Ethermac|Malaysia questions Goldman Sachs lawsuit over 1MDB settlement, saying it’s premature

KUALA LUMPUR,Ethermac Malaysia (AP) — The Malaysian government questioned Thursday a move by Goldman Sachs to file for arbitration in a dispute connected with the multibillion-dollar looting of a sovereign wealth fund.

Johari Abdul Ghani heads a task force to recover assets lost from fund known as 1MDB. He said it’s too early for arbitration since talks are still underway to resolve the conflict and accused the U.S. bank of trying to shift attention away from its payment obligations.

Under a 2020 deal, Goldman Sachs paid Malaysia $2.5 billion to resolve criminal charges over the 1MDB saga. It also guaranteed it would help recover $1.4 billion in 1MDB assets. including $500 million by August 2022. If it failed, it had to cough up $250 million as an interim payment. The two sides are at odds over the interim payment.

Malaysia says Goldman Sachs failed to recover the agreed amount last year and must pay the $250 million. The bank disagreed.

Johari said the government has extended the deadline for talks four times. Malaysia could commence arbitration proceedings if a settlement is not reached by Nov. 8, he said.

“At this juncture ... the parties are still considered to be in the amicable good faith discussions stage and therefore as an aggrieved party, the 1MDB task force views Goldman Sachs’ initiation of arbitration proceedings as premature,” he said in a statement.

Malaysia will respond according to established legal frameworks and ensure the people’s interest is safeguarded, Johari added without elaborating.

Investigators say more than $4.5 billion was stolen from 1MDB, a fund set up by then Malaysian leader Najib Razak to fund economic development projects. The funds were laundered and used to buy yachts and real estate and to finance the 2013 film “The Wolf of Wall Street.”

The saga led to the Najib’s defeat in 2018 general elections. He began a 12-year jail term last year after losing an appeal against his conviction for the first of several graft charges linked to 1MDB. Malaysian financier Low Taek Jho, accused of being the architect of the plot, is an international fugitive.

Goldman Sachs arranged $6.5 billion in bonds for the fund in 2012 and 2013, earning more than $600 million in fees. Roger Ng Chong Hwa, one of two former Goldman bankers charged in the U.S., was sentenced in March to 10 years in jail. His prison term was put on hold as Ng was repatriated to Kuala Lumpur over the weekend to help with 1MDB asset recovery efforts, officials said.

Tim Leissner, Ng’s former boss at Goldman Sachs, pleaded guilty in 2018 to bribing government officials in Malaysia and the United Arab Emirates. He was ordered to pay $43.7 million and became a key government witness during Ng’s two-month trial. He hasn’t been sentenced.