Malaysia says Goldman apology not enough, wants $7.5 bn

Huge sums were purportedly looted from Malaysian government fund 1MDB and used to buy everything from yachts to real estate, in a fraud that allegedly involved former leader Najib Razak and contributed to his defeat at May elections.

Goldman’s role has come under scrutiny as it helped arrange $6.5 billion in bonds for the investment vehicle, and Malaysia has accused the bank and its former employees of stealing large amounts.

Goldman’s chief executive David Solomon earlier this week apologised for the role of a former partner at the bank, Tim Leissner, who has pleaded guilty in the US to bribery and money-laundering charges linked to the scandal.

But Finance Minister Lim Guan Eng said “an apology is not enough”.

“Apologise with $7.5 billion,” he was cited as saying by official news agency Bernama, reiterating a demand he first made last month that Goldman pay the sum to make amends for its role in the controversy.

“Goldman should understand the trauma suffered by the Malaysian people resulting from the 1MDB scandal,” he added.

Malaysia in December filed charges against Goldman, Leissner and another ex-employee of the bank, accusing them of misappropriating $2.7 billion, bribing officials and giving false statements in relation to the bond issues.

Asked whether Malaysia would drop the charges if the bank paid up, Lim said: “If they pay us $7.5 billion, then we will discuss it.”

During an earnings call this week, Solomon also defended the bank, saying it had been misled by Leissner and senior officials in the Malaysian government about the role of a key intermediary in the scandal, Low Taek Jho.

Better known as Jho Low, the jet-setting Malaysian financier is accused of being the mastermind of the fraud.