1MDB taskforce mulls suing several foreign banks
The 1MDB taskforce is considering initiating legal action against several foreign banks that facilitated fund transfers related to the sovereign wealth fund without conducting proper Know Your Client processes at that material time.
Its chairperson Johari Abdul Ghani said the taskforce was firmly committed to addressing the 1MDB matter transparently and holding all parties accountable.
He added that...
The 1MDB taskforce is considering initiating legal action against several foreign banks that facilitated fund transfers related to the sovereign wealth fund without conducting proper Know Your Client processes at that material time.
Its chairperson Johari Abdul Ghani said the taskforce was firmly committed to addressing the 1MDB matter transparently and holding all parties accountable.
He added that the taskforce was additionally examining whether the negotiators and lawyers representing the government in a 2020 settlement agreement with Goldman Sachs may have failed in their fiduciary duty or were negligent.
According to Johari, the settlement agreement signed in August 2020 required Goldman Sachs to pay US$2.5 billion (RM11.8 billion) cash payment and provide the government with a US$1.4 billion asset recovery guarantee.
However, he said Goldman Sachs had been fined US$2.9 billion by various regulators, surpassing its cash payment paid to the government.
“This is despite the country suffering the greatest repercussions from the 1MDB scandal by having to pay US$6.5 billion in principal amount plus interest of approximately US$3.2 billion over 10 years to service the 1MDB debt,” he said.
Unusually high advisory fees
Johari said the dispute centres around Goldman Sachs’ attempt to offset the fine imposed on AmBank (RM2.8 billion) and the settlement agreement with Ipic (RM8.5 billion) against the US$1.4 billion asset recovery guarantee.
“Goldman Sachs contends that its obligations under the asset recovery guarantee have been discharged through this offset.
“However, the government disputes this, and asserts that the fines imposed on AmBank and the settlement with Ipic are not encompassed within the scope of the US$1.4 billion asset recovery guarantee,” he added.
Johari said lapses in the negotiators and lawyers to negotiate a fair and clear agreement may have compromised the government’s position in the ongoing dispute.
He added that 1MDB paid unusually high advisory fees of US$606 million to Goldman Sachs for advising on the issuance of the three bonds totalling US$6.5 billion.
The government had filed its reply on Nov 8 last year to Goldman Sachs’ arbitration request and the parties are in the process of agreeing on the procedural timetable, Johari added.
