1MDB Probe: Troubles for Mr. Najib Razak are far from over


April 14, 2016

1MDB Probe: Troubles for Mr. Najib Razak are far from over as international pressure mounts.

by Jeevan Vasagar in Singapore and Ralph Atkins in Zurich 04-12-16)

http://www.ft.com

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Prayers alone won’t help, Mr. Najib

Kuala Lumpur is facing intensifying international pressure after Swiss authorities said former officials at an Abu Dhabi sovereign fund were being investigated over suspected crimes linked to 1MDB, Malaysia’s state investment fund.

The Swiss Attorney-General also said in a statement on Tuesday that a portion of funds allegedly misappropriated from 1MDB appeared to have been diverted to a “company related to the motion picture industry”.

The Swiss intervention marks a widening of the probe by global regulators into a scandal that has rocked Malaysia, Southeast Asia’s third-biggest economy. It is the first time the authorities have said publicly that individuals from outside the country are under investigation in connection with the affair, in which critics allege the fund has been used as a vehicle to steal vast sums of state money.

Najib Razak, Malaysia’s Prime Minister, who heads 1MDB’s advisory board and oversaw its creation in 2009, is not a target of the Swiss investigation. But the broadening probe raises fresh questions about official oversight of the fund.

Swiss authorities say they have found “serious indications” that about $4bn has been misappropriated from Malaysian state companies. Meanwhile, Mr Najib has battled allegations over $681m transferred into his personal bank account which critics allege is linked to 1MDB. Both Mr Najib and 1MDB deny any wrongdoing and the premier has been cleared by Malaysia’s Attorney-General.

Apandi ampu

Malaysia’s Infamous Attorney-General

The Swiss Attorney-General said on Tuesday that the two former officials with responsibility for Abu Dhabi sovereign funds were under investigation for fraud, criminal mismanagement, misconduct in public office, forgery of a document, bribery of foreign public officials and money laundering.

The Swiss proceedings relate to a $1.4bn payment from 1MDB as collateral for a pair of 2012 bond issues guaranteed by Abu Dhabi’s International Petroleum Investment Company (Ipic).

The office of the Swiss Attorney-General said it suspected that the amounts paid in connection with the guarantee did not go to the Abu Dhabi sovereign fund.

The Swiss proceedings relate to a $1.4bn payment from 1MDB as collateral for a pair of 2012 bond issues guaranteed by Abu Dhabi’s International Petroleum Investment Company (Ipic).

The office of the Swiss Attorney-General said it suspected that the amounts paid in connection with the guarantee did not go to the Abu Dhabi sovereign fund.

“To the contrary, these funds would have benefited others, particularly [the] two public officials concerned as well as a company related to the motion picture industry,” the statement said. “A former 1MDB body already indicted in the Swiss proceedings has also benefited from these amounts.”

1MDB has previously denied media reports that it provided funds to finance The Wolf of Wall Street, the Martin Scorsese film starring Leonardo DiCaprio as fraudster Jordan Belfort. The film was produced by Red Granite Pictures in the US, whose co-founder is Riza Aziz, stepson of the Malaysian Prime Minister.

US authorities are investigating whether the source of funding of Red Granite is linked to 1MDB. They are examining multiple shell companies that link to the movie studio.

A Red Granite spokesperson said the company was responding to “all inquiries and co-operating fully”.

“There has never been anything inappropriate about any of Red Granite Pictures or Riza Aziz’s business activities. What they have done and will continue to do is develop and produce successful and acclaimed movies that have generated more than $825m in worldwide box office revenues,” the spokesperson said.

Ipic and its Aabar subsidiary issued a London Stock Exchange statement on Monday in which they denied ownership of Aabar Investments PJS Ltd, a company that received billions of dollars in payments from 1MDB.

Ipic and Aabar said in the filing that they were aware of reports that “substantial payments” were made to that company, which is incorporated in the British Virgin Islands. They also said they had received no payments from the company and received no liabilities on its behalf.

Khadem al-Qubaisi, Ipic’s Managing Director, and Mohamed Badawy al-Husseiny, Chief Executive of Aabar, both left their posts last year.

People familiar with the matter say the United Arab Emirates central bank has ordered financial institutions to freeze both men’s assets and the two have been placed under effective house arrest, with their passports confiscated — a common tactic during investigations into alleged financial irregularities. The men could not be reached for comment on Tuesday.

A report by Malaysia’s public accounts committee said last week that $3.5bn in payments from 1MDB to Aabar Investments PJS Ltd had not been accounted for, including the $1.4bn collateral payment.

Swiss authorities said they had issued two new requests for mutual legal assistance, to Luxembourg and Singapore, as part of the criminal proceedings. The authorities’ statement said: “As for any defendant, the two Emirati public officials . . . are presumed innocent.”

In a statement on Monday, 1MDB said its company records showed documentary evidence of the ownership of Aabar Investments PJS Ltd and of the payments that had been made. The statement did not identify the owner of the British Virgin Islands company.

The Malaysian fund said the payments were made to Aabar Investments PJS Ltd in accordance with legal agreements negotiated with Mr Qubaisi and Mr Husseiny. The 1MDB statement said: “It is, therefore, a surprising claim that neither Ipic nor Aabar have knowledge of, nor have benefited from, payments made by 1MDB to Aabar BVI.”

On Tuesday, 1MDB referred to its previous statement in response to inquiries.

In a statement on Monday, 1MDB said its company records showed documentary evidence of the ownership of Aabar Investments PJS Ltd and of the payments that had been made. The statement did not identify the owner of the British Virgin Islands company.

The Malaysian fund said the payments were made to Aabar Investments PJS Ltd in accordance with legal agreements negotiated with Mr Qubaisi and Mr Husseiny. The 1MDB statement said: “It is, therefore, a surprising claim that neither Ipic nor Aabar have knowledge of, nor have benefited from, payments made by 1MDB to Aabar BVI.”

On Tuesday, 1MDB referred to its previous statement in response to inquiries.

Last August, Swiss authorities opened criminal proceedings against two former 1MDB officials on suspicion of bribery of foreign public officials, misconduct in public office, money laundering and criminal mismanagement.

Additional reporting by Simeon Kerr in Dubai and Kara Scannell in New York

11 thoughts on “1MDB Probe: Troubles for Mr. Najib Razak are far from over

  1. Obama has said “goodbye” to his golf buddy, opening the way for full scale investigation by the FBI and others. Naturally, Obama does not want his legacy tainted by association with Mr. Najib. So the heat is on (to quote Sonny of Sonny and Cher). But it is amazing that Najib has been able to remain in power despite this mother of Malaysian scandals. Now the question is for how long more before the long arm of the law gets to him.–Din Merican

  2. It is a Malaysian shame that Najib is not already running with tails between his legs and rely on foreigners to do what should be brainless for us to do. Honestly, I feel shame even just letting people know I am Malaysian

    Najib, Rosmah and their team should be on their knees begging for mercy to Malaysian instead of accusing anyone or anything else .

  3. yeah… for how long?
    _____________
    The answer to your question: not forever. In the long run, like the rest of us, Najib will be dead (to quote, the great British economist and mathematician, John Maynard Keynes).–Din Merican.

  4. Quote:- “Now the question is for how long more before the long arm of the law gets to him”

    The clincher has to be when some of the “lost” monies are traced to Najib’s AmBank account, or used to buy the London, New York properties all of which must leave a paper trail somewhere when such large sums are involved. The Red Granite monies is a start.

    The 2 Arabs has now to make personal deals to save their own skins, especially when facing possible executions in Saudi Arabia which is not like Australia which is being asked to give asylum to a convicted murderer.

    The shit should hit the fan soon in the hot Arabian summer.

  5. 1MDB is not a victim of a scam. 1MDB is the scam. The scammers are najib and jho low. The victims are the rakyat.
    ______________
    Tupin,

    They have run out of ideas. The latest one is a super joke. In truth, as you say,1MDB is the biggest scam in Malaysian corporate history.–Din Merican.

  6. Wayne, the IPIC dirty duo are not Saudis. One is a US citizen originally from Kenya, the other is Emirati.

  7. Wayne, the two Emiratis are not Saudis are… one is from UAE and the other is a Kenyan holding US Passport. So Saudi Arabia has no jurisdiction over them.

    What is obvious now is the US Justice Dept has asked for the extradition of one suspect from UAE and mind you, there is such a thing as plea bargaining in the US legal system, this suspect will spill the beans to save himself from long-term jail sentence, I bet you he will squeal.

    Also do remember during the presidency of Ronald Reagan, he sent in the US Marines into Panama to pluck strongman Manuel Antonio Noriega, the then Panama President, and took him back by force to Miama Florida to stand trial. Mr Noriega is in a Florida jail for a life sentence.

  8. Just to make a couple of legal points. Manuel Noriega was NEVER appointed or elected as the President of Panama. Noriega’s official position was commander of the Panamanian armed forces. His puppet president was Eric Delvalle, who was the official head of state of Panama. Also, Noriega is currently in prison in France, where he was extradited after he was freed from the US in 2007.

    It remains a fact that no sitting head of state has been arrested by a foreign power and tried by that foreign power since the end of WWII. So far, only the UN or UN agencies have indicted sitting heads of state, for example Milosevic of Yugoslavia and Bashir of Sudan, and only on cases of “crimes against humanity” and war crimes.

    In Milosevic’s case, his own country delivered him to the UN in 2001 after throwing him out of power. In Bashir’s case, various countries such as South Africa and China have refused to arrest him when he visited them, and so he remains in power in Sudan. Apart from this, sitting heads of state have been deposed by their own people and tried at home, such as Mubarak most recently.

    It is noteworthy that after US soldiers caught Saddam Hussein (President of Iraq), he was delivered to the Iraqi authorities for his trial. He was not taken to the US. Also, Saddam’s trial only started after the occupation had formally ended, and authority handed to an Iraqi government in 2004. Yes, one may say these are pure legal formalities, but it is worth noting that the formalities were observed.

  9. PM SHOULD BE ADDRESSED ‘YAB’ but not a person when referred by name. This is personal view.

  10. YAB is fof PM and NOT FOR PERSON.. A person with title like ‘Datuk’ gdts YB. This how it was explained to me by a DATUK.

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