The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.
Opinion

How much will make Goldman’s 1MDB problems go away?

A new sport in southeast Asia banking circles is guessing how much it will take for Goldman to settle with the Malaysian state over 1MDB.

We now know the parameters within which the true figure will fall. Malaysia wants $7.5 billion, and won’t get it. Goldman Sachs, says prime minister Mahathir Mohamad, has offered less than $2 billion, and that’s not enough.

Mahathir told the FT: “If they respond reasonably, we might not insist on getting that $7.5 billion.”

So, what’s the figure? A popular answer in the investment banking community is $4 billion. But would Goldman pay it?

For a while, in the earlier stages of the scandal, it looked like Goldman might not offer anything: it doesn’t have a huge amount of business in Malaysia anyway, and it is hard to see over what timeframe it could possibly accrue $2 billion of fees from the country.

The disputed capital raisings around 1MDB made Goldman about $600 million, and it has never been clear where the $7.5 billion figure Mahathir names came from in the first place.

Nevertheless, the reputational hit to Goldman is considerable and long-lasting, and it is understandable that it would want to draw a line under it.

In that respect, though, Malaysia is not the biggest worry: that’s the Department of Justice, which will draw its own conclusions about what Goldman owes.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree