Malaysia to continue legal action against Goldman Sachs over 1MDB funds

Reports say the US Department of Justice will close its probe into the bank with a US$2 billion (RM8.32 billion) fine. (Reuters pic)

PETALING JAYA: Malaysia will continue to pursue legal action against Goldman Sachs for its role in the 1MDB scandal despite reports that the US Department of Justice will close its probe into the bank with a US$2 billion (RM8.32 billion) fine.

At a press conference today, Finance Minister Lim Guan Eng said Malaysia had not received any information about the DoJ’s negotiations with US federal agencies to impose a penalty which would resolve the criminal and regulatory probes against Goldman Sachs over 1MDB transactions.

Malaysia filed criminal charges against 17 current and former Goldman Sachs directors in August for their role in raising US$6.5 billion (RM27 billion) in bond sales for 1MDB, the Malaysian sovereign wealth fund mired in allegations of corruption and embezzlement.

Malaysia has demanded US$7.5 billion (RM31.15 billion) from the bank.

However, Prime Minister Dr Mahathir Mohamad had previously said he was hopeful of reaching an out-of-court settlement.

Lim said: “I want to stress once again that the Malaysian government does not know anything about Goldman Sachs’ plans to reach a settlement with the DoJ.

“We will continue our criminal action against Goldman Sachs. I have contacted the attorney-general and he said the case would be taken to court in the middle of next year,” he added.

According to a Bloomberg report, the DoJ and other American federal agencies have discussed plans to seek penalties of between US$1.5 billion (RM6.23 billion) and US$2 billion from Goldman Sachs — which is less than what some analysts have said the bank might have to pay.

In an interview with the Financial Times last month, Mahathir said Malaysia had rejected an offer of less than US$2 billion in compensation from Goldman Sachs for the scandal which rocked the country.

Lim added today that Malaysia’s US$7.5 billion claim was only against Goldman Sachs and did not include its claims made against fugitive financier Low Taek Jho, or Jho Low, the alleged mastermind of the scheme to steal billions of dollars from the state investment firm.