Goldman Sachs Group has filed a lawsuit against Malaysia in a UK court, further escalating tensions over a settlement agreement related to the 1MDB corruption scandal. The bank claims that Malaysia has violated its obligations to credit assets against the guarantee provided by Goldman Sachs in the settlement agreement and to recover other assets. A spokesperson for the bank stated, “Today, we filed for arbitration against the government of Malaysia.” The arbitration has been filed with the London Court of International Arbitration.
The disagreement between the two parties stems from a 2020 settlement agreement, in which Goldman Sachs agreed to pay $3.9 billion to resolve Malaysia’s criminal probe into its involvement in the 1MDB scandal. Additionally, the bank is required to make a one-time interim payment of $250 million if the Malaysian government has not received at least $500 million in assets and proceeds by August 2022.
However, conflicting views have emerged concerning whether Malaysia has recovered at least $500 million as of August 2022 and whether an interim payment is due. This disagreement has led to the recent legal action taken by Goldman Sachs.
This lawsuit comes after Malaysian Prime Minister Datuk Seri Anwar Ibrahim threatened to take Goldman Sachs to court less than two months ago. The office of the Prime Minister and the Attorney General’s Chambers have not yet responded to requests for comment regarding the recent lawsuit.
The 1MDB corruption scandal involved the alleged theft of $4.5 billion from the Malaysian sovereign wealth fund. The scheme was described as elaborate and reached global proportions, implicating high-level officials within the fund, including former Malaysian Prime Minister Datuk Seri Najib Razak, as well as Goldman Sachs staff and others. Prosecutors have claimed that Goldman Sachs helped 1MDB raise $6.5 billion through bond sales, earning $600 million in fees.
In recent years, the United States has been returning recovered funds from seized assets that were allegedly purchased with stolen 1MDB money.
The lawsuit filed by Goldman Sachs against Malaysia adds another layer to the ongoing controversy surrounding the 1MDB scandal. The outcome of the arbitration and potential legal proceedings will be of significant interest to both parties involved and will likely impact the broader international financial community as well.
More detail via Malay Mail here… ( Image via Malay Mail )