Goldman Sachs has reached a $3.9bn (£3bn) settlement with the Malaysian government over the multi-billion dollar 1MDB scandal, relating to the bank's role in the corruption scandal at 1Malaysia Development Berhad, the country's sovereign wealth fund.
The settlement includes a $2.5bn cash payout by Goldmans and a further guarantee to return at least "at least $1.4bn in proceeds from assets related to 1MDB seized by governmental authorities around the world," the company said in a statement.
The government of Malaysia has agreed to drop all criminal and regulatory proceedings in Malaysia involving the firm, including pending proceedings against subsidiaries of Goldman Sachs and certain current and former directors, Goldman Sachs said in a statement announcing the settlement.
As reported, the case relates to bond sales that Goldman Sachs arranged and underwrote for 1MDB, from which the US Justice Department alleges $4.5bn was stolen to which the bank said the charges were "misdirected".
Today's settlement does not cover two former Goldman Sachs bankers, Tim Leissner and Roger Ng but the deal resolves all outstanding charges and claims against the bank.
The company statement pointed that the agreement in principle "does not resolve the other pending governmental and regulatory investigations involving the firm relating to 1MDB".
"In light of this development, Goldman Sachs expects to materially increase its provisions for litigation and regulatory proceedings for the second quarter of 2020, which will be reflected in its financial statements to be filed with its Quarterly Report on Form 10-Q for the period ended June 30, 2020," the statement added.