© Reuters. FILE PHOTO: A construction worker talks on the phone in front of a 1Malaysia Development Berhad (1MDB) billboard at the Tun Razak Exchange development in Kuala Lumpur, Malaysia, February 3, 2016. REUTERS/Olivia Harris/File Photo
KUALA LUMPUR (Reuters) – A Malaysian government task force said on Thursday it viewed Goldman Sachs’ filing of arbitration proceedings as premature, after the firm sued Malaysia in a British court this week amid an escalating dispute over a 2020 settlement deal.
Goldman Sachs in 2020 had agreed to pay $3.9 billion to settle Malaysia’s criminal probe over its role in the multi-billion dollar 1MDB corruption scandal.
But the parties are now in disagreement over the deal, which includes a stipulation for Goldman to make an interim payment if Malaysia did not recover at least $500 million from the firm by August 2022.
Malayia’s 1MDB task force said Goldman Sachs had requested several extensions to a deadline for discussions to settle the dispute. The latest deadline is Nov. 8.
“At this juncture… parties are still considered to be in the amicable good faith discussions stage and therefore as an aggrieved party, the 1MDB Taskforce views Goldman Sachs’ initiation of arbitration proceedings as premature and without due consideration of necessary prerequisites,” 1MDB task force chairman Johari Abdul Ghani said in a statement.
Johari accused Goldman of trying to distract from the interim payment, and said the Malaysian government would respond to the matter accordingly.
Goldman Sachs lodged its suit less than two months after Malaysian Prime Minister Anwar Ibrahim threatened to take the company to court.
Malaysian and U.S. authorities estimate some $4.5 billion were stolen from 1MDB between 2009 and 2014, in a globe-spanning scheme that implicated high-level government and banking officials in Malaysia and elsewhere.
Goldman had helped 1MDB raise $6.5 billion in two bond offerings, earning itself $600 million in fees, according to the U.S. Justice Department.
(This story has been corrected to show that Goldman Sachs had requested extensions to previous deadlines and the current deadline for discussions is set to expire on Nov. 8, in paragraph 4)
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