KUALA LUMPUR: Former second finance minister Datuk Seri Johari Abdul Ghani has accused Goldman Sachs of taking advantage of poor negotiation by former prime minister Tan Sri Muhyiddin Yassin's government to delay payment of a substantial sum still owed to Putrajaya under a settlement agreement entered more than two years ago.
"(Goldman Sachs) should repay in cash the remaining US$1.4 billion (RM6 billion) of 1MDB losses without quibbling, and straight away," he was quoted as saying to a Thomson Reuters Regulatory Intelligence report.
According to the report, the agreement between the US investment bank and Muhyiddin's government anticipates that Malaysia would receive that sum in 1Malaysia Development Bhd (1MDB) assets by 2025 as part of a US$3.9 billion (RM16.77 billion) settlement reached over losses incurred by the debt-laden state fund.
Reuters quoted an unnamed government law officer saying this was a bad deal for the country.
"(The government) should have demanded cash in the bank, not assets. They have lost the initiative.
"There must be a question about how the government made the agreement. This is a dispute which can only be resolved by (its) publication," he was quoted as saying.
The officer also called on the government to publish the terms of the settlement agreement, which has so far been withheld from disclosure allegedly due to a confidentiality provision which prohibits its release.
According to reports, the dispute between the bank and Putrajaya centres on the valuation of 1MDB assets and Malaysia's apparent unwillingness to pursue foreign assets identified by Goldman Sachs as related to 1MDB.
One aspect of the dispute relates to a provision in the agreement by which the bank guaranteed that Putrajaya would receive US$500 million (RM2.15 billion) worth of 1MDB assets by August last year.
If that was not achieved, Goldman Sachs was obliged to pay the government an interim payment of US$250 million.
However, that payment has not happened, with Goldman Sachs and the government at loggerheads over the value of the identified assets. Putrajaya says those assets are only worth US$420 million (RM1.8 billion).
Goldman Sachs, however, disputes this, arguing that the Malaysian government has "unilaterally reduced" the value of the assets by US$80 million (RM344 million).
The bank also claims the government has refused to include other substantial assets when tabulating the recovered proceeds.
"Goldman Sachs thinks Malaysia has received US$500 million, and (the government is) saying no," a source close to the bank was quoted as saying.
The bank also alleges that Malaysia has not rigorously pursued the recovery of assets linked to 1MDB.
"You have to take steps to make that happen. It doesn't happen passively," the source was quoted as saying, adding that Malaysia has not been 'proactive' in pursuing the recovery.
Two weeks ago, Prime Minister Anwar Ibrahim demanded that Goldman Sachs honour its settlement with the government for its role in the 1MDB scandal, saying the bank should not use its financial strength to dictate terms.
In an interview with Bloomberg Television's Haslinda Amin, Anwar called on Goldman Sachs to resolve the dispute over the settlement agreement inked in July 2020 once and for all with Malaysia.