• Tue. Oct 19th, 2021

Malaysia’s AmBank to Pay $ 700 Million in Settlement Linked to 1MDB

ByDiane A. Gomez

May 7, 2021

KUALA LUMPUR (Reuters) – Malaysian banking group AMMB Holdings Berhad (AmBank) on Friday said it would pay the government 2.83 billion ringgits ($ 699 million) to settle claims related to a massive financial scandal at the fund. ‘State 1MDB, a significant payment which is expected to have a significant impact on the results of the group.

The AmBank group has come under scrutiny for its role in the alleged theft of $ 4.5 billion from 1Malaysia Development Berhad, a state fund established in 2009 by former Prime Minister Najib Razak.

Last year, Najib was convicted of bribery and money laundering for transferring millions of dollars linked to a 1MDB unit to his Ambank accounts between 2014 and 2015. He denies any wrongdoing and has filed a appeal.

In a filing with the exchange, AmBank said a provision for the amount would be recorded in the last quarter of the group’s fiscal year ending March 31.

That will translate to a loss of 93.89 sen per share, he said.

“While this has a significant impact on profitability for the current year, there are adequate capital buffers to absorb this settlement without the need to immediately raise additional equity,” the group said.

The company will not offer any final dividends for the year ending March 31 following the settlement, he added.

The finance ministry said in a statement that the Malaysian securities regulator would require AmInvestment Bank Berhad to take corrective action, including putting in place systems and processes to strengthen its due diligence framework, in the framework of the regulation.

The payment will also be used to help settle the unpaid obligations of 1MDB, the ministry said.

The government said in November that 1MDB still had $ 7.8 billion in debt as a result of the scandal.

In 2015, the Malaysian central bank fined AmBank 53.7 million ringgit for violating certain financial regulations.

($ 1 = 4.0480 ringgits)

(Reporting by Rozanna Latiff and Joseph Sipalan; Editing by David Goodman, Barbara Lewis and Jonathan Oatis)

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