KUALA LUMPUR (Oct 12): The Attorney General’s Chambers (AGC) has rejected Goldman Sachs Group Inc's claim that Putrajaya has breached the US$3.9 billion (RM18.4 billion) settlement agreement in relation to the investment bank’s role in the 1Malaysia Development Bhd (1MDB) financial scandal.
In a statement on Thursday, the AGC said the government denies all allegations contained in Goldman Sachs’s request for arbitration on the matter, saying it mischaracterises the conduct of the government.
“The AGC, on behalf of the government of Malaysia, will prepare its response within the confines of the law and reiterates that the interest of the Malaysian people is paramount,” the AGC added.
Goldman Sachs filed the request for arbitration with the London Court of International Arbitration on Wednesday, claiming that Putrajaya is allegedly "violating its obligation to appropriately credit assets against the guarantee provided by Goldman" in the settlement agreement, and recovery of other assets, Reuters reported citing a spokesperson for the bank.
In August 2020, Goldman Sachs agreed to a US$3.9 billion settlement agreement with the Malaysian government in relation to the investment bank’s role in the 1MDB scandal.
The settlement was split into a cash payment of US$2.5 billion and guarantee of the return of US$1.4 billion of 1MDB assets that are traceable to the diverted proceeds from three bond issuances by the investment bank worth US$6.5 billion.
Goldman Sachs also agreed to make a one-time interim payment of US$250 million if Malaysia has not received at least US$500 million in assets and proceeds by August 2022.
According to Goldman Sachs, this is where the two parties are in dispute, as they are in disagreement over whether the US$500 million recovery threshold was met, and whether any interim payment was due.
The settlement agreement is Goldman Sachs' acknowledgement of the misconduct of its two former executives — Tim Leissner and Roger Ng — in the 1MDB scandal, which resulted in the looting of US$4.5 billion from the sovereign wealth fund.
Prime Minister Datuk Seri Anwar Ibrahim has previously said that the settlement was insufficient, and that the government intends to recover more funds in holding Goldman Sachs accountable for its role in the scandal, even mulling a potential lawsuit against the investment bank.
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