Malaysia set to let UAE off the 1MDB hook

SINGAPORE – When the Malaysian government announced a US$3.9 billion settlement deal with Goldman Sachs in July, Prime Minister Muhyiddin Yassin used the opportunity to reiterate his administration’s commitment to recovering assets linked to the sprawling multi-billion-dollar 1Malaysia Development Berhad (1MDB) scandal.

Prominent detractors, though, panned the deal, despite it paving the way for the largest yet recovery of pilfered state funds, with Goldman committing to a $2.5 billion cash payout and a guarantee to return at least $1.4 billion in assets linked to three bond transactions worth $6.5 billion that the US investment bank had structured and arranged for 1MDB.

Leaders of Malaysia’s previous Pakatan Harapan (PH) government, which oversaw charges brought against Goldman and its executives, have suggested that Malaysia was shortchanged in the settlement, which also saw pending criminal charges against the bank dropped. To critics, the outcome amounted to a veritable slap on the wrist.

Reports indicate that another such settlement is in the works, this time with an Abu Dhabi state investment fund over 1MDB-related transactions linked to a legal challenge filed by Malaysia in a London court. Observers say the settlement could lead to a smaller-than-expected payout without details of the controversial case ever being aired in an open court.

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