Abu Dhabi, Malaysia deal on 1MDB fund
ACCORD TO RESOLVE LEGAL DISPUTE WILL SEE ABU DHABI RECEIVE $1.2B OVER THIS YEAR
Emirati and Malaysian officials said yesterday they reached a deal to resolve a legal dispute over the indebted and troubled Malaysian investment fund 1MDB, with Abu Dhabi set to receive $1.2 billion (Dh4.41 billion) over this year.
The deal, which still would need to be approved by an arbitration panel in London, resolves merely one part of the sprawling, worldwide investigation into 1MDB.
Money from the fund, which was to develop Malaysia’s economy, instead found itself funnelled through a global embezzlement and money-laundering scheme involving people close to Malaysian Prime Minister Najib Razak, luxury properties and the production of the 2013 film The Wolf of Wall Street ,US investigators allege.
IMDB default
In 2016, the Abu Dhabibased International Petroleum Investment Co. alleged 1MDB defaulted on more than $1.1 billion in debt it owed to the sovereign wealth fund and its subsidiary, Aabar Investments. It filed a case against the fund in the London Court of International Arbitration.
A filing yesterday on the London Stock Exchange said Malaysian officials agreed to pay the wealth fund $1.2 billion this year, with half being due by July 31 and the other half by December 31. The filing said Malaysian officials also have agreed “to assume responsibility for all future interest and principal payments” on two $1.75 billion bonds.
The agreement is contingent on the arbitration panel making a consent award on May 31, the filing said.
1MDB released a short statement yesterday saying it was “pleased” by the agreement, saying it “represents the resolution of a significant challenge.” Officials with the International Petroleum Investment Co., (IPIC), could not be immediately reached for comment.
The resolution comes as 1MDB remains the target of investigators in Singapore, Switzerland, Luxembourg and the US. American investigators allege officials at the fund diverted more than $3.5 billion through a web of shell companies and bank accounts.
Malaysian Prime Minister Najib Razak started the fund shortly after taking office in 2009 to promote economic development projects, but the fund accumulated billions in debt. Najib has denied any wrongdoing, but the scandal sparked a mass rally in November against his government.
In June, His Highness Shaikh Mohammad Bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, ordered that IPIC merge with the Mubadala Development Co., a sovereign wealth fund, amid low global oil prices. The combined fund will hold roughly $135 billion in assets across businesses from computer chips to renewable energy for Abu Dhabi.