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Malaysian Investment Fund sues firms in effort to recoup $23 billion

Malaysian Investment Fund

The Malaysian Government Investment Fund 1MDB, and a former unit, announced filing 22 joint civil lawsuits against entities and individuals, to recover assets valued at more than $23 billion.

Today, Bloomberg quoted the Ministry of Finance as saying that the Malaysian Government Investment Fund has filed six lawsuits against nine entities, including two foreign financial institutions and 25 individuals, for various offenses including fraud and conspiracy to defraud the fund.

On the other hand, SRC International Sdn unit of the Malaysian Government Investment Fund has filed 16 lawsuits against 15 individuals and eight entities.

This is due to various violations that include abuse of power and violation of fiduciary duties in public offices, according to what was stated in the statement today.

The ministry did not specify who had been prosecuted.

The Malaysian Sovereign Fund scandal is an ongoing political scandal taking place in Malaysia.

In 2015, then-Prime Minister Najib Razak was accused of transferring more than 2.67 billion RM ($700 million) from the Malaysian Investment Fund – a government-run strategic investment firm – into his personal bank accounts.

The event sparked widespread criticism among Malaysians, and many called for the resignation of Najib Razak, including Mahathir Mohamad, one of Najib’s predecessors as prime minister, who eventually defeated Najib and returned to power after the 2018 general elections.

According to its publicly deposited accounts, 1MDB had approximately 42 billion RM ($11.73 billion) in debt.

Part of that debt resulted from the issuance of $3 billion in state-guaranteed bonds for 2013 led by investment bank Goldman Sachs.

The bank has been reported to have received fees of up to $300 million for the deal, although the bank disputes that figure.

The Malaysian Governors Conference Board has called for an immediate investigation into the scandal, saying it is causing a crisis of confidence in Malaysia.

Keep reading: Malaysia’s 1MDB Scandal Cost Goldman Sachs’s CEO Massive Pay Cut

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