Malaysia Privately Discusses Lower Penalty of $2 Billion for Goldman Sachs Over 1 MDB Scandal
The 1MDB scandal is one of the biggest financial scams to have hit Malaysia and has been the talk of the world for many months due to the potential penalties for investment banking giant Goldman Sachs. The American investment bank did play an integral role in the whole operation and in public; the Malaysian authorities had demanded as much as $7.5 billion in penalties. However, it has now emerged that the Malaysian negotiators have been talking privately with Goldman Sachs and are willing to let the bank off the hook for a much lower penalty.
According to sources that are close to the development, the negotiators have been in contact with Goldman Sachs and have spoken about a penalty fee ranging between $2 billion to $3 billion. In this regard, it is also important to keep in mind that what the investment bank ultimately pays as a penalty might differ from the figures being touted by the sources. However, it shows that the powers are actually open to the idea of settling for less than what they had publicly demanded from the world’s preeminent investment bank.
1MDB is the investment vehicle of the Malaysian state and, hence, the scam has caused immense embarrassment to the government of the course. The current Prime Minister of Malaysia, Mahatir Mohamed has apparently expressed his desire to resolve the issue with Goldman Sachs by the end of 2019. That could be another reason why the negotiators are now open to the idea of a lower penalty. The scam had been a bitter blow to not only the reputation of the government but also to the fiscal balance in Malaysia. Hence, the political leadership in the country is keen to get a settlement that is of a substantial amount.