Malaysia seeks $7.5bn from Goldman Sachs in 1MDB reparations

Malaysia is reportedly seeking $7.5bn (£5.9bn) in reparations from Goldman Sachs over its dealings in the ongoing scandal surrounding the country's state investment fund 1MDB.

A criminal investigation is currently scrutinising three bond offerings raised by Goldman Sachs and others for 1MDB to a total of $6.5bn (£5.2bn). Malaysian authorities on Monday published a charge sheet naming Goldman Sachs in London, Hong Kong and Singapore, as well as Malaysia. 

In addition to the bonds’ total value, Goldman Sachs should also return $1bn to Malaysia to cover the approximate $600m in fees paid to the bank and bond coupons that were “higher than the market rate”, Malaysian finance minister Lim Guan Eng told the Financial Times.

Goldman Sachs is said to have set aside just $1.8bn for reparations as a result of the proceedings.

Citing unnamed sources, Bloomberg also reported that Singapore has expanded a criminal probe into fund flows linked to 1MDB to include Goldman Sachs.

In an emailed response, a Goldman Sachs spokesperson said: "The 1MDB bond offerings were meant to raise money to benefit Malaysia; instead, a huge portion of those funds were stolen for the benefit of members of the Malaysian government and their associates."

Malaysia has argued Goldman Sachs and four other individuals allegedly misappropriated $2.7bn in fund from 1MDB. The US Department of Justice, which is also pursuing action in the case, has said about $4.5bn was misappropriated to purchase property in London and New York, a private jet, Picasso paintings and jewellery, among other things.

Shares of the U.S. investment bank fell to a two-year low this week after Malaysia filed the charges.