BUSINESS

Goldman Sachs Vs Malaysia: Govt To Respond Accordingly, Safeguard Malaysians' Interest -- Johari Ghani

12/10/2023 02:25 PM

KUALA LUMPUR, Oct 12 (Bernama) -- The government will respond to Goldman Sachs’ filing for arbitration against Malaysia in the 1Malaysia Development Bhd (1MDB) settlement dispute in accordance with the established legal frameworks while ensuring that the interest of the Malaysian people is safeguarded.   

“The 1MDB Taskforce Committee is quite surprised at the conduct of Goldman Sachs as parties are still in the stage of good faith discussions to resolve any dispute amicably.

“However, in light of recent events, the government of Malaysia will be preparing to respond to this matter and ensuring that this process is done diligently and in accordance with the established legal frameworks while ensuring that the interest of the Malaysian people is safeguarded,” 1MDB Taskforce chairman (asset recovery) Datuk Seri Johari Abdul Ghani said in a statement in response to the news of the suit.

Bloomberg reported that Goldman Sachs Group Inc is suing Malaysia in a United Kingdom court amid festering disagreement over a settlement tied to its role in the 1MDB investment-fund scandal.

“We filed for arbitration against the government of Malaysia for violating its obligations to appropriately credit assets against the guarantee provided by Goldman Sachs in our settlement agreement and to recover other assets,” the report quoted a spokesman for the New York-based bank as saying.

Johari said Goldman Sachs’ action of initiating arbitration proceedings also appear to be an attempt to detract and divert attention away from the bank’s obligation to adhere to the interim payment of US$250 million (US$1=RM4.72) requirement under the settlement agreement.

 

Settlement agreement and deadline extensions

 

To ensure that the public is fully informed on the current situation, he provided the following sequence of events that have taken place regarding the Goldman Sachs settlement agreement:

The Goldman Sachs Settlement Agreement was signed on Aug 18, 2020, consisting of two parts -- cash payment of US$2.5 billion paid 10 days from signing of the settlement agreement; and asset recovery guarantee of US$1.4 billion by Goldman Sachs within five years from the date of the settlement agreement.

Under the asset recovery guarantee, if the Malaysian government did not recover the sum of US$500 million by Aug 18, 2022 (two years from the signing of the settlement agreement), Goldman Sachs would be required to pay US$250 million as interim payment to the government.

On Aug 18, 2022, the accounting provided by the government to Goldman Sachs showed that it had not recovered US$500 million and hence was entitled to the interim payment of US$250 million. This was disputed by Goldman Sachs.

The settlement agreement allowed parties to engage in amicable good faith discussions for the period of three months if a dispute relating to the settlement agreement arose. 

A separate extensions were granted by the Malaysian government to Goldman Sachs on expiry of the initial Aug 18, 2022 deadline to try and amicably settle this dispute.

Johari said the four extensions that were given are as follows:

(a) Goldman Sachs requested for extension of time of three months on Sept 8, 2022, and this extension

expired on Dec 8, 2022 (First extension);

(b) On Dec 8, 2022, a further extension was given and this extension expired on Feb 8, 2023

(Second extension);

(c) On Feb 8, 2023, another extension was given, and this expired on May 8, 2023 (Third extension); and

(d) The last extension was given on Aug 8, 2023, and this is set to expire on Nov 8, 2023

(Fourth extension).

Johari said if a settlement is not reached between the parties by the Nov 8, 2023 deadline, the government can begin arbitration proceedings in respect of the interim payment of US$250 million.

“At this juncture, and as mentioned above, parties are still considered to be in the amicable good faith discussions stage and therefore as an aggrieved party, the 1MDB Taskforce views Goldman Sachs’ initiation of arbitration proceedings as premature and without due consideration of necessary prerequisites,” he added.

-- BERNAMA


BERNAMA provides up-to-date authentic and comprehensive news and information which are disseminated via BERNAMA Wires; www.bernama.com; BERNAMA TV on Astro 502, unifi TV 631 and MYTV 121 channels and BERNAMA Radio on FM93.9 (Klang Valley), FM107.5 (Johor Bahru), FM107.9 (Kota Kinabalu) and FM100.9 (Kuching) frequencies.

Follow us on social media :
Facebook : @bernamaofficial, @bernamatv, @bernamaradio
Twitter : @bernama.com, @BernamaTV, @bernamaradio
Instagram : @bernamaofficial, @bernamatvofficial, @bernamaradioofficial
TikTok : @bernamaofficial

© 2024 BERNAMA   • Disclaimer   • Privacy Policy   • Security Policy