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With a Malaysian bank forfeiting millions for the part it played in the country’s 1MDB scandal, Nicola Sharp of financial crime specialists Rahman Ravelli considers the price paid by those accused of the wrongdoing.

Author: Nicola Sharp  16 March 2021

Posted in: Anti-Money Laundering.

Malaysian banking group AmBank is to pay the country’s government the equivalent of $699 million to settle claims linked to the 1MDB financial scandal.

AmBank’s role in the alleged stealing of USD$4.5 billion from the 1MDB Malaysian development fund has been closely examined since reports of financial wrongdoing surfaced.

IMDB was set up in 2009 by former Prime Minister, Najib Razak. Last year, Najib was convicted of corruption and money laundering, regarding the transfer of millions of dollars linked to 1MDB to his AmBank accounts between 2014 and 2015. He was sentenced to 12 years’ imprisonment and fined RM210 million (USD$49 million).He continues to deny the allegations and has filed an appeal.

AmBank has stated that a provision for the settlement will be recorded in the final quarter in the group’s financial year, ending March 31. This will result in a loss of AmBank share value. The settlement that AmBank has reached with Malaysia’s Securities Commission also includes an undertaking to improve its due diligence systems.

In July 2020, Goldman Sachs reached a USD$3.9 billion settlement with the Malaysian government over its alleged role in assisting 1MDB in the sale of bonds worth USD$6.5 billion in 2012-13. This settlement saw all criminal and regulatory proceedings discontinued in Malaysia. Goldman Sachs has reached separate agreements with US, UK, Hong Kong and Singaporean authorities totalling nearly USD$3 billion.

The settlements that AmBank and Goldman Sachs have had to pay over 1MDB are high-profile – and high-priced - indicators of the global approach that is being taken to enhance due diligence and reduce fraudulent behaviour and money laundering.

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Nicola Sharp

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Nicola is known for her fraud, civil recovery and business crime expertise, her experience of leading the largest financial disputes and multinational investigations and her skills in devising preventative measures and conducting internal investigations for corporates.

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