KUALA LUMPUR, July 31 — The recent settlement made between the government and US investment bank Goldman Sachs Group Inc was in no way a straight-forward process, where a deal was only made after ‘sweeteners’ were introduced by the latter, reports Bloomberg. 

Citing sources who commented on condition of anonymity, the report detailed how Goldman Sachs' top officials, including Chief of Staff John Rogers and his counsels Karen Seymour and David Markowits, flew halfway across the world to strike a deal with the Malaysian government despite strict travel restrictions. 

Among those picked to represent the interests of the country included Prime Minister Tan Sri Muhyiddin Yassin’s personal lawyer Rosli Dahlan, Treasury secretary-general Datuk Asri Hamidon, and Securities Commission chairman Datuk Syed Zaid Albar. 

The weeklong negotiations reportedly took place within the five-star Mandarin Oriental Hotel, lasting from morning to night, even stalling several times as Malaysia pressed for money from the Wall Street bank before the deal was finally inked on Friday, July 24.

It was said that Malaysian officials had first pressed for a settlement of at least US7 billion (RM29.6 billion), significantly higher than Goldman Sachs’ opening US1.75 billion (RM7.42 billion) offer, displaying the differing positions of both sides. 

The back and forth continued before an offer of US2.2 billion (RM9.33 billion) in cash was reportedly put on the table by the bank before they were shut down again. 

The report noted how the increased offer was a signal of Goldman Sachs’ intent at striking a deal to clear their name and stop criminal charges by Malaysia for their alleged involvement in the 1Malaysia Development Berhad (1MDB) scandal. 

"Negotiations dragged on through the week. Long days stretched into night, with hotel staff delivering boxed meals including local rice dishes, in keeping with Covid-19 measures. 

"The talks stalled a few times as Malaysia pressed Goldman to cough up more toward the billions the country alleges were siphoned away to buy condos, jewellery and art,” read the report. 

Then, when an impasse was reached, the report claimed that Goldman Sachs offered the ‘sweetener’ that involved US$2.5 billion (RM10.6 billion) in cash, and a guarantee to recover US1.4 billion (RM5.94 billion) in assets supposedly linked to 1MDB. 

"The sweetener wasn’t dreamed up on the spot: Goldman had the offer in its back pocket all along in case it was needed to reach a deal.

"Any additional money recovered would go to the country, while Goldman stood ready to bridge any gap,” read the report. 

Most of the assets involved are those allegedly purchased by fugitive financier Low Taek Jho using funds siphoned from 1MDB, which among them include a penthouse apartment in Manhattan, New York, a Los Angeles mansion, artist Andy Warhol’s ‘Campbell’s Soup Can’ painting valued at US6 million (RM25.44 million), and even a vintage French "King Kong” poster. 

The deal meant that all criminal charges and legal claims initiated by Malaysia against the investment bank would be dropped.

It was also mentioned that Goldman Sachs had come up with the US1.4 billion amount after running valuation for assets they aim to seize, then deciding there were no major risks of exposure and value fluctuation, the difference of which they would have to compensate for. 

Meanwhile Malaysia has valued the deal to be worth more than US4.5 billion (RM19.08 billion) in total, after taking into account the money and assets already seized and returned by the US Department of Justice.

This puts an end to one chapter of the 1MDB saga, which over the last two weeks saw this settlement made and former prime minister Datuk Seri Najib Razak convicted, fined, and handed a jail term. 

This after Najib was found guilty on corruption and power abuse charges involving funds originating from SRC International Sdn Bhd, a former unit of 1MDB.