Goldman Sachs arbitration move may ‘backfire’ on Muhyiddin, report claims
CNA cites Roger Ng’s repatriation and ‘raids’ conducted by MACC as favourable ‘breakthroughs’ for the government.
(FMT) – The move by Goldman Sachs to commence arbitration proceedings against the government in London may backfire on Muhyiddin Yassin, a CNA report has claimed.
On Wednesday, Bloomberg reported that the New York-based investment bank was suing the Malaysian government in a UK arbitration court following “festering disagreement” over a settlement entered when the former prime minister was in power to resolve 1MDB’s US$6.5 billion bond saga.
That suit may trigger the current government, led by Prime Minister Anwar Ibrahim, to declassify the agreement as an official secret, the CNA report claimed, following “growing sentiment” within Anwar’s administration that its terms were unfavourable to the country.
It may also “reopen potentially embarrassing dealings by the bank in the affair, including how it reached the settlement deal” with Muhyiddin’s administration.
The report said the government has been encouraged by several “breakthroughs” made surrounding the 1MDB fiasco which may have a favourable impact on its position in relation to the dispute with Goldman Sachs.
It said former Goldman Sachs banker Roger Ng, who returned to Malaysia on Sunday following a deal struck with the US authorities, has pledged to provide the government with “previously undisclosed information” relating to 1MDB.
In March, Ng was sentenced by a New York court to 10 years in prison following a conviction for his role in the scandal.
Another development cited by CNA was an alleged “raid” conducted by the Malaysian Anti-Corruption Commission (MACC) on a law firm connected to Muhyiddin.
On Saturday, FMT reported that MACC officers had “visited” the offices of Rosli Dahlan Saravana as part of an undisclosed investigation, but that no documents were seized.
The firm’s lead partner, Rosli Dahlan, was involved in negotiations which led to the settlement agreement inked with Goldman Sachs on Aug 18, 2020. He also acts for Muhyiddin in several legal matters, including in ongoing criminal charges brought against the former prime minister on allegations of money laundering.
“The push to bring the dispute into an arbitration in the London courts could reopen potentially embarrassing dealings by the bank in the affair, including how it reached the settlement deal with Muhyiddin,” the report said.
In December 2018, the government, then led by former prime minister Dr Mahathir Mohamad, announced that Malaysia intended to seek US$7.5 billion in reparations from Goldman Sachs over the controversial bond deal arranged by the bank in 2012 and 2013.
The deal was meant to raise US$6.5 billion for the country but saw substantial funds siphoned out in an elaborate scheme. It has also cost the government US$3.2 billion in interest payments to bondholders.
In a statement issued yesterday, 1MDB task force chairman Johari Ghani described the suit as “premature”, but said the government will take all necessary action to defend it.
He said that under the terms of the settlement, Goldman Sachs was obliged to make an interim payment of US$250 million in August 2022 after failing to secure the recovery of assets worth US$500 million within two years of the agreement.
Johari also said the bank had acted “without due consideration of the necessary prerequisites”, as the parties were still in “amicable good faith” discussions, which had been extended at Goldman Sachs’s request to Nov 8.