Private equity firm Primus Pacific has lodged an appeal over a New York court’s refusal to hear its $500m claim against Goldman Sachs for issues related to the 1MDB scandal in Malaysia.
Hong Kong-based Primus alleged that it was disadvantaged by advice Goldman gave concerning the December 2009 sale of EON, a Malaysian bank that Primus had a 20 per cent stake in.
EON was sold to a domestic rival Hong Leong Bank, which had close ties to then Malaysian prime minister Najib Razak. Primus alleged that Goldman encouraged EON to accept a poor bid because of the US bank’s close relationship with Mr Najib.
That relationship came under scrutiny from summer 2015 after allegations of serious crimes at Malaysian development fund 1MDB, which Mr Najib founded. In November, a state court in Manhattan said Primus’ case could not be heard there because it has “no substantial nexus with New York”.
On Friday, Primus lodged an appeal to the New York court of appeals. The appeal argues that the case should be heard in New York because “multiple employees of the New York-based bank participated in the conduct giving rise to the claims” and “the New York-based bank and its employees are the subject of multiple criminal and regulatory investigations by federal and state law enforcement agencies in New York”.
“The only evidence in the record that disclaims a substantial nexus with New York are self-serving, untested affidavits submitted by defendants which contradict their own previous statements,” the appeal adds. Goldman has until the end of October to make its reply.
A spokesman told the FT: “We are confident that the appellate court will agree with the trial court’s conclusion that this claim does not belong in the New York courts.” Malaysia’s courts do not recognise Primus’ status as a claimant since EON no longer exists.
– FT.com
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