Abu Dhabi’s IPIC files lawsuit against Goldman Sachs, others over 1MDB case

1Malaysia Development Bhd (1MDB) is the subject of corruption and money-laundering investigations in at least six countries. (AFP)
Updated 22 November 2018

Abu Dhabi’s IPIC files lawsuit against Goldman Sachs, others over 1MDB case

  • ‘We are in the process of assessing the details of the allegations and fully expect to contest the claim vigorously’
  • 1MDB and the Malaysian government agreed to pay $1.2 billion to IPIC under a London arbitration award

ABU DHABI: Abu Dhabi’s International Petroleum Investment Co. (IPIC) said on Wednesday it had filed a lawsuit against US investment bank Goldman Sachs and others to recover losses suffered through its dealings with Malaysian state fund 1MDB.
1Malaysia Development Bhd (1MDB) is the subject of corruption and money-laundering investigations in at least six countries.
Government-owned IPIC said in a statement it filed a civil legal action in New York against Goldman, and others, alleging they “played a central role in a long-running effort to corrupt former executives of IPIC and its subsidiary Aabar Investments, and mislead IPIC and Aabar.”
The suit alleges Goldman conspired with unidentified people from Malaysia to bribe Khadem Abdulla Al-Qubaisi, former IPIC managing director and Aabar chairman, and Mohamed Ahmed Badawy Al-Husseiny, former Aabar chief executive, to further the business of Goldman and 1MDB at the expense of IPIC and Aabar.
“We are in the process of assessing the details of the allegations and fully expect to contest the claim vigorously,” a Goldman spokesman said.
Malaysian government officials could not immediately be reached for comment.
IPIC also said in its statement that it had filed a criminal complaint in the United Arab Emirates against Qubaisi and Husseiny, for allegedly accepting bribes and abusing their authority. The current whereabouts of the two men is not publicly known and they could not be contacted.
“For Abu Dhabi to advance serious allegations against Khadem Al-Qubaisi, while at the same time denying him the opportunity to speak to his lawyers, review any evidence and put forward any defense is the most serious abuse of process,” Qubaisi’s lawyer Michael O’Kane, senior partner and head of business crime at Peters & Peters Solicitors LLP, said in an email to Reuters.
Last year, 1MDB and the Malaysian government agreed to pay $1.2 billion to IPIC under a London arbitration award and assume responsibility for future principal and interest payments on 1MDB bonds which IPIC had guaranteed.
On Tuesday, Malaysia sought to set aside that award, IPIC said. It said it would fight that action and take steps to reaffirm the validity of the settlement.
An estimated $4.5 billion was misappropriated from 1MDB by high-level officials of the fund and their associates between 2009 and 2014, the US Justice Department has alleged.
Three weeks ago, US prosecutors unveiled criminal charges against two former Goldman bankers and Malaysian financier Low Taek Jho related to the 1MDB case.
Meanwhile, the Malaysian government has said it wants to reclaim from Goldman fees which the US bank received for helping 1MDB raise money as well as losses suffered due to the deals.


OECD forecast sees global growth at decade low

Updated 22 November 2019

OECD forecast sees global growth at decade low

  • Governments failing to get to grips with challenges, outlook says

PARIS: The global economy is growing at the slowest pace since the financial crisis as governments leave it to central banks to revive investment, the OECD said on Thursday in an update of its forecasts.

The world economy is projected to grow by a decade-low 2.9 percent this year and next, the Organization for Economic Cooperation and Development said in its Economic Outlook, trimming its 2020 forecast from an estimate of 3 percent in September.

Offering meagre consolation, the Paris-based policy forum forecast growth would edge up to 3 percent in 2021, but only if a myriad of risks ranging from trade wars to an unexpectedly sharp Chinese slowdown is contained.

A bigger concern, however, is that governments are failing to get to grips with global challenges such as climate change, the digitalization of their economies and the crumbling of the multilateral order that emerged after the fall of Communism.

“It would be a policy mistake to consider these shifts as temporary factors that can be addressed with monetary or fiscal policy: they are structural,” OECD chief economist Laurence Boone wrote in the report.

Without clear policy direction on these issues, “uncertainty will continue to loom high, damaging growth prospects,” she added.

Among the major economies, US growth was forecast at 2.3 percent this year, trimmed from 2.4 percent in September as the fiscal impulse from a 2017 tax cut waned and amid weakness among US trading partners.

With the world’s biggest economy seen growing 2 percent in 2020 and 2021, the OECD said further interest rate cuts would be warranted only if growth turned weaker.

China, which is not an OECD member but is tracked by it, was forecast to grow marginally faster in 2019 than had been expected in September, with growth of 6.2 percent rather than 6.1 percent.

However, the OECD said that China would keep losing momentum, with growth of 5.7 percent expected in 2020 and 5.5 percent in 2021 in the face of trade tensions and a gradual rebalancing of activity away from exports to the domestic economy.

In the euro area, growth was seen at 1.2 percent in 2019 and 1.1 percent in 2020, up both years by 0.1 percentage point on the September forecast. It is seen at 1.2 percent in 2021.

The OECD warned that the relaunch of bond buying at the European Central Bank would have a limited impact if euro area countries did not boost investment.

The outlook for Britain improved marginally from September as the prospect of a no-deal exit from the EU recedes.

British growth was upgraded to 1.2 percent this year from 1 percent previously and was seen at 1 percent in 2020.