COMMENT | The government’s US$1.8 billion (RM8 billion) settlement with the United Arab Emirates (UAE) over 1MDB represents a US$3.98 billion (RM18 billion) shortfall compared to the amount of US$5.78 billion (RM26 billion) that former attorney-general Tommy Thomas was disputing.

In a repeat of the Goldman Sachs settlement done during the Muhyiddin Yassin administration, the current unity government led by Anwar Ibrahim also appears to have given too much to the UAE in the settlement. 

Thomas had used a number of external lawyers, including a Queen’s Counsel from the UK, to set aside a previous settlement highly detrimental to Malaysia undertaken during the time of former prime minister Najib Abdul Razak.

The settlement involves two UAE companies, International Petroleum Investment Company (IPIC), a national wealth fund of the UAE, and its subsidiary Aabar Investments PJS. 

The former two top officials of these companies - IPIC’s CEO then Khadem Abdulla Al Qubasi and Aabar’s CEO Mohamed Ahmed Badawy Al-Husseiny were involved in a scheme to defraud 1MDB. Reports associated them with some members of the UAE royalty.

The US Department of Justice report on 1MDB showed that Qubasi received US$473 million and Husseiny US$67 million from funds embezzled from 1MDB via bank accounts linked to Jho Low, an accessory of Najib in the 1MDB thefts.  Both Qubasi and Husseiny were arrested, tried and imprisoned in UAE, Qubasi for 15 years.

The Goldman Sachs settlement was for US$3.9 billion out of which US$1.4 billion were guarantees that assets recovered from the bond proceeds arranged by Goldman would be at least that much. The cash settlement was only US$2.5 billion. It was unlikely that there would be a shortfall in the assets recovered....