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.
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.