Malaysia’s Anwar vows to restore Goldman 1MDB settlement, warns of lawsuits

Malaysia’s then opposition leader Anwar Ibrahim leaves after meeting with Malaysia’s king at the National Palace in Kuala Lumpur on November 22, 2022.

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Malaysian Prime Minister Anwar Ibrahim has vowed to recover money owed to Malaysians from the 1MDB money laundering scandal and has not ruled out a lawsuit against Goldman Sachs.

“We will have to reopen these talks with Goldman Sachs because they were complicit,” Anwar told CNBC’s Martin Soong in an exclusive interview Friday at the prime minister’s office in Putrajaya, south of the capital Kuala Lumpur.

“Unfortunately, they were not so open. Therefore, we will have no choice but to continue this,” he added.

“Why should I punish the Malaysian people by forcing them to pay half of their income? I’m not just saying that we should negotiate. He should come back,” Anwar said. “I do not exclude the possibility of resumption, lawsuits (issues).”

Anwar Ibrahim says that Malaysia is not considering the possibility of lawsuits against Goldman Sachs.

As I always say, you attacked me, I can forgive you; you arrested me, I forgave you; but you are stealing from the people, I will have to take it back.

Anwar Ibrahim

Prime Minister of Malaysia

In an interview to be broadcast on The CNBC Conversation later this week, Anwar praised Malaysian agencies for recovering up to 68% of the total amount that escaped during the 1MDB crisis. He called it an “impressive feat,” but said he “didn’t stop there.”

Anwar said the Malaysian agencies were still in talks with Goldman Sachs, although ongoing discussions were “a bit complicated”. He admitted that the lawsuits in the US would cost “us a fortune” because there were “other paths to take”.

Asked to comment on Anwar’s interview, Goldman Sachs referred CNBC to its second-quarter earnings release.

As part of the $3.9 billion settlement between Malaysia and the bank, Goldman agreed to pay $2.5 billion in cash and guarantee the return of at least $1.4 billion in proceeds from seized assets linked to the 1MDB scandal.

“In connection with this provision, the firm is required to make a one-time interim payment of $250 million against $1.4 billion if the Malaysian government does not acquire at least $500 million in assets and revenue by August 2022,” the bank said. highlighted in the income statement.

The two sides disagree on whether the Malaysian government should recover at least $500 million owed by August last year and whether an interim payment is due.

“If the parties are unable to resolve this dispute, it will be resolved through arbitration,” Goldman told CNBC.

It remains to be seen what will emerge from the standoff between Malaysia and Goldman Sachs. The bank is required to return at least $1.4 billion in recovered assets to Malaysia by August 2025.

“No one can deny that Goldman Sachs was used, partly using authorities,” Anwar said in an interview. “So we’re talking about governance, and it’s only fair that these western countries — the U.S. talks about democratic accountability, the rule of law — support our efforts to get (the money) back.”

“Like I always say, you attacked me, I can forgive you; you put me in jail, I forgive you; but you’re stealing from the people, I’m going to have to take it back,” he said.

He was referring to his own experience of being controversially convicted of sodomy under recently repealed laws.

Anwar previously served two prison terms, was beaten in prison by the then deputy chief of police and later received a royal pardon – all after being sacked as deputy prime minister and successor to Malaysia’s longest-serving prime minister in 1998. Mahathir Mohamad.

Reform mandate

Anwar is seeking to deepen his reform agenda after state elections this month, where his ruling coalition was able to hold on to control of three states.

In a remarkable political U-turn, the Malaysian king appointed Anwar as Malaysia’s 10th prime minister in November after establishing a hung parliament for a 2022 general election.

Anwar’s Pakatan Harapan coalition ousted the long-running Malay-dominated Barisan Nasional coalition after 60 years in power in the 2018 general election. This was partly due to public outrage following revelations that then Prime Minister Najib Razak, who led Barisan, had embezzled millions of dollars from 1MDB.

Since 2018, Malaysia has been plunged into political turmoil, going through three prime ministers until Anwar promised to fight corruption and become a “Malaysia for all Malaysians”.

Anwar’s promises highlight the nature and depth of the divisions and problems in Malaysian society.

His anti-corruption pledge led to the arrest of his predecessor, Muhyiddi, who faced bribery charges after a review of billions of dollars in government projects allegedly approved by him.

The issue of race

Anwar also pledged to uphold Malay rights and the position of Islam enshrined in the Federal Constitution, while protecting the rights of all Malaysians regardless of race or religion.

Some in the Malay majority are skeptical of this stance and believe Anwar may be trying to dismantle the country’s long-standing Bumiputera policy.

The longstanding policy included affirmative action in public education and the public sector aimed at uplifting the Malay majority and other indigenous races, but today it is seen as limiting Malaysia’s development and perpetuating the drain of talent.

Affirmative action should go beyond race to need-based: Malaysian Prime Minister Anwar Ibrahim

“It’s not a matter of dismantling, it’s a matter of refocusing the areas that matter,” Anwar told CNBC. “For example, we can’t talk about an affirmative action issue that goes from race-based to need-based—pure meritocracy.”

“Once race is perceived to be too much of a focus, it creates hostility and anxiety,” Anwar said. “But if you focus on efficiency of need, justice as justice, we can continue this policy of affirmative action.”

In provincial elections held on August 12, Anwar’s coalition and the opposition Perikatan Nasional, led by Muhyiddin and backed by the conservative Islamic party, each retained the three states they previously won.

However, the opposition was able to make significant inroads among the country’s majority Malay Muslims, especially the youth and those living in rural areas.

“Endemic means that the whole system is compromised. And by that … you mean a huge, huge problem for people like me to try and dismantle it. It’s more than talking about dismantling specific policies, the Malay policy, whatever. It is a corrupt system,” Anwar told CNBC.

“When you do that, the corrupt will gather all their wealth, power, influence and media to go after you. Using race, that’s exactly what happened in this election,” he added.

Although crucial to Anwar, the outcome of this state election did not affect Pakatan Harapan’s two-thirds majority in the national parliament.

Malaysian Anwar Ibrahim says that Malaysia and Indonesia should be able to complement each other

“We have inherited a system with 1.5 trillion ringgit ($322.8 billion) in debt and a 5.6% deficit, which we are determined to reduce. And they will definitely not be popular because we will not be able to get it out,” Anwar said. .

“Considering all these factors and the fact that the opposition will use the race and religion card… we did a great job.”

— CNBC’s Naman Tandon contributed to this report.

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