KUALA LUMPUR (Dec 21): The government may take legal action against overseas banks that allegedly failed to follow the “Know Your Customer appropriately” (KYC) verification process, leading to 1Malaysia Development Bhd (1MDB) funds being misplaced into unrelated accounts.
1MDB Task Force chairman Datuk Seri Johari Abdul Ghani noted that eight international banks were identified as having allegedly facilitated transactions, resulting in money from the 1MDB scandal flowing into multiple countries.
However, the Titiwangsa Member of Parliament (MP) did not disclose the countries involved when the money transaction took place.
“We can initiate legal actions against these international banks for not conducting their KYC properly.
“If we sue any bank in all countries that have this money flow and [if] they want to challenge it in the court, we could take this to court; [but] usually, if it’s a small amount, we can make judgements and settle it out of court.
“These banks also preferred not to be associated with the 1MDB scandal,” Johari said during a talk session broadcasted by the national television on Wednesday (Dec 20) night, as reported by Utusan Malaysia on Thursday.
On Dec 13, Johari confirmed that he would continue his duties as chairman of 1MDB Task Force, even though he had been appointed as the new Minister of Plantation and Commodities a day earlier.
He emphasised that he still needs to lead the task force because there are issues that have not been resolved, especially in relation to recovering national assets related to the financial scandal.
Recently, Goldman Sachs sued the Malaysian Government in a United Kingdom court, regarding a settlement agreement related to the bank’s (Goldman Sachs’) role in the 1MDB corruption scandal.
However, Johari pointed out that the legal action against other international banks is for phase two.
He said the first phase is to get as much money as possible from a settlement agreement with Goldman Sachs, which saw the investment bank guarantee the return of US$1.4 billion in 1MDB assets seized by authorities around the world.
“We have reached a stage of major recovery from Goldman Sachs. It’s just that we have a little dispute in terms of the company wanting to pay US$1.4 billion and [yet] they (Goldman Sachs) are reluctant to pay.
“Even though we have extended it (the payment deadline) four times, they (Goldman Sachs) still refuse to pay; hence, we will have to face arbitration.
“This arbitration will cause us to have to go to trial on the case and we will see the result later,” he said.
Source : THE EDGE