Malaysia has announced that it will be dropping all criminal charges against U.S. investment banking giant Goldman Sachs over its role in the 1MDB (1Malaysia Development Berhad) corruption scandal, a court in the capital Kuala Lumpur ruled on Friday, September 4.
The scandal, often described as one of the world’s greatest financial heists, plagued Malaysia for years—even seeping into the country’s mainstream political fabric. Dozens of prominent international bankers, Malaysian ruling party politicians—including the former prime minister Najib Razak—and even Hollywood celebrities were caught up in the saga.
According to court proceedings on Friday, the U.S. bank was discharged amounting to acquittal. As part of a deal with the Malaysian government, Goldman Sachs reached a $3.9 billion settlement in July that would see $2.5 billion paid out to the Malaysian authorities in cash with the remaining $1.4 billion recovered from assets seized during investigations related to 1MDB. The bank had to boost its legal reserves by $2.01 billion to account for the Malaysian settlement, Bloomberg reported.
Malaysian prosecutors will also cease investigations in pursuing cases against 17 of the company’s current and former directors, Hisyam Teh, a lawyer for the bank told _AFP_—confirming that acquittal orders were granted.
The bank came under intense global public scrutiny over its role in the 1MDB scandal—issuing bonds that aided Najib, who co-funded 1MDB as a sovereign wealth fund to promote Malaysian economic development, and members of his inner circle to acquire large sums of money.
After years of mounting evidence and court delays due to the coronavirus pandemic, a long-awaited corruption trial finally kicked off in July and found Najib guilty of corruption, money laundering and abuse of power. The case was watched by many in Malaysia, who viewed it as a test of the rule of law in the country.
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