AMMB Holdings Bhd’s settlement with the Finance Ministry over the bank’s role in the 1MDB scandal appeared to be a rushed deal that let the wrongdoers off scot-free, said a corporate governance advocate.

Lya Rahman told Focus Malaysia the settlement deal seemed to be “a last-minute decision” that would negatively affect the bank’s minority shareholders.

“Shouldn’t those responsible be taken to task, especially the board members at that time?” said the activist.

“What about the key executives who were also involved in this scandal? Would this trigger the malus arrangement for reward remuneration paid to them?”

She said it was disappointing to see this happen at Ambank, which is highly ranked for corporate governance.

“At the end of day, the real victims are the minority shareholders,” she said.

Shareholders had been shocked to learn that seven key bank personnel had disposed of large chunks of shares just before the 1MDB settlement was announced.

The news had raised concerns of insider trading.

“If insider trading was indeed committed, such action does not only breach the Capital Markets and Services Act 2007 but also does gross injustice to the minority shareholders,” Lya said.

On February 26, the Finance Ministry announced it had reached a RM2.83 billion settlement with AMMB in its efforts to recover funds and assets linked to the defrauding of the investment fund.

Ambank Group will pay the settlement in addition to a RM53.7 million penalty imposed by Bank Negara.

The Finance Ministry stated that the terms of the settlement were in compliance with the Securities Commission’s (SC) laws and guidelines.

The SC will require AmInvestment Bank Bhd to take corrective measures, including putting in place systems and processes to strengthen its due diligence framework, as part of the settlement terms.

This follows Goldman Sachs’ RM15.8 billion settlement payment to the government to settle all claims in relation to  the Wall Street titan’s role in the 1MDB. affair – March 13, 2021.