Malaysia's troubled state investment fund 1MDB is preparing to make a repayment, with Chinese assistance, to Abu Dhabi's state-owned International Petroleum Investment Company, as it seeks to settle a dispute in which the Emirati fund is claiming about $6.5 billion.
The move to begin repaying what the Malaysian fund owes, confirmed by two people familiar with the matter, marks a step forward in efforts to resolve the financial position of the heavily indebted state fund.
The two funds reached an impasse earlier this year, with 1MDB insisting it had fulfilled its obligations and Ipic taking the dispute to arbitration in London.
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The relationship between the two funds — once hailed as a "strategic partnership" between Abu Dhabi and Malaysia — has gone sour amid allegations that Emirati officials were involved in a plot to siphon more than $1bn from 1MDB.
Khadem al-Qubaisi, former head of Ipic, has been detained over his suspected role in the affair. He has not been charged with any offence.