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Five questions about the Goldman 1MDB settlement

The Goldman Sachs arrangement with the government of Malaysia over 1MDB only draws a line under part of the scandal. There is more to come – and questions to answer.

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The agreement between Goldman Sachs and the Malaysian government over the US bank’s work with 1MDB has inspired a number of ‘Goldman settles for $3.9 billion’ headlines. There’s a bit more going on beneath the surface, and not everything is resolved.

1. What’s in a number?

The $3.9 billion number is not what Goldman will be paying. That figure is $2.5 billion. The other $1.4 billion refers to a guarantee that the government of Malaysia will receive that amount in proceeds from 1MDB assets that have been seized around the world.

So where does $2.5 billion come from?

It appears to have been thrashed out as a middle ground between the $4.5 billion the US Department of Justice believes was siphoned out of Malaysia’s public purse through 1MDB, the $7.5 billion the Malaysian government has previously claimed it wants, and a figure below $2 billion that former prime minister Mahathir Mohamad says Goldman had previously offered to settle the matter.

Lim Guan Eng says the settlement is too low 

Over the weekend of July 25/26, there were already complaints led by Democratic Action Party secretary general and former minister of finance Lim Guan Eng that the settled amount was too low.

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