Legal Actions Against 1MDB-involved Global Financial Institutions Stepped Up

Malaysia is focusing on global financial institutions accused of facilitating misappropriation of funds linked to 1Malaysia Development Bhd. 

The government are requesting courts in Malaysia, Singapore and Hong Kong to set early hearing dates in 2026 to “fast-track” existing suits against the financial firms, said Johari Abdul Ghani, who chairs a task force set up to recover assets of the state-owned company also known as 1MDB. 

“We are also reviewing other banks and financial intermediaries involved in the flow of funds from 1MDB”, he was quoted as saying. Malaysia has filed lawsuits at home and abroad against Deutsche Bank AG, Standard Chartered plc, Julius Baer Group Ltd, and RBS Coutts. 

As well as specialised corporate management Amicorp and law firm White & Case. 

1MDB had earlier dropped suits against Goldman Sachs, JPMorgan and Coutts and Co after the firms agreed to pay billions of dollars as settlement. Malaysia, nevertheless, is open to settlement negotiations, Johari was reported as saying. 

On October 14, the Finance Ministry reported that more than RM20 billion had been reclaimed through settlements with several financial institutions involved in the scandal. 

Separately, the Malaysian Anti-Corruption Commission had recovered about RM8 billion in cash and assets, which were already returned to the government’s consolidated fund under the Finance Ministry. 

The Malaysia Open jinx continued to haunt Pearly Tan-Thinaah Muralitharan after the second seeds crashed out in the second round on Thursday. 

The Malaysian pair went down 26-24, 21-17 to Indonesia's world No. 60 pair Febriana Dwipuji Kusuma–Meilysa Trias Puspitasari. 

It meant Pearly-Thinaah have now failed to progress beyond the second round in all five of their Malaysia Open appearances. They exited in the second round on debut in 2022, before suffering first-round defeats in the next three editions.

When What Americans Say Doesn't Mean What They Said

The Americans are an inventive lot. 

They just love to muck around with language. The vocabulary is readily changed in order to suit their own political agenda.

Goldman Sachs Group sued Malaysia in the London Court of International Arbitration on Wednesday amid rising tensions over a settlement agreement reached in connection with the bank’s role in the multibillion-dollar corruption scandal at state fund 1MDB.

 

The lawsuit comes less than two months after Malaysian Prime Minister Anwar threatened to take Goldman to court. The two sides are in disagreement over the 2020 deal, in which Goldman Sachs had agreed to pay $3.9 billion to settle Malaysia's criminal probe over their role in the scandal.

 

On Thursday, Malaysia’s 1MDB task force chairperson Johari Abdul Ghani described the bank’s move to arbitration as “premature”, because the “parties are still considered to be in the amicable good faith discussions stage”. 

 

Authorities in Malaysia and the United States say $4.5 billion was stolen from the now-defunct fund in an elaborate scheme that spanned the globe and implicated former Malaysian Prime Minister Najib Razak, Goldman executives and senior officials elsewhere.

 

Najib is presently serving a 12-year prison term for his part in misappropriating RM42 million from SRC International which are linked to 1MDB, while Goldman Sachs’s former partner and Southeast Asia chief Tim Leissner agreed to work with prosecutors in the US after pleading guilty in 2018 to money laundering and bribery charges. His Malaysian-based former colleague, Roger Ng, was sentenced to 10 years in prison on similar charges.

Goldman Sachs Submit DPA to Settle 1MDB Case

Goldman Sachs submitted a deferred prosecution agreement (DPA) on Thursday with the US Department of Justice over the 1MDB corruption scandal. 

Under terms of the deal, they agreed to pay a $2.3 billion fine for breaking anti-bribery laws and to disgorge $600 million of ill-gotten gains. 

The move followed a $3.9 billion settlement the bank reached with Malaysia in July 2020 to settle all charges against the bank there related to the matter.

The said scandal dates to the government of former Malaysian prime minister Najib Razak (right), which set up the 1MDB fund in 2009. 

Between 2009 and 2014, Goldman Sachs bankers paid more than $1.6 billion in bribes to foreign officials in Malaysia and Abu Dhabi to win 1MDB business, including underwriting $6.5 billion in three bond sales (2012-2013) for the Malaysian government's sovereign wealth fund – and which earned them $600 million in fees. 

The US Justice Department have said more than $4.5 billion was stolen from 1MDB by high-level officials at the fund and their associates between 2009 and 2015 to pay for real estate, art and other luxury items, with the help of those bankers. 

While the massive impropriety has proved a humbling and costly saga for the Wall Street giant, the long-awaited settlement should allow Chief Executive David Solomon to accelerate his plans to turn the bank around after a decade of under-performance, analysts said. 

The bank also indicated that they will recoup or withhold $174 million in compensation awarded to executives, including retired boss Lloyd Blankfein, under whose watch the wrongdoing happened.

Third Defeat for Theresa May's EU Divorce Deal

British MPs yesterday rejected Theresa May’s EU divorce deal for a third time, opening the way for a long delay to Brexit – or a potentially catastrophic “no deal” withdrawal in two weeks. 

Lawmakers in parliament’s lower House of Commons defied May’s plea to end the political deadlock that has plunged Britain into crisis, and defeated her withdrawal agreement by 344 votes to 286. 

It is yet another blow to a prime minister (right) who has all but lost control of her government and the Brexit process – particularly after she offered to quit if MPs backed the deal. 

May’s dead meat! 

And in the UK too, the Financial Conduct Authority has fined Goldman Sachs’ London unit £34 million (RM182 million) for misreporting hundreds of millions in transactions. 

According to the Financial Times, the FCA adjudged the US investment bank to have improperly reported over 213 million individual transactions between 2007 and 2017. 

Anyway, the 1MDB bond-issuer had cooperated with the investigation and even agreed to a settlement of the fines – the payoff carved 30 percent off the original penalty of £49 million. 

More punitive action awaits Goldman Sachs.