© Reuters. Men walk past a 1 Malaysia Development Berhad (1MDB) billboard at the funds flagship Tun Razak Exchange development in Kuala Lumpur March 1, 2015. REUTERS/Olivia Harris/ File Photo
(Reuters) – Goldman Sachs Group (NYSE:) is suing Malaysia in a UK court, a source familiar with the matter told Reuters, as tensions escalate over a settlement linked to its role in the 1MDB investment-fund scandal.
The arbitration has been filed with the London Court of International Arbitration (LCIA), the source said.
“Today, we filed for arbitration against the Government of Malaysia for violating its obligations to appropriately credit assets against the guarantee provided by Goldman Sachs in our settlement agreement and to recover other assets,” a spokesperson for the bank told Reuters.
In 2020, Goldman Sachs had agreed to pay $3.9 billion to settle Malaysia’s criminal probe over the U.S. investment bank’s role in the multibillion-dollar 1MDB scandal.
Malaysian and U.S. authorities estimated $4.5 billion was stolen from 1MDB in an elaborate scheme that spanned the globe and implicated high-level officials in the fund, former Malaysian Prime Minister Najib Razak, Goldman staff and others.
Prosecutors have said Goldman helped sovereign wealth fund 1MDB raise $6.5 billion through three bond sales, but that $4.5 billion was diverted to government officials, bankers and their associates through bribes and kickbacks between 2009 and 2015.
The United States has been returning funds it has recovered from seized assets that were allegedly bought with stolen 1MDB money.
The LCIA lawsuit was earlier reported by Bloomberg News.
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