PETALING JAYA – US investment bank Goldman Sachs Group Inc. has made $2.5 billion payment that was promised to the Malaysian government to settle the accusations related to the 1MDB.
The funds will be used to repay the outstanding debt of the controversial state fund.
The source with knowledge of the settlement has confirmed that the payment was transferred to the government’s escrow account on Thursday. It plans to pay for the 1MDB’s outstanding debt including $3.5 billion of bonds due for next year and on year 2023.
The payment is part of the settlement agreed upon by Malaysia and Goldman Sachs to pay $2.5 billion in cash while guaranteeing the return of $1.4 billion from 1MDB assets that was seized around the world.
In exchanged for the settlement, Malaysia will drop all charges against the U.S Investment Bank allowing it to move on from one of the firm’s worst scandals since the financial crisis.
The money received will also help Malaysia boost its fund as the government is gearing up for its $70 billion of stimulus measures. The case management hearing for Goldman Sachs have been scheduled on Sept. 4.