KUALA LUMPUR: Malaysia can consider initiating legal action against foreign banks that do not carry out the Know Your Customer (KYC) process thoroughly, leading to the diversion of funds related to 1Malaysia Development Bhd (1MDB) fund into other accounts.
This, 1MDB task force chairman Datuk Seri Johari Abdul Ghani said was as seven to eight international banks were facilitating such transactions in several countries that have been identified with cash inflow from the scandal.
"If we look at it, we may initiate legal action against foreign banks that facilitate fund transfers by not using the proper KYC processes.
"(And) if we sue any bank in foreign countries with these money flows and they want to fight it, we will fight (back). Usually from what I see, it is not a significant amount and we can consider settling outside the court.
"These banks also do not want their names associated (with the 1MDB scandal)," he said during a special interview 'Special Narrative Special: Optimising the Country's Agri-Commodity Output' aired on RTM, last night.
Johari, who is also the Plantation and Commodities Minister, however, said the legal action was the second phase considering the current first phase of the scandal was to obtain as much money possible from the settlement agreement with Goldman Sachs.
The bank has also guaranteed a return of USD1.4 billion in assets seized by authorities worldwide related to 1MDB.
"We have reached a significant recovery stage from Goldman Sachs. We have a slight dispute because the company does not want to pay the USD1.4 billion. Despite giving extensions four times, they refuse to pay, so we have to face arbitration.
"This arbitration will require us to go to trial and see the outcome later," he said.
Recently, it was reported that the Goldman Sachs Group filed a counterclaim against Malaysia in the International Court of Arbitration in London (LCIA), alleging a breach of its obligations to properly credit assets against the guarantees provided by Goldman Sachs in their settlement agreement and to recover other assets.