Goldman Sachs has been in talks with Malaysian authorities to drop criminal charges against three subsidiaries of the bank in connection with the 1MDB scandal, the Southeast Asian country's top prosecutor told the Nikkei Asian Review.

Malaysian and US investigators say about US$4.5 billion was misappropriated from the now-defunct state investment fund 1Malaysia Development Berhad (1MDB).

Last year, Malaysia filed criminal charges against Goldman over its role as underwriter and arranger of three bond sales that raised US$6.5 billion for 1MDB.

Malaysian prosecutors in August filed criminal charges against 17 current and former directors at its units.

“We have had some preliminary meetings, but the gulf is still very wide,” the Nikkei on Thursday cited Malaysian Attorney General Tommy Thomas as saying.

“Both the criminal charges and settlement negotiations are happening in parallel. They are not mutually exclusive.”

The two sides had not been able to reach an agreement on the amount of compensation over two rounds of discussions, Thomas said.

Thomas and officials in his office were not immediately available for comment.

Goldman Sachs said on Tuesday it was in discussions with governmental and regulatory authorities on the possibility of a resolution of investigations relating to 1MDB.

The US bank could not immediately be reached for comment.

- Reuters