It’s not every day you hear about a state fund with billions of dollars involved in a settlement. But such has been the case for Abu Dhabi’s International Petroleum Investment Company (IPIC). The company recently reached a $1.8 billion settlement with US authorities over its involvement in the 1MDB scandal. The 1MDB scandal has been one of the biggest financial scandals in recent memory, with massive amounts of money embezzled from Malaysian government funds to prop up companies and leaders associated with former Prime Minister Najib Razak. In this article, we look at IPIC’s role in the scandal, its implications on Abu Dhabi, and what it means for international finance moving forward.
What is the 1MDB Scandal?
The 1MDB scandal is a financial scandal that began in 2015 when it was revealed that over $1 billion had been misappropriated from 1Malaysia Development Berhad (1MDB), a Malaysian state investment fund. The scandal resulted in criminal charges being filed against several individuals, including the former Prime Minister of Malaysia, Najib Razak.
In 2015, The Wall Street Journal published an article revealing that over $1 billion had been diverted from 1MDB to the personal bank account of Malaysian Prime Minister Najib Razak. This revelations led to a series of investigations by Malaysian authorities, as well as by international organizations such as the FBI and Interpol.
Several individuals have been charged in connection with the scandal, including Najib Razak, who was arrested and charged with money laundering and corruption in 2018. As of 2019, the trial is ongoing.
The 1MDB scandal has caused significant damage to Malaysia’s reputation, and has resulted in billions of dollars being wiped off the value of 1MDB’s assets.
Who is Abu Dhabi State?
Abu Dhabi State is the largest of the seven Emirates that make up the United Arab Emirates, and it is also the capital city of the country. The Emirate of Abu Dhabi covers an area of 67,340 square kilometers, which is about 27% of the total land area of the UAE. The population of Abu Dhabi Emirate was estimated to be 2.8 million in 2013.
What is the $1.8bn Settlement?
The $1.8bn settlement is a result of an investigation by the US Department of Justice (DOJ) into alleged corruption at the state-owned Abu Dhabi Investment Authority (ADIA) and its involvement in the 1MDB scandal.
According to the DOJ, ADIA funneled over $3bn in bribes to officials in Malaysia and other countries in exchange for contracts with 1MDB. The settlements resolves these allegations and concludes the DOJ’s investigation.
How will the Settlement be used?
As part of the settlement, Abu Dhabi will receive $3.5 billion, which will be used to “strengthen governance and anti-corruption measures” at the bank. The funds will also be used to “support low-income and vulnerable populations in developing countries.”
What Happens Next in the 1MDB Scandal?
In the 1MDB scandal, Abu Dhabi state funds have agreed to a $.bn settlement. This is one of the largest financial settlements in history.
The settlement will end all litigation between the two parties and is a significant step forward in resolving the 1MDB scandal.
This is a complex case with many players involved. The settlement is a positive development, but there is still much work to be done to fully resolve the scandal.
Conclusion
The settlement of $1.8bn between Abu Dhabi State Funds and 1MDB marks a major milestone in the long-running scandal surrounding the sovereign wealth fund. It is an important reminder that those who break the law, regardless of their position or power, will be held accountable for their actions. The agreement also sets a precedent that provides closure to this incident and makes clear that no one is above the law when it comes to financial misdeeds. Hopefully this resolution serves as a deterrent against future abuse of public funds by state entities such as 1MDB.
