A look back at the Abu Dhabi-Malaysia 1MDB dispute

Khaldoon Al- Mubarak (left), managing director of Abu Dhabi’s giant sovereign wealth fund Mubadala Development Company, and Arul Kanda (right), group executive director of 1MDB.
Khaldoon Al- Mubarak (left), managing director of Abu Dhabi’s giant sovereign wealth fund Mubadala Development Company, and Arul Kanda (right), group executive director of 1MDB.PHOTOS: TRINNA LEONG, REUTERS
The site of the Tun Razak Exchange financial district project in Kuala Lumpur, one of the 1Malaysia Development Fund (1MDB) projects.
The site of the Tun Razak Exchange financial district project in Kuala Lumpur, one of the 1Malaysia Development Fund (1MDB) projects. PHOTO: ST FILE

KUALA LUMPUR - Malaysia and Abu Dhabi have reached a settlement on a dispute involving billions of dollars in debt obligations of scandal-scarred 1Malaysia Development Berhad (1MDB) that is at the centre of an international money-laundering probe.

Senior financial executives familiar with ongoing negotiations told The Straits Times that state-owned investment funds from both countries were expected to sign a settlement agreement as early as Friday (April 21).

ST looks at the history as well as the key players involved in the settlement of the bitter dispute between Abu Dhabi and Malaysia involving 1MDB. 

HISTORY

May & October 2012 - IPIC guarantees two bonds worth US$1.75 billion (S$2.4 billion) each for 1MDB which helped the Malaysian state investment firm to raise funds for the acquisition of power-generation assets. As part of the bond guarantee agreement, 1MDB makes collateral payments IPIC.

 

December 2015 - Relations between IPIC/Aabar and 1MDB become strained over missing monies and Malaysia fails to settle payment over a US$1.2 billion loan from Abu Dhabi.

 

April 2016 - Dispute between Abu Dhabi and Malaysia over the missing billions becomes public. Malaysia insists that it made payments amounting to US$3.5 billion to IPIC units. IPIC maintains that it did not receive the bulk of those funds. Bilateral ties are strained and Abu Dhabi declares Malaysia in default.
 
May 2016 - The governments of Abu Dhabi and Malaysia agree to resolve the dispute in private arbitration.
 
July 2016 - US Department of Justice files civil cases to seize more than US$1 billion in assets that it says were acquired though funds misappropriated from 1MDB.
 
August 2016 - Abu Dhabi and Malaysia quietly resume back channel talks to resolve the dispute over the missing monies. The behind-the-scene negotiations remain rocky and on several occasions the talks nearly break down.
 
Mid-April 2017 - Both sides agree to a settlement plan.

KEY PLAYERS

ABU DHABI

- Khaldoon Al- Mubarak, managing director of Abu Dhabi’s giant sovereign wealth fund, Mubadala Development Company, and chairman of the emirate’s Executive Affairs Authority, a special government agency that provides strategic advice to its rulers. He provided the high levels approvals needed to push the tough negotiations along.

- Samer Halwa, Mubadala’s chief legal counsel who has been described as the “quarterback” directing the Abu Dhabi case.

MALAYSIA

- Datuk Amhari Efendi Nasaruddin, head of the economics division in the Prime Minister’s Office and chief troubleshooter to PM Najib Razak. He served as chief liason providing all the high level approvals and at the same time directing Malaysia’s case. 

- Arul Kanda, Group Executive Director 1MDB. 

- Azmi Tahir, Chief Financial Officer 1MDB.

 

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