1MDB task force reviewing negotiators, lawyers' role in settlement, says Johari
Published on: Tuesday, January 23, 2024
By: FMT
.jpg "1MDB task force reviewing negotiators, lawyers' role in settlement, says Johari")
Johari Ghani says the 1MDB task force is actively participating in the arbitration process to ensure a fair resolution.
PETALING JAYA: The 1MDB task force is examining whether negotiators and lawyers who represented the government in a settlement agreement with Goldman Sachs breached their fiduciary duties or were negligent in the discharge of their responsibilities.
Task force chairman Johari Ghani said there were concerns that those who represented the government at the time might have failed to secure a “fair and adequate settlement” from Goldman Sachs.
ADVERTISEMENT
“Such lapses on the part of negotiators and lawyers have compromised the government’s position in the ongoing dispute.
“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,” he said in a statement.
Johari also said Goldman Sachs’s direct involvement in the 1MDB scandal had resulted in it being fined US$2.9 billion by various regulators, including the US Department of Justice.
“Notably, the amount paid by Goldman Sachs in fines surpassed the cash payment paid to the government of Malaysia (US$2.5 billion), despite Malaysia suffering the greatest repercussions from the 1MDB scandal,” he said.
ADVERTISEMENT
Malaysia is obligated to pay a principal amount of US$6.5 billion plus interest of approximately US$3.2 billion over the span of 10 years to service the 1MDB debt.
Meanwhile, Johari said the arbitration proceedings with Goldman Sachs in London were ongoing, and that the parties were currently in the process of agreeing on a procedural timetable.
ADVERTISEMENT
“The complexities of the settlement agreement require careful examination, and the 1MDB task force is actively participating in the arbitration process to ensure a fair resolution in the best interests of the Malaysian people,” Johari said.
He said the current dispute centred on Goldman Sachs’s attempt to offset a fine of RM2.8 billion imposed on AmBank and a US$1.8 billion settlement entered with IPIC against a US$1.4 billion asset recovery guarantee given by the bank to the government under the terms of the deal struck in 2020.
The task force is also considering initiating legal proceedings against a number of foreign banks that facilitated 1MDB fund transfers without conducting proper know-your-client processes at the material time.
Previously, it was reported that seven or eight international banks were involved in the matter.
As part of the 2020 settlement with Malaysia, Goldman Sachs made an initial US$2.5 billion payment in September of that year.
It also guaranteed the return of US$1.4 billion of 1MDB assets seized by authorities worldwide in exchange for Malaysia agreeing to drop criminal charges against the firm and not bring on new ones.
The bank was also required to make an interim payment of US$250 million if Malaysia did not receive at least US$500 million of assets and proceeds by August 2022, according to Goldman Sachs.
In October last year, the company took the government to the London International Court of Arbitration following a disagreement over the US$500 million settlement terms.
Stay up-to-date by following Daily Express’s Telegram channel.
Daily Express Malaysia
