12-10-2023 (KUALA LUMPUR) Goldman Sachs filed a lawsuit against the Malaysian government in a UK court, citing increasing disagreements over the role the company played in the 1MDB investment fund scandal settlement.
According to Bloomberg, a spokesperson for the New York-based bank stated via email, “We are suing the Malaysian government because they violated their obligations regarding the guarantee of credit assets provided by Goldman Sachs in the settlement and recovery of other assets.”
Senior officials of the company have become increasingly frustrated with Malaysia’s demands to renegotiate the settlement agreement reached in 2020, seeking more severe penalties. They are also frustrated with the lack of information regarding the recovery of stolen assets.
According to an informed source cited in the report, Goldman Sachs filed the lawsuit against the Malaysian government on Wednesday at the International Arbitration Court in London.
Following the eruption of the 1MDB scandal, investigations were launched by various countries, and lawsuits were subsequently filed. Months after reaching a preliminary agreement in 2020, Goldman Sachs acknowledged its role in the largest foreign bribery case in US enforcement history and reached multiple international settlements totaling over $5 billion for its involvement in raising funds for 1MDB.
As part of the settlement reached with Malaysia in 2020, Goldman Sachs made an initial payment of $2.5 billion in September of the same year. The company also pledged to return $1.4 billion of 1MDB assets seized worldwide in exchange for the Malaysian government’s agreement to drop criminal charges and refrain from filing new ones.
Goldman Sachs stated that if Malaysia does not receive at least $500 million in assets and profits by August 2022, the company will make a temporary payment of $250 million. The lawsuit filed by Goldman Sachs mentions ongoing disagreements between the two parties regarding this matter.
The Malaysian government recently indicated that it would sue Goldman Sachs if the company does not renegotiate the settlement agreement.
Prime Minister Datuk Seri Anwar stated last month, “They (Goldman Sachs) think they can take it for granted, believing that we will not take further action. Apart from paying legal fees, we have nothing more to lose, but Goldman’s integrity will also be questioned.”
