Malaysia Govt & 1MDB File $5.6 Billion Lawsuit Against 44 Partners of KPMG for Audit Breaches and Negligence
12th July 2021 | Singapore
The Malaysian Government and 1MDB has filed lawsuit against 44 individual partners of KPMG PLT on the 6th July 2021, claiming damages of more than $5.6 billion for breaches and negligence of audit works performed by KPMG between 2010 to 2012. 1MDB was Malaysia’s sovereign wealth fund, of which around $4.5 billion was stolen from the fund and with the fund saddled with more than $11 billion of debts.
“ Malaysia Govt & 1MDB File $5.6 Billion Lawsuit Against 44 Partners of KPMG PLT “
The Malaysia $5.6 Billion Lawsuit against 44 Partners of KPMG
The plaintiffs filing the $5.6 billion lawsuit against KPMG PLT are the Government of Malaysia, Minister of Finance (MoF), 1Malaysia Development Bhd (1MDB) and four other subsidiaries of 1MDB.
“The claim is related to the 1MDB audit works performed by KPMG for the years 2010 to 2012. As the matter is already before the court, MoF is unable to make further comments in observing the rule of sub judice.”
Malaysia 1MDB
Founded in 2009 shortly after Najib Razak became Malaysia’s Prime Minister, 1MDB (1Malaysia Development Bhd) was set up as a sovereign investment fund to finance infrastructure projects and related economic projects to spur economic growth in Malaysia.
It became a political and financial scandal as the key businessman Jho Low who is believed to have masterminded the plan, had diverted the 1MDB funds to fund his personal and associates’ lifestyle, including making the Hollywood movie: Wolf of Wall Street, buying a $250 million yacht (Equanimity) and $35 million Bombardier private jet, giving lavish gifts to Victoria secret model Miranda Kerr and Hilton hotel heiress Paris Hilton, investing in luxury real estates, paintings and many more.
Goldman Sachs $6.5 billion Bonds Underwriting
In July 2020, Goldman Sachs agreed to pay $3.9 billion to the Government of Malaysia to resolve all 1MDB criminal and regulatory proceedings. The in-principle agreement to pay $3.9 billion to the Government of Malaysia, comprises of $2.5 billion direct payment and a further guarantee of at least $1.4 billion of assets that had been seized by governments worldwide.
With the $3.9 billion settlement, the Government of Malaysia will withdraw all criminal charges and no further charges will be brought against Goldman Sachs, its subsidiaries, or any of their employees, except for former employees Tim Leissner and Roger Ng.
This in-principle agreement settles Malaysia’s probe of Goldman Sachs role in raising $6.5 billion through 3 bond sales for 1MDB between 2012 and 2013. The $6.5 billion bond sales was led by Tim Leissner, who was Goldman Sachs Southeast Asia Chairman. The leading American investment bank received $600 million in fees, representing more than 9% of the transaction. The more than 9% underwriting fee of the $6.5 billion bond sales paid to Goldman Sachs is unusually high in investment banking, with fees generally decreasing as the deal size gets larger.
Malaysia AmBank Group to Pay $700 Million
In March 2021, AMMB Holdings (AmBank Group) agreed to a $700 million (MYR 2.83 billion) global settlement for AmBank Group’s involvement in Malaysia’s sovereign wealth fund 1MDB.
The $700 million (MYR 2.83 billion) settlement amount is in addition to the $13.2 million (MYR 53.7 million) penalty already imposed by Bank Negara Malaysia (BNM) and paid by the AmBank Group.
Former Prime Minister of Malaysia Najib Razak Faces Bankruptcy Notice for $408 Million in Unpaid Taxes
In April 2021, former Prime Minister of Malaysia from 2009 to 2018, was served with a bankruptcy notice for failing to pay $408 million (MYR 1.69 billion) in unpaid taxes.
Najib Razak is currently facing corruption and money laundering charges over suspected theft of billions of dollars from 1MDB.
In a Facebook post on 6th April 2021, Najib Razak commented (In Malay Language) that the bankruptcy notice is an attempt to destroy his political career. If declared bankrupt, he will not be able to have an official role in politics, would lose his seat as a member of parliament and not stand as an election candidate in future elections.
Malaysia Sues JP Morgan, Deutsche and Coutts for $2.93 Billion, Receives $452 Million from United States
In May 2021, the Malaysia Government filed a combined 22 civil suits to recover $23 billion of assets, including $2.93 billion from JP Morgan ($800 million), Deutsche Bank ($1.1 billion) and Coutts ($1.03 billion).
Malaysia’s Ministry of Finance also announced receiving $452 million into Malaysia’s Assets Recovery Trust Account from the United States Department of Justice (DOJ), for funds seized related to the 1Malaysia Development Berhad (1MDB).
1MDB Recovered Funds, $3.97 Billion
In June 2021, the Malaysia Government has received $80 million of 1MDB seized funds from Deloitte PLT, with a total of $3.97 billion (MYR 16.386 billion) seized and repatriated 1MDB funds received to-date.
The recovered funds deposited into Malaysia’s Assets Recovery Trust Account under the custody of the Accountant General’s Department of Malaysia, will be used to repay and service 1MDB and SRC’s remaining debts. The total of $3.97 billion (MYR 16.386 billion) seized and repatriated 1MDB funds to-date, excludes the $700 million (MYR 2.83 billion).
[To date, the Government has repaid RM12.54 billion of 1MDB’s debt and RM3.1 billion of SRC’s debt. The balance of debt still outstanding, comprising the principal and coupon/ profit/ interest of bonds, Sukuk and term loans, currently total RM39.66 billion (1MDB) and RM2.57 billion (SRC).]
Related:
- Malaysia Government Receives $80 Million 1MDB Seized Funds from Deloitte, $3.97 Billion Recovered
- Malaysia Sues JP Morgan, Deutsche and Coutts for $2.93 Billion, Receives $452 Million from United States
- Former Prime Minister of Malaysia Najib Razak Faces Bankruptcy Notice for $408 Million in Unpaid Taxes
- Goldman Sachs to Pay $3.9 Billion to Malaysia to Resolve 1MDB Criminal and Regulatory Proceedings
- Malaysia AmBank Group to Pay $700 Million for all 1MDB Claims to Malaysia Government
- Indonesia President Jokowi Targets $200 Billion Sovereign Wealth Fund
- 33 Chinese Entities Blacklisted by US Commerce Department
- Chinese Government Directs Alibaba to Sell or Reduce Media Assets, Including SCMP
- Ant Group $300 Billion Record IPO Suspended in both Shanghai and Hong Kong Exchange
- United States SEC Gives Record $114 million to a Single Whistleblower
Fines:
- Nomura, UBS and Unicredit Fined $451 Million for Rigging European Bond Prices
- United States SEC Gives Record $114 million to a Single Whistleblower
- Ant Group $300 Billion Record IPO Suspended in both Shanghai and Hong Kong Exchange
- United States SEC Fines Under Armour $9 Million for Misleading Investors on Revenue Growth in 2015
- Alibaba Fined $2.78 Billion by China State Regulator for Anti-Monopoly Practices
More:
- Julius Baer Reaches $79.7 Million Settlement for Role in FIFA Corruption Events
- Malaysia Sues JP Morgan, Deutsche and Coutts for $2.93 Billion, Receives $452 Million from United States
- Credit Suisse, UBS, Nomura, MUFJ and Morgan Stanley Losses for Archegos Family Office Nears $10 Billion
- Malaysia AmBank Group to Pay $700 Million for all 1MDB Claims to Malaysia Government
- Goldman Sachs to Pay $3.9 Billion to Malaysia to Resolve 1MDB Criminal and Regulatory Proceedings
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