Malaysia rejects Goldman Sachs offer of $2bn damages over 1MDB scandal

Malaysia rejects Goldman Sachs offer of $2bn damages over 1MDB scandal

Mahathir Mohamad says amount is insufficient but a better offer might lead Malaysia to drop its demand for US$7.5bn

Malaysia has rejected an offer from Goldman Sachs of less than US$2bn in compensation over the 1MDB scandal, in contrast to the country’s publicly stated demand of US$7.5bn. 

Malaysia has charged Goldman and 17 current and former directors of its units for allegedly misleading investors over bond sales totalling US$6.5bn that the US bank helped raise for the sovereign wealth fund 1Malaysia Development Bhd (1MDB). 

“Goldman Sachs has offered something like less than $2bn,” the Malaysian prime minister, Mahathir Mohamad, told the Financial Times on Friday. “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 $7.5bn.”

Goldman declined to comment to the newspaper. The bank did not immediately respond to a Reuters request for comment. Goldman said last month it was in discussions with authorities on the possibility of a resolution of investigations relating to 1MDB. 

A spokesman for Mahathir travelling with the leader could not immediately be reached. 

US authorities say about US$4.5bn was siphoned from 1MDB, founded in 2009 by the then Malaysian prime minister, Najib Razak. The scandal helped Mahathir hand a surprise defeat to Najib in a general election last year.

Mahathir told the Financial Times the south-east Asian country was not negotiating or in contact with the fugitive financier Jho Low, accused of playing a central role in the scam. 

Low has consistently denied wrongdoing and says he does not expect a fair trial in Malaysia as long as Mahathir is in power. 

The US Justice Department said this week it had struck a deal to recover US$1bn in funds allegedly looted from 1MDB from Low, in a record haul for an US anti-corruption probe. 

The deal does not include an admission of guilt or wrongdoing and is not tied to criminal action against Low. 

Mahathir said on Thursday that Malaysia would file a claim on Low’s forfeited assets. 
“The DoJ has indicated that if we can prove claim of ownership, then we will be able to get the money for ourselves,” he said. 

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