Financial scandal: Malaysia gets Deloitte’s R1bn settlement, still in talks with KPMG

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(Photo: File, AFP)
(Photo: File, AFP)

Malaysia received $80 million (about R1 billion) from Deloitte in settlement over the firm’s audit of 1MDB and its former unit SRC International between 2011-2014, and the finance ministry said it is in negotiations with KPMG, another former 1MDB auditor.

The government also expects to get 2.83 billion ringgit ($699 million) from local lender AMMB Holdings Bhd. soon, the ministry said in a statement on Thursday. The settlements with Deloitte and AMMB were announced earlier this year.

The money recovered from Deloitte was deposited into Malaysia’s Assets Recovery Trust Account, which has received 16.386 billion ringgit of seized and repatriated funds. The money will be used mainly to repay 1MDB’s debts, the ministry said.

"The current balance is sufficient to service 1MDB’s debt obligations for 2021 and 2022 only," Finance Minister Tengku Zafrul Abdul Aziz said in the statement. "Once all recovered funds in the Trust Account have been utilized, the government will still have to continue bearing the burden of servicing 1MDB’s debt obligations."

Last month, 1MDB and SRC filed civil suits against companies including JPMorgan Chase & Co. and Deutsche Bank to recover assets worth more than $23 billion that the government says are linked to the fund.

The 22 suits are the latest twist in Malaysia’s continuing efforts to recover billions of dollars allegedly siphoned from 1MDB by people connected to the country’s former prime minister.

The 1MDB scam set off investigations in Asia, the U.S. and Europe, and led to the historic change in government in 2018. Goldman Sachs Group last year admitted its role in the biggest foreign bribery case in U.S. enforcement history, reaching multiple international settlements in the billions of dollars to end probes into its fundraising for 1MDB.

Malaysia has repaid 12.54 billion ringgit of 1MDB’s debt and 3.1 billion ringgit of SRC’s debt. The outstanding debt totals 39.66 billion ringgit for 1MDB and 2.57 billion ringgit for SRC, the finance ministry said Thursday.

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