberg to the company’s 10Q filing when reached for comment.

At the time of the filing, Goldman Sachs had said the parties had three months to try to resolve the dispute. The matter would be settled by arbitration if resolution is not reached.

“But if they come and pressure us with this, I have no choice because I have a mandate from my people, and people are struggling to live and you with your hundreds of billions in profit and waste, you can’t just get away.” by ignoring your moral responsibility and financial responsibility,” Anwar said.

–With help from Kok Leong Chan and Chanyaporn Chanjaroen.

Most read from Bloomberg Businessweek

©2023 Bloomberg LP

Leave a Reply

Your email address will not be published. Required fields are marked *