Goldman Sachs sues Malaysia as discord over 1MDB settlement escalates

GOLDMAN Sachs Group is suing Malaysia in a UK court, a source familiar with the matter told Reuters, as tensions escalate over a settlement linked to its role in the 1MDB (1Malaysia Development Bhd) investment-fund scandal.

The arbitration has been filed with the London Court of International Arbitration (LCIA), the source said.

“Today, we filed for arbitration against the Government of Malaysia for violating its obligations to appropriately credit assets against the guarantee provided by Goldman Sachs in our settlement agreement and to recover other assets,” a spokesperson for the bank told Reuters.

In 2020, Goldman Sachs had agreed to pay US$3.9 bil (RM18.4 bil) to settle Malaysia’s criminal probe over the US investment bank’s role in the multibillion-dollar 1MDB scandal.

Malaysian and the US authorities estimated that US$4.5 bil (RM21.2 bil) was stolen from 1MDB in an elaborate scheme that spanned the globe and implicated high-level officials in the fund, former Malaysian premier Datuk Seri Najib Razak, Goldman staff and others.

Prosecutors have said Goldman helped sovereign wealth fund 1MDB raise US$6.5 bil (RM30.7 bil) through three bond sales but that US$4.5 bil was diverted to government officials, bankers and their associates through bribes and kickbacks between 2009 and 2015.

The US has been returning funds it has recovered from seized assets that were allegedly bought with stolen 1MDB money.

The LCIA lawsuit was earlier reported by Bloomberg News. – Oct 12, 2023

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