KUALA LUMPUR — Malaysia is considering initiating legal proceedings against foreign banks linked to the multi-billion dollar 1Malaysia Development Berhad (1MDB) corruption scandal, the chairman of the 1MDB asset recovery taskforce said on Tuesday.

Johari Abdul Ghani did not name the foreign banks but said they did not conduct proper due diligence before facilitating fund transfers related to the sovereign fund.

Malaysian and US investigators estimated $4.5 billion were stolen from 1MDB, implicating former Malaysian prime minister Najib Razak, Goldman Sachs staff and high-level officials elsewhere.

Najib is serving a 12-year jail sentence for his role in the biggest financial scandal in Malaysia’s history.

“The 1MDB task force is firmly committed in addressing the 1MDB matter transparently and holding all parties accountable,” Mr. Johari said in a statement.

Separately, he added that Malaysia had responded on Nov. 8 to an arbitration request by Goldman Sachs, and the two parties were in the process of agreeing on a procedural timetable.

Goldman Sachs in 2020 had agreed to pay $3.9 billion to settle Malaysia’s criminal probe over its role in the scandal. However, the parties are now in disagreement over the settlement, which stipulates that Goldman should make an interim payment if Malaysia did not recover at least $500 million from the firm by August, 2022.

Goldman then sued Malaysia in a court in Britain in October last year for the Malaysian government’s violation of its obligations to appropriately credit assets against the guarantee provided by Goldman in the settlement agreement and to recover other assets worth $1.4 billion.

Malaysia has denied the allegations it breached the settlement deal. — Reuters