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$7.5 billion from Goldman Sachs over 1MDB is ‘reasonable’: Malaysia

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Logo of 1MDB (1Malaysia Development Berhad) on a bus window in Kuala Lumpur, Malaysia.

Chris Jung | NurPhoto | Getty Images

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.



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Canada re-examining Boeing Max approval after FAA certification probe

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Boeing 737 MAX9 takes part in a flying display over the Le Bourget Airport during the 52nd International Paris Air Show on June 22, 2017, in Paris, France.

Yuriko Nakao | Getty Images

Boeing 737 MAX9 takes part in a flying display over the Le Bourget Airport during the 52nd International Paris Air Show on June 22, 2017, in Paris, France.

Transport Canada is re-examining the validation it gave Boeing’s 737 Max jets, following reports of a U.S. probe into the aircraft’s certification by the Federal Aviation Administration (FAA), Canadian Transport Minister Marc Garneau said on Monday.

Garneau told reporters in Ottawa that Transport Canada might not take any action but thinks it would be wise to re-examine the validation of the jet, which has been grounded worldwide for safety concerns following the crash of an Ethiopian plane.

Canada accepted the FAA’s March 2017 certification of the Max under a deal where such approvals by the United States are accepted by Canada and vice versa.



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Fed may let inflation run a little hotter than usual, Goldman says

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Federal Reserve Board Chairman Jerome Powell arrives to speak at a press conference after the Fed announced interest rates would remain unchanged, in Washington, DC, January 30, 2019.

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Federal Reserve Board Chairman Jerome Powell arrives to speak at a press conference after the Fed announced interest rates would remain unchanged, in Washington, DC, January 30, 2019.

Goldman Sachs says the Federal Reserve is likely to let inflation run higher than its 2 percent target.

The central bank has begun a monthslong review of its policy framework to consider alternative approaches to targeting inflation. Goldman believes the Fed will decide to allow overshoots of its inflation goal next year, which would take rate hike off the table.

“Our economists believe it is leaning toward adopting an average inflation targeting approach. If implemented, they believe this change would decrease the likelihood of further near-term policy tightening and lead to a small and gradual increase in both expected and realized price inflation,” Goldman equity strategist Ben Snider said in a note.

Since 2012, the Fed has always been attempting to hit a 2 percent inflation target, but the rate of price rises has fallen short through much of the recovery from the recession. The alternative approach that Goldman expects the Fed to adopt calls for targeting 2 percent on average over the business cycle, which encourages higher prices during expansions to balance weak inflation during recessions. New York Fed President John Williams is a supporter of this framework.

Fed chief Jerome Powell during his February testimony before the House Financial Services Committee said the central bank is examining alternatives to “more credibly achieve” its target, adding that it’s not looking at a higher inflation target.



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Activists call on NAACP to drop Jussie Smollett’s Image Award nom

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Jussie Smollett attends the Thurgood Marshall College Fund gala on Oct. 23, 2017 in Washington, DC.

Tasos Katopodis | Getty Images

Jussie Smollett attends the Thurgood Marshall College Fund gala on Oct. 23, 2017 in Washington, DC.

A black conservative group is calling on the National Association for the Advancement of Colored People to drop Jussie Smollett from the list of nominees for an Image Award after the actor was arrested on the suspicion of filing a false police report claiming to have been the victim of a hate crime.

Project 21, an activist group sponsored by the National Center for Public Policy Research, said Smollett “does not deserve honor after arrest for hate crimes hoax.”

“Everyone has a reason to be disappointed with Jussie Smollett right now, and these accumulated reasons justify the NAACP taking swift and appropriate action to remove him from consideration for its Image Award,” Council Nedd, co-chairman of Project 21, said in a statement Monday.

Smollett was nominated for outstanding supporting actor in a drama series for his work on “Empire.” The Image Awards is an event that celebrates the achievements and performances of people of color as well as individuals or groups who promote social justice through creative endeavors.

The Image Award nomination came before Smollett was charged with 16 counts of disorderly misconduct for allegedly lying to the Chicago police.

Representatives for Smollett and the NAACP’s Image Awards did not immediately respond to CNBC’s request for comment.

This isn’t the first time that Project 21 has contested the Image Award’s nominees. In 2004, the group criticized the NAACP for allowing R&B singer R. Kelly to keep his nomination for outstanding album despite the fact that he was under indictment for alleged child pornography violations.



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