Malaysia open to settling 1MDB case against Abu Dhabi state fund

[KUALA LUMPUR] Malaysia is open to settling its legal battle with Abu Dhabi's state investment fund over 1MDB, just weeks after clinching a multibillion dollar deal with Goldman Sachs over the troubled state fund.

The country is willing to consider a settlement if International Petroleum Investment Company (IPIC) makes an offer that's in line with Malaysia's intent to retrieve assets and ensure justice is carried out, Attorney-General Idrus Harun said in a statement on Tuesday. For now, Malaysia hasn't dropped its proceedings against IPIC and talks are ongoing between the two countries, he added.

The government is challenging an arbitration award that requires it to pay US$5.78 billion (S$7.95 billion) to IPIC and the holders of certain 1MDB bonds, seeking to recover US$3.5 billion paid by 1MDB or reduce its liability to pay interest and principal under bonds jointly guaranteed by IPIC up to that same amount. In November, the country won a ruling at the London court to allow public hearings for the case.

Two years after Malaysia revived investigations into 1MDB, the country is starting to see a few of the proceedings reach some form of resolution.

Former premier Najib Razak was sentenced to 12 years in prison and a US$50 million fine last week after he was ruled guilty in a case linked to 1MDB. Malaysia struck a US$3.9 billion settlement with Goldman Sachs in July to resolve criminal charges against the US bank.

BLOOMBERG

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