KUALA LUMPUR – The Attorney-General’s Chambers (AGC) has dismissed the allegations of misconduct made by Goldman Sachs in an arbitration suit related to 1Malaysia Development Bhd (1MDB) against the Malaysian government.
In a statement today, the AGC confirmed that it had received Goldman Sachs’ request for arbitration yesterday, noting that the dispute arose from the investment firm’s allegations of misconduct by the Malaysian government in a 2020 settlement agreement.
“The Malaysian government denies all allegations contained in the request for arbitration as it mischaracterises the conduct of the Malaysian government.
“The AGC, on behalf of the Malaysian government, will prepare its response within the confines of the law and reiterate that the interest of the Malaysian people is paramount,” the AGC said.
Previously, 1MDB task force chairman Datuk Seri Johari Abdul Ghani accused Goldman Sachs of attempting to draw attention away from its obligations under the settlement agreement by initiating the suit against Malaysia.
Johari also said that the 1MDB task force committee is “quite surprised” at Goldman Sachs’ conduct, as parties are still in the stage of good faith discussions to resolve any dispute amicably.
Earlier today, Bloomberg reported that Goldman Sachs had taken the “unusual step” of filing for arbitration in a UK court against the Malaysian government for allegedly violating conditions outlined in the settlement agreement.
The move follows Goldman Sachs’ executives supposedly growing “increasingly frustrated” with Malaysia’s demands to redo the existing agreement in favour of heavier penalties, and a supposed lack of information over 1MDB assets recovered by the nation.
Goldman Sachs’ move also comes less than a month after Prime Minister Datuk Seri Anwar Ibrahim issued a cautionary message to the company, warning the financial firm that legal action will be taken if it fails to honour its settlement with the Malaysian government.
The settlement agreement was signed on August 18, 2020, and consists of two parts: a cash payment of US$2.5 billion (RM11.7 billion) paid 10 days after signing, and an asset recovery guarantee of US$1.4 billion by Goldman Sachs within five years from the date of the agreement. Under the US$1.4-billion asset recovery guarantee by Goldman Sachs, if the Malaysian government did not recover a sum of US$500 million by August 18, 2022, the investment firm would be required to pay US$250 million as an interim payment to the Malaysian government.
On August 18, 2022, the accounting provided by the Malaysian government to Goldman Sachs showed that it had not received the US$500 million, hence, the government is entitled to the US$250-million interim payment. This, however, was disputed by Goldman Sachs.
Four separate extensions were then granted to Goldman Sachs by the government here upon expiry of the initial August 18, 2022 deadline.
The latest extension is set to expire on November 8. If a settlement is not reached between the parties by this deadline, the government can commence arbitration proceedings in respect of the US$250-million interim payment. – October 12, 2023