Offered ‘less than US$2b’ to settle 1MDB suit, Dr M suggests Goldman Sachs do better

Tun Dr Mahathir Mohamad says the government has rejected Goldman Sachs’ offer of ‘less than US$2 billion’ as reparations for its role in the 1MDB financial fraud. — Picture by Hari Anggara
Tun Dr Mahathir Mohamad says the government has rejected Goldman Sachs’ offer of ‘less than US$2 billion’ as reparations for its role in the 1MDB financial fraud. — Picture by Hari Anggara

KUALA LUMPUR, Nov 2 — The Malaysian government rejected Goldman Sachs’ offer of “less than US$2 billion (RM8.3 billion)” as reparations for its role in the 1MDB financial fraud, Prime Minister Tun Dr Mahathir Mohamad said.

Dr Mahathir suggested to the Financial Times (FT) in an interview yesterday that Malaysia considered the offer unreasonable as it demanded US$7.5 billion, the estimated financial damage incurred by the country as a result of bonds issues the US investment bank handled for 1MDB.

“Goldman Sachs has offered something like less than US$2 billion... if they respond reasonably we might not insist on ­getting that US$7.5 billion,” he was quoted as saying.

The prime minister said Putrajaya has also contacted Deutsche Bank and UBS to inquire about their roles in the financial fraud perpetrated in the name of the state investment firm.

The federal government is reportedly in negotiations with Goldman for the compensation sum, in a departure from its previous insistence that the US firm pay the full US$7.5 billion demanded.

The Bloomberg news service reported that a Malaysian team including Tun Daim Zainuddin were in talks for a settlement of between US$2 billion and US$3 billion.

A source told Bloomberg that Dr Mahathir was keen on a swift settlement in order to demonstrate the government’s progress in recovering funds allegedly misappropriated from 1MDB.

In 2012 and 2013, the bank raised US$6.5 billion for 1MDB, much of which the US has alleged was ultimately stolen in a scheme masterminded by Malaysian fugitive Low Taek Jho or Jho Low, a central figure in the scandal who has denied wrongdoing.

Malaysia charged Goldman Sachs under the Capital Markets and Services Act 2007 over its role in the bonds issues.

Goldman declined to comment on the FT’s report.

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