January 30, 2016
Swiss Question Use of Malaysian Sovereign Fund Run by Prime Minister Najib Razak
by Louise Story
…the Swiss government announced Friday that it had found serious indications that funds had been misappropriated from Malaysian state-owned companies.-NY Times
Days after the Prime Minister of Malaysia was cleared of wrongdoing in an investigation into transfers of money into his bank accounts, the Swiss government announced Friday that it had found serious indications that funds had been misappropriated from Malaysian state-owned companies.
The sovereign wealth fund at the center of the Swiss inquiry, called 1Malaysia Development Berhad, or 1MDB, has been the focus of several investigations around the world as authorities attempt to ascertain whether money vanished in a series of international business deals.
“We believe we have compiled significant evidence of illegal transactions and wrongdoing, which we will transmit to the respective Malaysian authorities in the coming days,” said André Marty, a spokesman for the Swiss Attorney-General, in an email.
The Swiss Attorney-General formally requested help from Malaysia in its investigation, and Mr. Marty said that his office hoped that Malaysia would provide that assistance. He said that Malaysia’s Attorney-General had agreed to do so in a meeting in Switzerland in September.
Will he cooperate with the Swiss Authorities?
Since then, however, Malaysian law enforcement has moved toward closing the investigations into Mr. Najib. The announcement this week focused on questions surrounding nearly $700 million that had been deposited in Mr. Najib’s bank accounts. Malaysia’s attorney general on Tuesday said the money was a personal donation to him from the Saudi Royal Family.
The Swiss announcement on Friday provided details on the direction of Switzerland’s investigation. It said that $4 billion was believed to have been misappropriated and that some of that money was transferred into bank accounts in Switzerland held by former Malaysian public officials and current and former public officials in the United Arab Emirates.
The United Arab Emirates carried out a series of business deals with U.A.E. state companies and 1MDB, and some of those deals are mentioned in the Swiss announcement, including a joint venture in 2013 between 1MDB and a United Arab Emirates state company called Aabar. The announcement also says the Swiss are looking into allegations involving a small oil company called PetroSaudi that carried out a joint venture with 1MDB.
Aiding in both of those deals was a young businessman named Jho Low, who is a longtime friend of the prime minister’s family. Mr. Low was also active in helping the prime minister’s stepson, Riza Aziz, acquire luxury properties in the United States, The Times found in its investigation, and was involved in Mr. Aziz’s movie business in Hollywood. Mr. Aziz has said one of his main financial backers of the movie company was Mohamed Ahmed Badawy al-Husseiny, who was at the time the chief executive of Aabar, the United Arab Emirates company that was a partner in business deals with 1MDB.
The Swiss have not singled out anyone by name in their announcements and have not made it clear whether Mr. Najib will be a target of their investigation. The Department of Justice in the United States is also investigating 1MDB deals as well as properties in the United States owned by Mr. Low and Mr. Aziz.
Representatives for PetroSaudi, Mr. Najib, Mr. al-Husseiny, Mr. Low and Mr. Aziz did not respond to requests for comment.