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Analysis: Malaysia’s spat with Goldman Sachs over 1MDB settlement deal could get ugly soon

SINGAPORE: The latest twist in the ongoing scandal at 1Malaysia Development Bhd (1MDB) is showing signs of turning into a political fiasco that could seriously singe former premier Muhyiddin Yassin and US banking giant Goldman Sachs — if details of a controversial settlement deal between them are revealed.

On Thursday (Oct 12), the US financial giant said it was taking Prime Minister Anwar Ibrahim’s government to court in London for violating key elements of the US$3.9 billion (S$5.3 billion) settlement agreement that it signed in August 2020 with the Muhyiddin administration. 

The deal was classified under Malaysia’s tough Official Secrets Act.

But now, Goldman Sachs’ push to force Malaysia into arbitration in the London courts is forcing Kuala Lumpur to consider declassifying the confidential settlement agreement, said a senior government official, who is advising Mr Anwar on the asset recovery campaign.

“Malaysia has strictly followed provisions in the agreement, even in the event of handling disputes. Goldman Sachs is not,” the official, who declined to be named, told CNA.

He noted that there is a growing sentiment in the Anwar government for the agreement to be made public stemming from widely held perceptions of the settlement being paltry compared to losses suffered by the country.


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The move by the global investment bank comes on the heels of a couple of key breakthroughs achieved by Anwar’s administration in turning up the heat on its campaign to pressure Goldman Sachs to willingly cough up a significantly higher settlement amount compared to the deal it reached with the Muhyiddin administration. 

Late last week, Kuala Lumpur won a hard-fought custody battle with the US government for Roger Ng Chong Hwa, a convicted former senior Goldman Sachs employee whom the Anwar administration officials told CNA has pledged to provide previously undisclosed information related to the role Goldman Sachs played in US$6.5 billion 1MDB bond scandal. 

Two days before Ng returned from New York under tight security on Oct 8, officials from the Malaysian Anti-Corruption Commission (MACC) raided the law offices of Rosli Dahlan Sarvana, whose senior partner Rosli Dahlan was the Muhyiddin government’s chief legal advisor in the 2020 settlement with Goldman Sachs.

At least three sources close to the situation, including government officials, have told CNA that the MACC raid was directly related to ongoing money laundering and corruption investigations into the 1MDB affair.


Making the agreement public could have serious political ramifications, particularly for Mr Muhyiddin and parties directly involved in the Goldman Sachs settlement because it has long been attacked by government officials, including Mr Anwar, as poorly negotiated. 

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