Malaysia has discussed a $2bn to $3bn settlement with Goldman Sachs over the US bank's alleged role in the 1MDB scandal, less than half the sum the Southeast Asian nation had demanded earlier.
Although the final deal may diverge for this range, it demonstrates the willingness by to be flexible, a Bloomberg report said, citing anonymous sources.
It is unclear whether or not the settlement would lead Malaysian Attorney General Tommy Thomas to drop charges against Goldman Sachs' 17 current and former executives, sources added. Malaysian prosecutors are simultaneously pushing for a Goldman Sachs hearing in a local high court.
A sizable settlement would help cement the country’s fiscal footing"
Investigators in Malaysia and the United States say about $4.5bn was misappropriated from the now-defunct state investment fund 1Malaysia Development Berhad, set up in 2009 by former Prime Minister Najib Razak who has been slapped with several charges.
Malaysia's finance minister said in January the government would be ready to discuss dropping the charges against Goldman if it agreed to pay $7.5 billion in reparations. Goldman has not commented on any figure but said last year it had set aside $1.8bn to cover potential losses related to 1MDB legal proceedings.
According to the report, prime minister Tun Dr Mahathir Mohamad is keen for a settlement to be reached this year to show progress on his pledge to recoup the billions of ringgit plundered from the sovereign investment fund.
"He's dispatched Daim Zainuddin, a confidant outside his cabinet, to serve as a top dealmaker.
"A sizable settlement would help cement the country's fiscal footing, which Mahathir has cited as a reason he's delayed handing over power to his former protege, Anwar Ibrahim," one of several unnamed sources close to the case was quoted saying.
The Malaysian government led by Pakatan Harapan has demanded reparation payments from Goldman, saying $7.5bn was a "reasonable" amount given that the investment bank reaped $600m from helping 1MDB raise $6.5bn in 2012 and 2013, much of which later went missing.
The report was unclear if the Attorney-General will be dropping its criminal charges against the US investment bank, or 17 current and former Goldman executives who have been charged individually.