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Malaysia Is Thinking About Suing International Banks Connected To The 1MDB Bribery

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The head of the 1MDB asset recovery committee stated on Tuesday that Malaysia is thinking of filing lawsuits against foreign banks connected to the multi million dollar 1Malaysia Development Berhad (1MDB) corruption scandal.

The Accountable Parties

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 the United States and Malaysia estimate that $4.5 billion was taken from 1MDB, linking Goldman Sachs (GS.N), a former prime minister of Malaysia, to the theft. This opens new tab staff and high-level officials elsewhere.

In 2021, Malaysia filed lawsuits against Coutts & Co., JP Morgan, and Deutsche Bank divisions, claiming billions of dollars in purported losses from the fund; however, the cases are still pending in court.

“The 1MDB task force is firmly committed in addressing the 1MDB matter transparently and holding all parties accountable,” Johari stated in a statement.

Criminal Investigation

In 2020, Goldman Sachs consented to pay $3.9 billion to resolve Malaysia’s criminal investigation into the company’s involvement in the incident.

Malaysia

Source: CNBC’s

However, the settlement, which states that Goldman must make an interim payment if Malaysia does not receive at least $500 million from the company by August 2022, has caused the parties to disagree.

In October of last year, Goldman filed a lawsuit in a British court against Malaysia, claiming that the government had failed to fulfill its duties to properly credit assets against the guarantee that Goldman had given in the settlement deal, as well as to retrieve additional assets valued at $1.4 billion.

Malaysia has refuted the accusations that it violated the terms of the settlement agreement, and on Tuesday, it charged Goldman Sachs with attempting to offset the $1.4 billion amount with 1MDB fines and settlements obtained from other organisations like AmBank and Abu Dhabi’s International Petroleum Investment Co (IPIC).

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