Malaysia may discuss dropping Goldman’s $7.5b charges for 1MDB case

The Goldman Sachs Group Inc. logo is displayed in the reception area of the One Raffles Link building, which houses one of the Goldman Sachs (Singapore) Pte offices, in Singapore, on Saturday, Dec. 22, 2018. Singapore has expanded a criminal probe into fund flows linked to scandal-plagued 1MDB to include Goldman Sachs Group, which helped raise money for the entity, people with knowledge of the matter said. Photographer: Nicky Loh/Bloomberg

An apology from Goldman Sachs Group Inc. doesn’t cut it for Malaysia, which said it may consider a discussion to absolve the bank of blame for its role in the 1MDB scandal for $7.5 billion.

The country filed criminal charges against the lender in December, the first for Goldman, and may discuss dropping those allegations if the bank pays the sum, Finance Minister Lim Guan Eng told reporters on Friday. Units of the bank were accused of making false statements in documents submitted to a local regulator in arranging $6.5 billion bond offers for troubled state fund 1MDB.

“Goldman Sachs should understand the agony and the trauma suffered by the Malaysian people as a result of the 1MDB scandal,” Lim said in the administrative capital of Putrajaya. “An apology is just not sufficient. Not enough. There must be the necessary reparations and compensations.”

Goldman’s Chief Executive Officer David Solomon this week apologized to the Malaysian people for the role that senior banker Tim Leissner played in the 1MDB scandal. The country was “defrauded by many individuals,” with Leissner being “one of those people,” Solomon said on a conference call with analysts after the investment bank reported its earnings Wednesday.

Leissner has pleaded guilty to charges including conspiring to launder money, while another former Goldman banker Roger Ng remains in custody in Malaysia as he faces extradition to the U.S. to face related allegations.

Solomon reiterated that the firm conducted considerable due diligence on the deals and was lied to by Leissner. Appearing on his first earnings call since becoming CEO in October, Solomon said the firm is cooperating with the U.S. Justice Department and the investigation is still open. Goldman has said it will vigorously defend against the charges by Malaysia.

The allegations against Goldman were filed by Attorney General Tommy Thomas as the nation’s top prosecutor, while the finance minister isn’t formally authorized to make decisions on criminal charges.

“At least he accepted that they have to bear and shoulder some responsibility,” Lim said, referring to Solomon. “That apology of course goes some way toward that, but that is insufficient.”