Report: Malaysia to seek settlement with Abu Dhabi over 1MDB issue

The Straits Times today reported that Foreign Minister Hishammuddin Hussein will lead a special government task force to Dubai this week. — Bernama pic
The Straits Times today reported that Foreign Minister Hishammuddin Hussein will lead a special government task force to Dubai this week. — Bernama pic

KUALA LUMPUR, Aug 24 — Prime Minister Tan Sri Muhyiddin Yassin is set to reopen talks with Abu Dhabi to resolve disputes over the 1Malaysia Development Berhad (1MDB) case, in a bid to mend strained bilateral ties. 

The Straits Times today reported that Foreign Minister Hishammuddin Hussein will lead a special government task force to Dubai this week. 

According to lawyers close to the matter, the task-force will seek a compromise to a legal challenge filed by Malaysia in a London court over the validity of an arbitration award that favoured state-owned entities of Abu Dhabi that had dealings with 1MDB. 

The report said the Malaysian government’s sudden initiative for a settlement with Abu Dhabi comes just weeks after Kuala Lumpur secured a multi-billion-dollar deal with the Goldman Sachs Group over numerous 1MDB-related transactions.

Malaysia received US$3.9 billion in the form of cash and guarantees from the US financial institution, in exchange for the country dropping charges against the bank.

However, financial executives and lawyers familiar with the situation, told the Singapore daily that the deal would be more complex with Abu Dhabi as the many sensitive aspects of the dispute that would require major concessions from both governments. 

A former government official, who was directly involved in the 1MDB saga, told the paper that any settlement will be political as both sides will not make any admission to guilt. 

Malaysia and Abu Dhabi forged close ties during the premiership of Datuk Seri Najib Razak, who founded 1MDB shortly after coming to power in April 2009. 

State-owned corporations controlled by Abu Dhabi, such as the International Petroleum Investment Company (Ipic), soon began forging deals with their Malaysian counterparts.

In 2012, Ipic guaranteed US$3.5 billion of 1MDB bonds but that arrangement turned into a debt payment dispute between the two governments. 

Ipic later sued 1MDB for defaulting on its debt obligations and both parties reached a settlement after the dispute went into arbitration in London.

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