Malaysia reached a $1.8 billion settlement with International Petroleum Investment Co. and Aabar Investments PJS to end a legal dispute linked to the multi-billion scandal involving the southeast Asian nation’s 1Malaysia Development Bhd.
(Bloomberg) — Malaysia reached a $1.8 billion settlement with International Petroleum Investment Co. and Aabar Investments PJS to end a legal dispute linked to the multi-billion scandal involving the southeast Asian nation’s 1Malaysia Development Bhd.
The two sides have been locked in proceedings at a London’s court, with Malaysia claiming that the Abu Dhabi entities — which have since been rolled into Mubadala Investment Co. — were aware of fraud allegations against former Prime Minister Najib Razak at the time the deal was struck.
“With this settlement, Malaysia and Abu Dhabi look forward to continue working together for the prosperity and economic benefit of both countries in the future,” the Finance Ministry said in the statement Monday.
1Malaysia Development Bhd., or 1MDB, was an investment fund intended to develop the nation’s economy. Instead, it became the focus of a scandal that spawned probes in Asia, the US and Europe. Much of the money was allegedly embezzled by people connected to Najib and diverted for bribes.
Both Aabar and IPIC had gotten caught up in a series of investigations over whether and how money flowed from 1MDB development company through fraudulent shell companies to corrupt officials.
Royal Pardon
Najib was convicted and jailed in Malaysia for corruption last year. The Federal Court is currently hearing his review bid to overturn his conviction. Najib has applied for a royal pardon, but remains on trial in four other cases, each carrying prison terms and hefty financial penalties.
The London case is one of a series of legal and regulatory probes around the world, including the US and Malaysia, surrounding 1MDB.
In 2021, Malaysia received a settlement payment of 333 million ringgit ($74 million) from KPMG, and 324 million ringgit from Deloitte PLT, related to their roles in auditing the state investment fund and its former unit SRC International. The country had 18.2 billion ringgit in 1MDB debt left to pay off at the end of 2022, according to the finance ministry.
Goldman Sachs Group Inc. in 2020 admitted its role in the biggest foreign bribery case in US enforcement history, reaching multiple international settlements in the billions of dollars to end probes into its fundraising for 1MDB.
(Updates with details throughout)
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