LEGAL counsels appointed to facilitate settlement negotiations for 1Malaysia Development Bhd’s (1MDB) asset recovery were not remunerated based on commissions, said the firm’s board of directors. 

“These legal counsels are remunerated based on a pre-agreed time cost, and not based on commission or a percentage of the value of settlements, or assets recovered,” 1MDB’s board said in a statement today. 

The board said its priority is to recover assets linked to the embattled state strategic development fund. 

“As part of this process, a special task force has been established by the Finance Ministry (MoF), which includes representatives from 1MDB, the Attorney-General’s Chambers, the Securities Commission of Malaysia, Bank Negara Malaysia, police, the National Anti-Financial Crime Centre, the Malaysian Anti-Corruption Commission and the National Centre for Governance, Integrity and Anti-Corruption,” it said.

“The recovery process also involves the appointment of legal counsels to assist in 1MDB’s civil action and asset recovery efforts,” it added. 

Kuang assemblyman Sallehudin Amiruddin recently lodged a police report urging the authorities to investigate whether millions had been paid to a political party through a high-profile lawyer. 

Lawyer Rosli Dahlan then lodged a police report against Sallehudin, Umno’s Lokman Adam and blogger Mohd Hanizam Yunus for alleging he received billions of ringgit in kickbacks from Goldman Sachs in its 1MDB settlement. 

Whistle-blower website Sarawak Report also cited sources that 5% of the settlement with Goldman Sachs was awarded as commission to key negotiators appointed by the government. 

However, Bersatu’s information chief Wan Saiful Wan Jan had refuted the allegations, calling them another attempt by the opposition to slander the party and Muhyiddin. 

1MDB’s directors said the US$2.5 billion (RM10.4 billion) settlement cash received from Goldman Sachs has been deposited into the Asset Recovery Trust Account, which is under the custody of the Accountant-General’s Department.

“Recently, 1MDB also successfully reached a settlement with AMMB Holdings Berhad for RM2.83 billion and Deloitte for RM324 million. All proceeds from the 1MDB’s asset recovery efforts, including any future settlements, have been or will be deposited into the Trust Account,” it said. 

It said 1MDB still has an outstanding debt amounting to RM32.3 billion. 

This comprises debt instruments such as sukuk and bonds. 

Among them are, two US dollars denominated bonds with a value of US$3.5 billion (approximately RM14.7 billion) with coupon rates of 5.75% and 5.99% per annum, which will mature next year. 

Apart from that, it also has another bond with a value of US$3 billion and a coupon rate of 4.4% per annum, and will mature in 2023.  

The board said its last remaining debt is a RM5 billion sukuk with a profit rate of 5.75% per annum, which will mature in 2039.  

“Total of bonds or Sukuk principal and coupon or profit to be paid till maturity are RM40.51 billion,” it said. 

Nonetheless, the board said that 1MDB will continue its asset recovery efforts so that it will be able to pay its bond and sukuk holders once the debt instruments reach maturity. 

Goldman Sachs was investigated by regulators in at least 14 countries for its role in underwriting the 1MDB bond issues. 

The Wall Street titan collected about US$600 million in fees for its service in arranging three bond offerings by 1MDB in 2012 and 2013 to raise a total of US$6.5 billion. 

The MoF said in July the Malaysian government had reached a RM15.8 billion settlement with the investment banking giant for its role in the 1MDB affair. – March 26, 2021.