1mdb – billions of dollars unaccounted for
12 October, 2023
The United States investment bank Goldman Sachs has sued Malaysia in a London arbitration court amid rising tension over a settlement deal reached in connection with the bank’s role in the multibillion-dollar corruption scandal at state fund 1MDB.
But the deal has been mired in disputes and this week Goldman filed for arbitration at the London Court of International Arbitration.
On Thursday, Malaysia’s 1MDB task force chairman 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”.
Under the terms of the deal, Goldman was also supposed to make a one-time interim payment of $250m if Malaysia had not received at least $500m in assets and proceeds by August 2022.
Why is Goldman now suing Malaysia?
The dispute centers on whether Malaysia had recovered at least $500m as of August 2022 and whether any interim payment was due.
But the US Department of Justice (DoJ) said some $4.5bn was diverted to offshore bank accounts and shell companies. Goldman has claimed certain members of the former Malaysian government as well as 1MDB officials lied about how proceeds from the bond sales would be used. Malaysian authorities say billions more remain unaccounted for.
The US has said the 1MDB case was its largest ever kleptocracy investigation.
[May 10 2021 ]
Malaysia’s 1MDB state fund is suing subsidiaries of Deutsche Bank, JP Morgan and Coutts & Co to recover billions in alleged losses from a corruption scandal at the fund.
1MDB is seeks $1.11bn (£785bn) from Deutsche Bank (Malaysia) Bhd, $800m from JP Morgan (Switzerland) Ltd and $1.03bn from a Swiss-based Coutts unit, and interest payments from all of them. Malaysian authorities have previously said there were billions of dollars more unaccounted for.
In 2003, Coutts acquired Zürich-based Bank von Ernst & Cie and in 2008, Coutts Bank von Ernst and other Coutts International subsidiaries became RBS Coutts Bank. These traded as RBS Coutts International to align them with the parent Group until 2011, when RBS Coutts was renamed Coutts & Co. Limited. The international division was renamed Coutts International prior to its sale to Union Bancaire Privée in March 2015.
Coutts International was sold to Union Bancaire Privée (UBP) on 29 March 2015, for an undisclosed figure. T
[September 8 2020 1MDB: U.S. Seeks Over $330M from Clyde & Co. ]
U.S. Seeks Over $330M In New 1MDB Forfeiture Actions held in escrow by law firm Clyde & Co.
A subsidiary of Venezuela’s national oil and gas company PDVSA has obtained an English court injunction to prevent Clyde & Co from transferring US$340 million to a Saudi-owned client to comply with an UNCITRAL award – amid allegations linking the client to funds stolen from Malaysian sovereign wealth fund 1MDB.
In Malaysia, High court judge Mohd Nazlan Mohd Ghazali imposed a temporary freeze on the funds in Britain held by PetroSaudi,Others named in the application were PSI co-founder Tarek Obaid; PetroSaudi Oil Services (Venezuela) Limited; Clyde & Co LLP, which is holding $500 million of PetroSaudi funds in escrow; and an account under the name Temple Fiduciary Services, 200 Strand, London, United Kingdom, WC2R 1DJ, which Malaysian prosecutors say allegedly belongs to Tarek.
[February 25 2020 Malaysia v. Goldman Sachs ]
Three arms of Goldman Sachs reportedly pleaded not guilty February 24 2020 in Kuala Lumpur after a judge read out the charges related to the bank’s alleged role in raising $6.5 billion in bond sales for the state-backed fund 1Malaysia Development Berhad.
[October 23 2019]
Malaysia’s finance minister said the government would be ready to discuss dropping the charges against Goldman if it agreed to pay $7.5 billion in reparations. Goldman has not commented on any figure but said last year it had set aside $1.8 billion to cover potential losses related to 1MDB legal proceedings.
Malaysian Prime Minister Mahathir Mohamad was keen to reach a deal with Goldman this year itself as the government grapples with a high debt burden.
[September 19 2019]
It is the 10th day of the 1MDB trial in Malaysia (Sept 19). the DoJ has not yet brought criminal charges againstGoldman Sachs.
[August 9 2019]
Malaysia filed criminal charges against 17 current and former directors of Goldman Sachs Group Inc. in a case linked to 1MDB.
Those charged include Goldman Sachs Group Vice-Chairman Richard J. Gnodde, who served as co-chief executive officer at Goldman Sachs International, and Brian Griffiths, once an adviser to former U.K. Prime Minister Margaret Thatcher. John Michael Evans, who retired from the U.S. bank to become president of Alibaba Group Holding Ltd., was also charged.
Other Goldman directors charged include Michael Sydney Sherwood, Robin Antony Vince and Claes Ake Gustaf Dahlback from Goldman Sachs International; and Goh Boon Leng and Liow Chang Lee from Goldman Sachs (Singapore) Pte.
Ten Goldman Sachs (Asia) LLC officials were also charged, including Dimitrios Kavvathas, John Michael Evans, Amol Sagun Naik, Keith Leslie Hayes, Richard Mark Campbell-Breeden, Ronald Suk Bae Lee, Archie William Parnell, Frederick Towfigh, Matthew Thayer Freemont-Smith and Oliver Robert Morgan Bolitho. The charges say the Goldman Sachs units omitted material facts in the bond offerings, among them that Malaysian financier Low Taek Jho was the operator and key intermediary for 1MDB. Three subsidiaries charged: Goldman Sachs International, Goldman Sachs (Asia) LLC and Goldman Sachs (Singapore) Pte.
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