Malaysia Considers Legal Action Against Goldman Sachs Regarding 1MDB Scandal

The Malaysian government, under the leadership of Prime Minister Anwar Ibrahim, is contemplating legal action against Goldman Sachs due to the bank's role in the 1MDB scandal.

Earlier in the year, Anwar Ibrahim had mentioned reevaluating the 1MDB settlement agreement, which involved a $2.5 billion cash payment and a guaranteed return of $1.4 billion in assets from Goldman Sachs in exchange for dropped charges. The prime minister now confirms that the option of a lawsuit remains on the table, while other alternatives, including negotiations, are also under consideration.

Asset Recovery Issues

A point of contention is the agreed-upon sum in the settlement, with discrepancies arising concerning the delivery of $500 million in assets and proceeds by August 2022. As per the settlement agreement, if this condition was unfulfilled, an interim payment of $250 million would be due. If a mutual resolution isn't achieved, the issue will likely move to arbitration, as indicated by Goldman in a previous filing.

Goldman Sachs played a pivotal role in facilitating 1MDB to secure $6.5 billion through two bond offerings, which accrued $600 million in fees for the bank, as noted by the US Justice Department. Following this, around $4.5 billion is believed to have been misappropriated between 2009 and 2014. Goldman Sachs maintains its stance of having no involvement in the malfeasance.