Malaysia could drop Goldman Sachs' 1MDB charges for $7.5 billion

An apology from Goldman Sachs Group 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 apologised 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 US to face related allegations. Solomon reiterated that the firm conducted considerable due diligence on the deals and was lied to by Leissner.