Goldman, Malaysia reach US$3.9b settlement over 1MDB

New York

GOLDMAN Sachs Group Inc has reached a deal that would see Malaysia drop all criminal charges against the bank in exchange for US$3.9 billion of reparations for its role in raising money for the troubled sovereign wealth fund 1MDB.

The deal includes a cash settlement of US$2.5 billion paid to Malaysia, the ministry of finance said on Friday. At least another US$1.4 billion will come from seized 1MDB assets being returned with the help of the US Department of Justice and Goldman Sachs, it said in a statement.

The deal amount along with monies Malaysia has received from the Justice Department would amount to more than US$4.5 billion, the finance ministry said. It's unclear how the settlement with Malaysia will impact discussions between Goldman Sachs and the Justice Department. The bank is close to an agreement in the US after tussling over a potential guilty plea, Bloomberg News reported earlier this month.

The deal moves Goldman closer to ending its biggest legal threat since the darkest days of the 2008 financial crisis. Goldman helped the Malaysian government raise US$6.5 billion for the 1MDB fund, collecting some US$600 million in fees from bond sales in 2012 and 2013, according to court filings. BLOOMBERG