The Malaysian government has rebuffed claims made by Goldman Sachs in its lawsuit alleging that Malaysia violated a settlement agreement related to the 1MDB corruption scandal. Goldman Sachs previously agreed to pay $3.9 billion in 2020 to resolve Malaysia’s criminal investigation into its involvement in the multi-billion dollar 1MDB corruption scandal. However, the parties are now at odds over the settlement’s terms, which specify that Goldman should make an interim payment if Malaysia fails to recover at least $500 million from the bank by August 2022.
In response, Malaysia’s Attorney General Chambers issued a statement refuting the allegations of breaches and emphasizing that the government’s actions were in the best interest of the Malaysian people. Malaysia’s 1MDB task force also criticized Goldman Sachs for initiating arbitration proceedings prematurely. The task force chairman, Johari Abdul Ghani, noted that the parties were still engaged in amicable discussions, and Goldman had sought multiple extensions to the deadline for resolving the dispute.
Johari accused Goldman Sachs of trying to divert attention from the interim payment issue and stated that the Malaysian government would provide a suitable response. Goldman Sachs filed the lawsuit less than two months after Malaysian Prime Minister Anwar Ibrahim threatened to take legal action against the bank.
Malaysian and U.S. authorities estimate that approximately $4.5 billion was misappropriated from 1MDB between 2009 and 2014 in a far-reaching scheme that involved government and banking officials in Malaysia and other countries. Goldman Sachs had assisted 1MDB in raising $6.5 billion through two bond offerings, earning $600 million in fees, as reported by the U.S. Justice Department.
