Goldman Sachs Sues Malaysia Over 1MDB Settlement Dispute
Goldman Sachs Takes Legal Action Against Malaysia
Goldman Sachs Group has initiated legal proceedings against Malaysia in a UK court, according to a source familiar with the matter. This move comes as tensions escalate over a settlement related to Goldman Sachs’ involvement in the 1MDB investment-fund scandal. The arbitration has been filed with the London Court of International Arbitration (LCIA), as confirmed by the source.
Violation of Settlement Agreement
A spokesperson for Goldman Sachs stated, “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.” The bank had agreed to pay $3.9 billion in 2020 to resolve Malaysia’s criminal probe into its role in the massive 1MDB scandal.
The 1MDB Scandal: A Global Scheme
The 1MDB scandal involved an elaborate scheme that spanned the globe, resulting in the alleged misappropriation of $4.5 billion from the Malaysian sovereign wealth fund. This illicit scheme implicated high-level officials in the fund, former Malaysian Prime Minister Najib Razak, Goldman Sachs staff, and others. Prosecutors claim that Goldman Sachs facilitated the raising of $6.5 billion for 1MDB through bond sales, with a significant portion diverted to government officials, bankers, and their associates through bribes and kickbacks between 2009 and 2015.
Recovering Stolen Funds
In recent years, the United States has been returning recovered funds from seized assets believed to have been purchased with stolen 1MDB money. The LCIA lawsuit filed by Goldman Sachs against Malaysia has been reported by Bloomberg News.
