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Malaysia's 1MDB files suits to recover $23 billion
"Following significant and successful settlements with Goldman Sachs, AmBank Group and Deloitte, the government's recovery efforts are now focused on pursuing other wrongdoers who have caused losses to 1MDB and/or SRC during the execution of their duties, as parties directly or indirectly involved in 1MDB and/or SRC's various operations and transactions," Finance Minister Zafrul Abdul Aziz said in a statement.
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Riza Aziz (left) and Malaysian financier Jho Low have been named by the United States Justice Department in a civil-forfeiture suit. (South China Morning Post via The Straits Times/-)
T
he scandal-ridden state fund 1Malaysia Development Berhad and its sister company SRC International have filed 22 civil suits against a host of entities and individuals in the hope of recovering assets worth $23 billion, the Malaysian Finance Ministry said Monday.
"Following significant and successful settlements with Goldman Sachs, AmBank Group and Deloitte, the government's recovery efforts are now focused on pursuing other wrongdoers who have caused losses to 1MDB and/or SRC during the execution of their duties, as parties directly or indirectly involved in 1MDB and/or SRC's various operations and transactions," Finance Minister Zafrul Abdul Aziz said in a statement.
1MDB filed six suits against nine entities and 25 individuals, while SRC filed 16 suits against 15 individuals and eight entities for various wrongdoings, including fraud and breach of trust.
The ministry's statement did not identify the defendants. However, The Edge, a local business daily, reported that among them are foreign lenders like Deutsche Banks (Malaysia), JP Morgan (Switzerland) and Coutts & Co.
The three financial institutions are named in a suit together with energy firms PetroSaudi International and PetroSaudi Holdings (Cayman), as well as PetroSaudi co-founder Tarek Obaid and director Patrick Mahoney.
PetroSaudi had entered into a joint venture with 1MDB in 2009 to undertake oil exploration and production, but nothing materialized. Instead, hundreds of millions of dollars were siphoned off into accounts linked to alleged mastermind Low Taek Jho.
Low, his father and sister and former Prime Minister Najib Abdul Razak, who established 1MBD in 2009, were among the individuals named in the 22 civil suits that were filed last Friday.
Low and Najib separately face a series of criminal charges.
Malaysia had in August received $2.5 billion from Goldman Sachs, the Finance Ministry said in the statement, as part of a settlement in exchange for the government dropping all criminal charges against the US investment banking giant over the $6.5 billion it raised through bond sales that saw the bank receiving $600 million in fees, deemed way above the industry norm.
Goldman Sachs also agreed to an asset recovery guarantee of $1.4 billion.
Besides Goldman Sachs, the government also reached a 2.83 billion ringgit ($689 million) settlement with local lender Ambank Group and $80 million with audit firm Deloitte PLT.
"As previously mentioned, the government will not rest until all those involved are made fully accountable for the wrongdoings caused to the country through their involvement in 1MDB and/or SRC," Zafrul said.
The US government, investigating 1MDB for fraud and money laundering, estimates that some $4.5 billion was misappropriated from the state fund. The billions were allegedly used to buy luxury properties, yachts and paintings, and even to finance the Hollywood movie "The Wolf of Wall Street."
