Malaysia is considering launching legal procedures against foreign banks involved to the multibillion dollar 1Malaysia Development Berhad (1MDB) corruption scandal, according to the chairman of the 1MDB asset recovery taskforce.
Johari Abdul Ghani stated that the international banks failed to carry out adequate due diligence prior to enabling fund transactions associated with the sovereign fund, although he did not name the banks.
Investigators from Malaysia and the US believe that 1MDB was the source of $4.5 billion in theft; they have also implicated a former prime minister of Malaysia, employees of Goldman Sachs, and other high-ranking people.
In 2021, Malaysia sued units of Deutsche Bank, JP Morgan, and Coutts & Co to recover billions in alleged losses from the fund, though the cases have yet to progress in court.
Report says Goldman Sachs in 2020 had agreed to pay $3.9 billion to settle Malaysia’s criminal probe over its role in the scandal.
However, the parties are now in disagreement over the settlement, which stipulates that Goldman should make an interim payment if Malaysia does not recover at least $500 million from the firm by August 2022.
Additionally, Goldman sued Malaysia in a British court in October last year for the Malaysian government’s violation of its obligations to appropriately credit assets against the guarantee provided by Goldman in the settlement agreement and to recover other assets worth $1.4 billion.
Malaysia has denied the allegations it breached the settlement deal and accused Goldman Sachs of trying to offset 1MDB fines and settlements recovered from other institutions such as AmBank, and Abu Dhabi’s International Petroleum Investment Co. against the $1.4 billion sum.
Johari said the fines and settlements were not within the scope of Goldman’s asset recovery guarantee.
Report says the 1MDB task force was also examining whether negotiators and lawyers representing the Malaysian government at the time failed to secure a fair and adequate settlement from Goldman, given the firm’s role in the scandal.
Goldman had helped 1MDB raise $6.5 billion through bond sales, earning $600 million in fees, which was “unusually high”, Johari said.
“Such lapses on the part of negotiators and lawyers, in failing to negotiate a fair and clear settlement agreement have compromised the government of Malaysia’s position in the ongoing dispute,” Johari said.
Related posts:
Tesco considers sale of Thai, Malaysia stores
Tesco considers sale of Thailand, Malaysia stores
Fmr Malaysian PM Najib Razak gets 12-yr jail term in 1MDB corruption trial
South Africa’s tax service to take legal action against KPMG
Yusuf Lasun threatens legal action against ECOWAS speaker for defamation of character
Brexit: EU begins legal action against the UK over plan to override deal
Vice President Osinbajo institutes legal action against Sahara Reporters
U.S threatens legal action against Iran at IAEA over stonewalling
