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Logo of 1MDB (1Malaysia Development Berhad) on a bus window in Kuala Lumpur, Malaysia.
Malaysian Finance Minister Lim Guan Eng said Monday that the $7.5 billion his country is seeking from American investment bank Goldman Sachs over the 1Malaysia Development Berhad scandal is an “extremely reasonable” amount.
The fallout from the disappearance of billions of dollars from that Malaysian sovereign wealth fund, commonly known as 1MDB, has led to money laundering charges filed against Najib Razak, the former prime minister who lost power in elections last year.
The scandal involved money being illegally transferred across shell companies and individual bank accounts in many countries. The U.S. Department of Justice previously alleged that Najib received $681 million from proceeds misappropriated from a bond issue arranged by Goldman Sachs in 2013.
Lim told The Financial Times last month that Malaysia was seeking $7.5 billion from Goldman Sachs and he told CNBC’s Emily Tan in a Monday interview at a financial forum in Hong Kong that the figure remains what the country deserves.
The finance minister argued that Malaysia never got any money from the issuance of bonds, the fees charged were “astronomical” and the terms were “very unfavorable.”
“So we are looking at a sum, a reasonable sum that can compensate the agony and the trauma as well as the losses that we suffered,” he said. “I think 7.5 billion U.S. dollars is an extremely reasonable figure.”
He also called on Goldman Sachs to “have a heart” and to include a mention in its annual earnings report that it would “make some provisions for some reparation payments to Malaysia.”
Contacted by CNBC about Lim’s comments, Edward Naylor, Goldman Sachs’ head of corporate communications for the Asia Pacific, referred in an email to previous statements the bank has made in which it called charges against it “misdirected” and vowed to “vigorously” defend against them.
