MOF: Ambank to pay RM2.83b to Malaysia as 1MDB settlement, will save time instead of going to court; won’t affect claims against Jho Low

Ida Lim
·4-min read
A man walks past a 1 Malaysia Development Berhad (1MDB) billboard in Kuala Lumpur, March 30, 2015. — Picture by Yusof Mat Isa
A man walks past a 1 Malaysia Development Berhad (1MDB) billboard in Kuala Lumpur, March 30, 2015. — Picture by Yusof Mat Isa

KUALA LUMPUR, Feb 26 — AMMB Holdings Berhad has agreed to pay RM2.83 billion to the Malaysian government as global settlement on all outstanding claims and actions over AmBank Group’s involvement in the 1Malaysia Development Berhad (1MDB) matter, the Finance Ministry announced today.

The ministry said that this settlement is part of the Malaysian government’s continuing efforts against all parties directly or indirectly involved in 1MDB and 1MDB-linked entities to recover funds.

Finance Minister Datuk Seri Tengku Zafrul Aziz said the settlement agreed with AMMB Holdings would enable a faster recovery of funds to be used for 1MBD’s financial obligations, as compared to going through long court processes.

“This latest settlement is beneficial for the Malaysian people. Resolving this through the court system would have cost a lot of time, money and resources.

“With this settlement, the payment of the monies will be expedited, instead of being held up by lengthy court battles, and can be utilised to fulfil 1MDB’s outstanding obligations,” he said in the statement.

The ministry said the global settlement by AMMB Holdings will address the Securities Commission Malaysia’s (SC) requirements on compliance with the regulatory body’s laws and guidelines.

“As part of the terms for the global settlement, the SC will require AmInvestment Bank Berhad to take corrective measures, including putting in place systems and processes to strengthen their due diligence framework for submission of corporate proposals,” the ministry said.

This global settlement is on top of a RM53.7 million penalty that Bank Negara Malaysia (BNM) had previously imposed and which had been paid by the AmBank Group, the ministry said.

The ministry said the AmBank Group has taken comprehensive measures to address the “lapses” associated with transactions, including measures under a remediation programme that AmBank Group was required by BNM to implement and which is being led by the banking group’s new board and senior management team.

“With these measures, the AmBank Group is well placed to continue safeguarding depositors’ funds and shareholders’ interests, and its future growth,” the ministry also said.

“This global settlement will not affect or compromise Malaysia’s claims against individuals like Jho Low, Jasmine Loo and other parties related thereto and who are still being pursued in relation to the 1MDB scandal,” the ministry added.

Businessman Low whose actual name is Low Taek Jho and former 1MDB general counsel Loo are among individuals believed to be fugitives who had fled the country, and are wanted back in Malaysia to face charges over their role in the massive 1MDB financial scandal.

On the global settlement with AMMB Holdings, the ministry thanked the Attorney-General’s Chambers (AGC), SC, BNM, the Royal Malaysian Police Force, the National Anti-Financial Crime Centre (NAFCC), the Malaysian Anti-Corruption Commission (MACC) and the National Centre for Governance, Integrity and Anti-Corruption (GIACC) for their efforts in achieving the settlement.

According to the AmBank Group’s website, AMMB Holdings is the public-listed holding company of AmBank Group, while the group is stated to be the country’s sixth-largest banking group by assets, with around RM9 billion of market capitalisation and RM169.2 billion worth of assets as of March 31, 2020.

In the ministry’s statement today, it also said the global settlement with AMMB Holdings follows the Malaysian government’s previous successful negotiations in July 2020 with Goldman Sachs for a RM15.8 billion (US$3.9 billion) settlement on the 1MDB matter.

The ministry however assured that such settlements would not prevent Malaysia from continuing pursuing others, noting: “These settlements will not absolve other entities and individuals of their alleged wrongful involvement in 1MDB, and they will continue to be pursued through the criminal justice system.”

Under the previous US$3.9 billion deal which similarly resolved all outstanding charges and claims against Goldman Sachs, the settlement with Malaysia includes Goldman Sach’s cash payment of US$2.5 billion (RM10.6 billion) and guarantee of full recovery value of at least US$1.4 billion (RM5.9 billion) in assets traceable to proceeds diverted from three 1MDB-linked bonds which it had helped arrange.

The ministry had said it was confident that Malaysia was securing more money from Goldman Sachs compared to past attempts and that such an out-of-court settlement save a lot of time, money and resources as compared to going through the courts.

The ministry had previously also said the settlement with Goldman Sachs would not affect the country’s claims against others linked to the 1MDB scandal including Low and that Goldman Sachs acknowledges misconduct by two of its former employees in the matter.

Previously in a November 25, 2020 written parliamentary reply, the Finance Ministry said the combined outstanding amount of government-guaranteed debts owed by 1MDB and its former subsidiary SRC International Sdn Bhd stands at RM44.5 billion, with the federal government required to pay RM3.2721 billion of this figure in 2021.

Related Articles Ex-CEO: Jho Low’s instructions on 1MDB came from PM, but couldn’t check directly with Najib Who started Saudi ‘generous donation’ for 1MDB’s charitable arm? No info in Cabinet minutes, says witness in Najib trial Jho Low could decide who helmed 1MDB, ex-CEO tells Najib’s trial