Malaysia is contemplating the initiation of legal proceedings against foreign banks implicated in the colossal 1Malaysia Development Berhad (1MDB) corruption scandal, as revealed by Johari Abdul Ghani, the chairman of the 1MDB asset recovery task force, on Tuesday.
Although Ghani refrained from disclosing the identities of the foreign banks involved, he asserted that they failed to execute proper due diligence procedures before facilitating fund transfers linked to the sovereign fund.
The 1MDB scandal, which has been a focal point for Malaysian and U.S. investigators, is estimated to involve the misappropriation of approximately $4.5 billion. Notably, the scandal has implicated key figures such as a former Malaysian prime minister, personnel from Goldman Sachs, and high-ranking officials in various jurisdictions as reported by Reuters.
In the pursuit of justice, Malaysia had taken legal action in 2021 by filing lawsuits against units of Deutsche Bank, JP Morgan, and Coutts & Co. These legal actions aimed to recover billions of dollars in alleged losses incurred by the 1MDB fund. However, as of now, the progress of these cases through the legal system remains pending.
Johari emphasized the unwavering commitment of the 1MDB task force to address the matter transparently and to hold all implicated parties accountable. In an official statement, he stated, "The 1MDB task force is firmly committed to addressing the 1MDB matter transparently and holding all parties accountable."
Furthermore, Johari provided insight into Malaysia's response to an arbitration request from Goldman Sachs on November 8. Currently, the two parties are in the process of reaching an agreement on a procedural timetable to facilitate the resolution of the issues at hand.
It is worth noting that in 2020, Goldman Sachs had already agreed to a substantial settlement of $3.9 billion to resolve Malaysia's criminal probe into its involvement in the 1MDB scandal.
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