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4 Sep, 2020 11:07

Malaysia drops criminal charges against Goldman Sachs over looting of state fund after Wall Street bank coughs up BILLIONS

Malaysia drops criminal charges against Goldman Sachs over looting of state fund after Wall Street bank coughs up BILLIONS

Goldman Sachs will not face criminal charges over its alleged role in the theft of billions of dollars from Malaysia’s government investment fund, 1MDB, after the Wall Street bank agreed to pay $4 billion in compensation.

The bank and its units were acquitted of all charges filed by Malaysia, High Court judge Mohamed Zaini Mazlan announced on Friday, as cited by state media.

Also on rt.com Superyacht linked to Malaysia’s state fund looting scandal sold for $126 million

The charges were dropped after the two sides reached a settlement deal following lengthy talks last month. Under the terms of the agreement, which allows the Wall Street bank to move on from one of the worst scandals in its history, Goldman Sachs agreed to a $2.5 billion cash payment to Malaysia and a guarantee to return at least $1.4 billion in assets acquired with misappropriated funds from sovereign wealth fund 1Malaysia Development Berhad (1MDB). Last week, the bank made the promised $2.5 billion payment.

The fund was set up in 2009 by Najib Razak, the then-prime minister, who was sentenced to 12 years in jail after being convicted on all charges related to 1MDB. Goldman Sachs was the main banker for the fund and helped it to raise $6.5 billion through bond sales. However, much of the funds were misappropriated during the process by government officials and two Goldman bankers, while the bank was accused of covering up the looting of the nation’s state fund. 

The money siphoned off from state coffers was used to buy everything from artwork and jewelry to real estate and a superyacht.

The latest development in the 1MDB case in Malaysia does not free Goldman Sachs from prosecution linked to the 1MDB saga in other countries. It is currently in talks to secure a deal with the US Department of Justice. It was earlier reported that the bank is going to pay a multibillion-dollar fine and plead guilty to violating US bribery laws under the possible settlement.

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