October 4, 2019 / 6:55 AM / 10 days ago

Malaysia says no talks with Goldman Sachs on recovering funds lost in 1MDB scandal

FILE PHOTO: A man walks past a 1 Malaysia Development Berhad (1MDB) billboard at the funds flagship Tun Razak Exchange development in Kuala Lumpur, March 1, 2015. REUTERS/Olivia Harris/File Photo

KUALA LUMPUR (Reuters) - Malaysia’s finance minister on Friday said there are no talks with Goldman Sachs Group Inc on the recovery of billions of dollars of state funds lost via the U.S. bank’s former client 1Malaysia Development Bhd (1MDB), local media reported.

Malaysia filed criminal charges last year against Goldman Sachs over its role as underwriter and arranger of three bond sales that raised $6.5 billion for the now-defunct state investment fund.

The U.S. Department of Justice is investigating the bank for its role in the sales which involved fees higher than market rates. It also estimated $4.5 billion was misappropriated from 1MDB by fund officials and associates from 2009 through 2014.

“There are no discussions with Goldman Sachs but we will continue with the legal process conducted by the attorney-general,” Malaysian Minister of Finance Lim Guan Eng was quoted as saying by news portal Malaysiakini.

A ministry official confirmed the comment to Reuters.

In January, Lim said the government would be ready to drop criminal charges against Goldman Sachs if the bank paid $7.5 billion in reparations.

Malaysian prosecutors then filed criminal charges in August against 17 current and former directors at Goldman Sachs subsidiaries.

Goldman Sachs has denied wrongdoing, saying individuals at 1MDB and in Malaysia’s former government lied to the bank, outside counsel and others about the use of the bond sale proceeds.

Reporting by Joseph Sipalan; Editing by Christopher Cushing

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