By Stan Lee, Politics Now!
KUALA LUMPUR (Politics Now!) - It looks like Johari Ghani, regarded by many in his Umno party as a prime minister-in-waiting and speculated to take over Prime Minister Anwar Ibrahim's finance ministry portfolio, may have caught a potato hotter than he can hold.
Now the head of the special taskforce formed to recover 1MDB assets, Johari seemed a bit shell-shocked by Goldman Sach's move to turn the tables and haul Malaysia to court over a settlement controversially struck by previous premier Muhyiddin Yassin in 2020.
Just as surprised it appeared was Anwar, who had threatened to sue the powerful U.S. bank, as well as the Attorney-General's chamber, as neither have responded to media requests for comments.
"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," Johari was reported as saying by Malaysiakini.
WHAT SORT OF SETTLEMENT DID MUHYIDDIN STRIKE?
In 2018, the Malaysian government led by Dr Mahathir Mohamad had filed a suit to seek US$3.3 billion from Goldman Sachs over its role in the 1MDB affair.During the Najib administration which ended in 2018, Goldman Sachs had arranged three bonds worth US$6.5 billion for 1MDB but most of the funds were pilfered. The disgraced Najib is now behind bars over a breach of trust case and is also facing a trial involving corruption at 1MDB.
Following the ouster of the Mahathir-led government in 2020, Muhyiddin's administration struck a deal with Goldman on Aug 18, 2020, where Goldman agreed to pay US$2.5 billion within 10 days and guarantee US$1.4 billion for an asset recovery programme.
Johari said under the Muhyiddin settlement, if Malaysia did not recover US$500 million in assets by Aug 18, 2022, Goldman would have to pay US$250 million as interim payment.
"On Aug 18, 2022, the accounting provided by the government of Malaysia to Goldman Sachs showed that it had not recovered US$500 million and hence the government of Malaysia is entitled to the interim payment of US$250 million.
"This was disputed by Goldman Sachs," said Johari,
According to Johari, who is also Member of Parliament for Titiwangsa, said the Malaysian authorities had then agreed to extend the deadline four times. Each extension was for a three-month period and the latest and fourth extension was set to expire on Nov 8, he added.
WHILE NAJIB CLAIMS INNOCENCE - GOLDMAN ALREADY FINED BY MULTIPLE NATIONS
Goldman has been taken to court by several jurisdictions over the 1MDB debacle. The company has paid fines or settlements to Hong Kong, Singapore and the US, among others.On Wednesday, Goldman filed for arbitration at the London Court of International Arbitration.
“Today (yesterday), 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,” Reuters reported an unnamed spokesperson as saying.
Both sides were embroiled in a dispute over a 2020 settlement agreement, whereby Goldman had agreed to pay US$3.9 billion (RM18.41 billion) to settle Malaysia’s criminal investigation over its role in the affair.
In a regulatory filing earlier this year, Goldman said it was also required to make a one-time interim payment of US$250 million if the Malaysian government had not received at least US$500 million in assets and proceeds by August last year.
The U.S. lender also said there were disputes over Malaysia's claim it had not recovered at least US$500 million as of August 2022, and as such whether any interim payment was due.
Malaysian and United States (US) authorities estimated US$4.5 billion was embezzled from Malaysia’s sovereign wealth fund 1MDB in an elaborate global scheme that implicated high-level officials in the fund.
It was reported that prosecutors have said Goldman helped 1MDB raise US$6.5 billion through bond sales and earned US$600 million in fees. - Written and edited by Stan Lee, Politics Now!
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