Where is 1MDB’s Brader Arul?


October 28, 2018

Where is 1MDB’s Brader Arul?–Braders  MIA

by R.Nadeswaran

http://www.malaysiakini.com

Image result for  Rosmah Mansor with Hamsa ali

Brader Arul probably back to Sitiawan to sell Boe-Tie Chendol

COMMENT | Six months ago, he was a much sought-after speaker. Not so for pre- and post-dinner entertainment but to propagate to the masses that everything is hunky-dory in a company called 1Malaysia Development Bhd (1MDB).

He undertook a series of 30 roadshows throughout the country. However, for all intents and purposes, they were political gatherings in support of the then ruling party. The blue buntings and minders dressed in blue vests with the “dacing” logos gave away the charade.

He didn’t exactly draw big crowds or enthral them with his mantra. But the media copiously repeated his chants through interviews.

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Brader Apandi silenced

On eve of Election Day on May 9, he declared that the roadshow had achieved its objectives, claiming more and more people were beginning “to understand and accept the issues facing the 1MDB”.

Forty-eight hours later, Arul Kanda’s world came tumbling down. So did the fate of thousands of others who thought that their shenanigans and tom-fooleries had been adequately covered so that they could continue ripping the nation.

Despite the entire hullabaloo and the worldwide coverage of the US Department of Justice findings, Arul Kanda had once famously boomed: “I have no idea of the identity of Malaysian Official 1 (MO1) in the report and do not want to speculate”— even after BN propaganda chief Abdul Rahman Dahlan’s admission on the identity.

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Brader Ali Hamsa put to pasture

These prophetic words were plentifully and profusely reproduced in the subservient mainstream media in its election propaganda. After all, wasn’t he the Messiah who had arrived from the Middle East to save 1MDB? Wasn’t he willing to face all and sundry in any debate at anytime and anywhere? Wasn’t he touted by some sections of the Royal Military College alumni that only a “budak boy” could put the house in order?

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Flamboyant Brader Irwan Serigar Abdullah  put in cold storage pending trial

Wasn’t he the man whose magic wand could turn bad to good; wrong to right; losses to profits; and anything he touched would turn into gold?

Creative accounting

Those who questioned any activities of 1MDB were treated as “enemies of the state” and he was the much-sought after person by news persons in the BN-related media houses. He attached labels on his detractors. He could do no wrong. And their responses were spiked by editors.

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 MP Tony Pua –The Luke Sky Walker of The 1MDB Saga

After Petaling Utara MP Tony Pua  made a series of satirical videos, Arul Kanda bellowed: “He is a hypocrite and would make a great comedian.” He described fellow Malaysiakini columnist P Gunasegaram (pic below)  a “coward”. But when the writer invited Arul Kanda to a public discussion on 1MDB, the latter chickened out. The last we heard on the issue was: “I will await their (his lawyers’) legal advice on how best to clear my name and to let the facts stand on its own.”

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T

hen the facts and figures which Arul Kanda and company were fudging with some sort of creative accounting emerged. On May 23, the new Finance Minister revealed that 1MDB was unable to pay its debts. For that too, he had an answer— he didn’t know financial details of the company.

Wasn’t he the same guy, who went on the roadshows to tell Malaysian voters “the truth” among which was his claim that the 1MDB’s debt of US$7.75 billion is backed by US$11 billion in assets?

Why the sudden interest in Arul Kanda? On Thursday, Najib Abdul Razak and former Treasury chief Irwan Serigar Abdullah pleaded not guilty in the Sessions Court in Kuala Lumpur to six counts of criminal breach of trust (CBT) of RM6.64 million of funds belonging to the government.

The offences were alleged to have been committed at the Finance Ministry Complex in Putrajaya between December 21, 2016 and December 18, 2017. Wasn’t this done for 1MDB which was then under Arul Kanda’s watch? And wasn’t he aware of these arrangements when he went on his roadshows?

Let’s digress. Najib wanted to gag the media when he was first charged with offences related to SRC International last month, claiming he did not want a “trial by media”. He failed.

It is the same Najib now, trying to provide his defence via the media. He spoke to reporters after the proceedings, proclaiming innocence.

This man and his infamous wife have been striped of their titles by The Ruler of Negri Sembilan and are now on bail pending trial for corruption, money laundering and abuse of power.

“My conscience is clear that the decisions were taken in the interest of the nation, in context of when you receive certain money, you will have to pay it back.

Otherwise, we would be at default and it would lead to a collapse of the bond market. That would be very serious.”

In a Facebook post, Najib said four of the six charges were related to a settlement with the International Petroleum Investment Company (IPIC), where the government had to pay US$1.2 billion in arrears last year.

Let us put this into perspective. N is the owner of a hospital. Money, say RM100,000, has been set aside for payment to the food contractor, RM100,000 for pharmaceuticals and RM50,000 for cleaning services. N tells the finance director, S, to “pakat” with him to pay a bank loan unrelated to the hospital. S then instructs A, the chief executive officer to remit RM250,000 to the bank to prevent foreclosure.

Is it acceptable for N to come out and claim that those transactions had to be done to avoid embarrassment to the hospital and other loans will be recalled? It is true that N, S and A received no personal gain. But wouldn’t that be wrong in the eyes of the law?

We will leave it to the legal eagles to sort this out but on the issue of 1MDB, IPIC and related issues, the silence from Arul Kanda is deafening. He had previously talked about “solid assets” and “units” which could be converted to cash. Where are they?

For someone who came with his guns blazing, giving Najib cover, Arul Kanda appears to have taken to the bunker as the bombs drop all around him.

For a man who thumped his chest and said “take me on”, he has become as silent as a church mouse. Malaysians are not exactly watching a double-tragedy play like Shakespeare’s “Romeo and Juliet”, but it is worth asking: “Where art thou, Arul Kanda?”


R NADESWARAN is keeping track on the key players who put their hands in the cookie jar in the name of development. Comments: citizen.nades22@gmail.com

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.

Political financing reforms should top PH Government’ s political agenda – Jomo


Political financing reforms should top PH Government’ s political agenda – Jomo

Koh Jun Lin  |  Published: September 27, 2018@ http://www.malaysiakini.com





Reforming how political activities are financed in Malaysia should be on top of the government’s political agenda, said the former Council of Eminent Persons member Jomo Kwame Sundaram.

He said Malaysia has a “very decadent” political system that had been abused, giving examples such as the 1MDB scandal and the inflated costs of the East Coast Rail Link (ECRL) project and two gas pipeline projects that have since been cancelled.

“It is important to recognise that we have a system of political financing which has been so abused that we cannot get ourselves out of this, unless we develop a legitimate, accountable, system of political financing. “So, I would put the whole system of political financing at the top of the list of political priorities that needs to be addressed by the current government,” he said.

He was speaking as a panellist at a talk titled “The Way Forward for Malaysia” last night together with Rembau MP Khairy Jamaluddin Abu Bakar in Kuala Lumpur last night. The event was organised by the Oxford and Cambridge Society of Malaysia and was attended by approximately 170 people.

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Former Prime Minister Najib Abdul Razak has been accused of siphoning money from 1MDB and SRC International and using part of the money to fund political activities through his personal bank account. Najib had maintained that the money had come from foreign donors.

Malaysiakini set up a microsite in July detailing some of the outflows from one of his bank accounts to political entities.

After Najib was implicated in the 1MDB scandal in 2015, he set up the National Consultative Council on Political Financing (JKNMPP) that went on to produce 32 recommendations to reform political financing in Malaysia.

However, the reforms were not in place in time for the 14th General Election.

ECRL ‘a hoax’
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As for the ECRL project, Jomo described it as a hoax that is not part of China’s Belt and Road Initiative projects, and would not be able to pay for itself even if its development expenses are written off.

The government has claimed the cost of the project is RM81 billion – compared to the previous administration’s estimate for RM55 billion – adding it is worth no more than RM30 billion.

China Communications Construction Company Limited (CCCC) Vice-President Sun Ziyu has defended the cost of the project.

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Meanwhile, Jomo said there needs to be consensus involving all political parties in Malaysia on what needs to be done to tacklecorruption, where political financing is only a part of the problem.

Otherwise, he said there won’t be much progress in the area.

“I have a great deal of concern with addressing other sources of corruption, and this of course is very, very important and necessary to address. But we have a very decadent and corrupt economic system as well as a political system. In other words, we have been thoroughly compromised,” he said.

Read More: How political financing is done in other countries https://www.malaysiakini.com/news/444827

OC Phang’s punishment hardly the end of PKFZ saga


September 26, 2018

OC Phang’s punishment hardly the end of PKFZ saga

Opinion  | by R Nadeswaran
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COMMENT | One workday morning in 2007, a group of immigration officers turned up at the headquarters of the Port Klang Free Zone (PKFZ) which the Port Klang Authority (PKA) was jointly developing with the Dubai-based Jebel Ali Free Zone (Jafza).

They asked Jafza’s representative, Noel Gulliver, for his work permit. He had none. According to an agreement between Jafza and the PKA, it is the latter’s responsibility to obtain a permit for Gulliver. They frog-marched him from his office to the Immigration Department for “being in gainful employment without a work permit”.

Ten years have passed since this incident – a culmination of an acrimonious relationship between the two parties. The immediate effect was that the project ended up in what was then the biggest financial scandal in Malaysian history. In those tumultuous days, OC Phang was general manager of the PKA.

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After the fiasco was exposed by the media, she was summoned to appear before the Public Accounts Committee (PAC). Azmi Khalid who chaired the meeting summed it all up: “She (Phang) doesn’t even know what we mean by cash flow projection.”

Azmi said the financial management by Phang and her team was “weak and poor” and that no cash flow projection was made for the project. But nothing happened – just an admonition and it was business as usual.

Then in 2008, the newly-minted transport minister Ong Tee Keat was adamant in getting to the bottom of the issue which had constantly come under attacks by then opposition leader, Lim Kit Siang.

With an equally enthusiastic chairperson, Lee Hwa Beng (photo below), the accounting firm of PriceWaterhouseCoopers was commissioned to carry out investigations and produce a comprehensive report.

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To cut a long story short, the damning report identified the people and the methodologies they used to syphon taxpayers’ money to the tune of millions. The report indicated that members of the board were either in connivance with the management or were “totally sleeping” when decisions were made.

The report was presented to the then premier Najib Abdul Razak who set up a “super task force” to look into the matter. The issue died a slow and lingering death.

The PKA board vetoed a proposal to hold members of the previous boards liable for breach of fiduciary duties. In the meantime, Tee Keat lost his ministerial post. Before Hwa Beng was dumped due to political expediency, he convinced the directors that Phang should be held accountable and be sued for breach of fiduciary duties.

Sterling judgment

With a new minister and a new chairperson, many issues were swept under the carpet. Complaints to various professional bodies were withdrawn without any valid reasons and the “abang-adik” culture reigned supreme. Because of the relentless media pressure, none dared to withdraw the suit against Phang. It dragged on for years.

Yesterday, the equation changed and perhaps, a few precedents were set on ministerial powers and fiduciary duties. The Shah Alam High Court ordered Phang to pay damages to the PKA over losses suffered in the construction of the PKFZ. PKA called eight witnesses while Phang’s lawyers closed their case without calling any.

Judge M Gunalan said Phang decided not to call key witnesses although several names surfaced during the trial including a former transport minister.

“This was important to her claim that she had acted under their instructions without the need to refer to the PKA board of directors,” he said.

He said Phang owed fiduciary, contractual and common law duties to PKA. As such, Gunalan said she could not bypass PKA’s board and unilaterally obtain instructions from the minister of transport or the minister of finance before entering into and committing PKA into binding agreements with huge financial implications.

The fate and culpability of the 23 directors (during whose tenure the breach occurred) are now in limbo. The Federal Court had allowed Phang to include them as co-defendants. They include former cabinet ministers, Dr Ting Chew Peh and Chor Chee Heung, and executive chairperson of Westports Malaysia Sdn Bhd G Gnanalingam.

While the legal eagles argue over the culpability of the respective parties, the judge must be applauded for incorporating the doctrine of fiduciary duties for people holding office in high places.

With this ruling, those holding office in government-linked companies; government-owned companies and statutory bodies registered under the Companies Act can longer offer the defence of “instructions from the minister”.

They cannot bypass their boards, however trivial the issue is.This decision should encourage other government agencies to institute proceedings against their directors for breach of fiduciary duties and other financial irregularities.


R NADESWARAN has been following the PKFZ affair for more than a decade and has a written book on the scandal. The court decision is not a grand finale to its issues. There are many more and it isn’t over till the fat lady sings. Comments: citizen.nades22@gmail.com.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.

 

What Lehman Brothers’ Failure Means Today


What Lehman Brothers’ Failure Means Today

by Harold James

https://www.project-syndicate.org/commentary/lehman-brothers-ten-year-anniversary-by-harold-james-2018-09

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The standard story about the September 2008 collapse of Lehman Brothers is that it led to a deeper understanding of the risks of financial complexity and free-wheeling capitalism. In fact, the ensuing crises in the US, Europe, and elsewhere were more a product of broader changes in twenty-first-century politics and society.

 

PRINCETON – So far this year, the world has marked the 50th anniversary of the Prague Spring (and its suppression), the centennial of the end of World War I, and the bicentennial of Karl Marx’s birth. Against that backdrop, should one really care about the tenth anniversary of the collapse of Lehman Brothers?  

Yes, we should. Lehman may not have been a particularly large bank, and it probably was not even insolvent when it failed. Nonetheless, it nearly took down the global financial system and triggered the Great Recession. Lehman was transformative because it fundamentally altered people’s understanding of the world around them.

After September 15, 2008, the fear of “another Lehman” and a deeper financial catastrophe put the United States on the path toward wide-ranging reform. And Lehman was constantly invoked during the European financial crisis that erupted after 2010, highlighting fears of a “death spiral” stemming from state bankruptcies and defaults. Since then, the scare story seems to have lost its effectiveness. In the US, banking reforms are now being undone; and in the European Union, government debt-to-GDP ratios are well above where they were in 2008.

Still, for policymakers and opinion-shapers, the 2008 financial crisis produced three new grand narratives. First, after Lehman, the American economist Charles Kindleberger’s 1978 masterful book Manias, Panics, and Crashes met with a newfound popularity. Kindleberger had drawn explicitly from the American economist Hyman Minsky’s work on financial cycles, and his arguments were read as a warning against “market fundamentalism.”

The second narrative was that Lehman’s failure had made the Wall Street crash of 1929 and the Great Depression newly relevant. Policymakers drew lessons from the interwar years, and successfully avoided a full repeat of that period. During the Great Depression, especially in Germany and the US, the prevailing attitude was that of then-US Secretary of the Treasury Andrew Mellon: “Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate.” By contrast, the response during the Great Recession was to use public debt to replace insecure private debt – an intervention that would prove sustainable only as long as interest rates remained low.

The third narrative held that Lehman’s collapse augured the end of American capitalism. This butterfly-effect story was popular in every country that was tired of being bossed around by the US. As Germany’s then-finance minister, Peer Steinbrück, explained in September 2008: “The US will lose its status as the superpower of the global financial system, not abruptly but it will erode.”

At first, the 2008 crisis was widely regarded as a quintessentially American disaster, owing to the country’s mix of testosterone-driven finance and penchant for promoting home ownership even for those who cannot afford it. Only gradually was it recognized as a truly transatlantic affair. As the economists Hyun Song Shin and Tamim Bayoumi subsequently show, badly regulated, oversized European banks played a key role in the build-up of risk throughout the financial system.

Neither of the first two popular narratives is really correct. The crisis was not a market failure, but rather the product of opaque, dysfunctional non-market institutions that had become perversely intertwined. It exposed the problem of complexity – not of markets as such.

Specifically, the reason that Lehman was such a problem was that it was not really a single corporation. It comprised some 7,000 separate entities in over 40 countries, all of which would need to go through a complex and costly valuation and bankruptcy process. This opacity, which was hardly unique to the US, created the sense that the world was close to another Great Depression when it really wasn’t.

The crisis was the product of escalating short-termism in financial markets. While banks wanted to offload securitized products before they became toxic, other market participants were looking to win on short-term bets, paying little mind to the longer-term viability of the investment. In this sense, volatility was desirable, as it created new opportunities for gain.

After Lehman collapsed, the twin narratives about “market failure” and “another Great Depression” had a massive effect on public perceptions, and fueled the third narrative, which actually happens to be true. America’s financial and political preeminence has in fact waned.

The global primacy of the US was based on economic and political power, but it also depended on something more fundamental: trust in America’s capacity to deliver on its promises over the long term. The crisis undermined that trust, even though US economic and political power remained only slightly diminished. The deeper contagion was intellectual, not financial.

Financial behavior does not occur in a vacuum. The same kind of short-term, hyperactive mindset that felled Lehman was also taking root in the rest of society at the time. Tellingly, the iPhone was introduced in June 2007, just as early signs of the impending crisis were coming into view.

With the smartphone came all kinds of new possibilities. It added dynamism to inchoate social-media platforms like Facebook and Twitter. And it provided the basis for Tinder and other apps which have transformed the social life of millions, pushing dating further in the direction of short-termism and away from longer-term commitment.

The new digital devices and platforms encouraged hyper-individualism. But they also affected political outlooks and behavior, by making it easier than ever to reinforce one’s own views while avoiding alternative opinions. One result, little wonder, is the online culture of demonization, abuse, harassment, and manipulation we see today.

Much of today’s political volatility is a consequence of these new ways of thinking and communicating. Technology and finance adopted the same ethos: destroy continuity and glorify disruption.

Lehman Brothers’ collapse revealed a flaw not just in finance, but in twenty-first-century politics and society. The irony is that, rather than forestalling an era of technologically driven short-termism, the subsequent crisis seems to have accelerated it.

 

NY Times Book Review: Looking Back@Crash of 2008


August 11, 2018

CRASHED

By Dr. Fareed Zakaria

How a Decade of Financial Crises Changed the World
By Adam Tooze
706 pp. Viking. $35.

Steve Bannon can date the start of the Trump “revolution.” When I interviewed him for CNN in May, in Rome, he explained that the origins of Trump’s victory could be found 10 years ago, in the financial crisis of 2008.

“The implosion of those world capital markets has never really been sorted out,” he told me. “The fuse that was lit then that eventually brought the Trump revolution is the same thing that’s happened here in Italy.” (Italy had just held elections in which populist forces had won 50 percent of the vote.)

Adam Tooze would likely agree. An economic historian at Columbia University, he has written a detailed account of the financial shocks and their aftereffects, which, his subtitle asserts, “changed the world.”

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If journalism is the first rough draft of history, Tooze’s book is the second draft. A distinguished scholar with a deep grasp of financial markets, Tooze knows that it is a challenge to gain perspective on events when they have not yet played out. He points out that a 10-year-old history of the crash of 1929 would have been written in 1939, when most of its consequences were ongoing and unresolved. But still he has persisted and produced an intelligent explanation of the mechanisms that produced the crisis and the response to it. We continue to live with the consequences of both today.

CreditTyler Comrie; Photograph courtesy of GSO/Getty Images

As is often the case with financial crashes, markets and experts alike turned out to have been focused on the wrong things, blind to the true problem that was metastasizing. By 2007, many were warning about a dangerous fragility in the system. But they worried about America’s gargantuan government deficits and debt — which had exploded as a result of the Bush administration’s tax cuts and increased spending after 9/11. It was an understandable focus. The previous decade had been littered with collapses when a country borrowed too much and its creditors finally lost faith in it — from Mexico in 1994 to Thailand, Malaysia and South Korea in 1997 to Russia in 1998. In particular, many fretted about the identity of America’s chief foreign creditor — the government of China.

Yet it was not a Chinese sell-off of American debt that triggered the crash, but rather, as Tooze writes, a problem “fully native to Western capitalism — a meltdown on Wall Street driven by toxic securitized subprime mortgages.”Tooze calls it a problem in “Western capitalism” intentionally. It was not just an American problem. When it began, many saw it as such and dumped the blame on Washington.

In September 2008, as Wall Street burned, the German Finance Minister Peer Steinbruck explained that the collapse was centered in the United States because of America’s “simplistic” and “dangerous” laissez-faire approach. Italy’s finance minister assured the world that its banking system was stable because “it did not speak English.”

 

In fact this was nonsense. One of the great strengths of Tooze’s book is to demonstrate the deeply intertwined nature of the European and American financial systems. In 2006, European banks generated a third of America’s riskiest privately issued mortgage-backed securities. By 2007, two-thirds of commercial paper issued was sponsored by a European financial entity.

The enormous expansion of the global financial system had largely been a trans-Atlantic project, with European banks jumping in as eagerly and greedily to find new sources of profit as American banks. European regulators were as blind to the mounting problems as their American counterparts, which led to problems on a similar scale. “Between 2001 and 2006,” Tooze writes, “Greece, Finland, Sweden, Belgium, Denmark, the U.K., France, Ireland and Spain all experienced real estate booms more severe than those that energized the United States.”

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Credit Sonny Figueroa/The New York Times

 

But while the crisis may have been caused in both America and Europe, it was solved largely by Washington. Partly, this reflected the post-Cold War financial system, in which the dollar had become the hyper-dominant global currency and, as a result, the Federal Reserve had truly become the world’s central bank. But Tooze also convincingly shows that the European Central Bank mismanaged things from the start.

The Fed acted aggressively and also in highly ingenious ways, becoming a guarantor of last resort to the battered balance sheets of American but also European banks. About half the liquidity support the Fed provided during the crisis went to European banks, Tooze observes.

Before the rescue and even in its early stages, the global economy was falling into a bottomless abyss. In the first months after the panic on Wall Street, world trade and industrial production fell at least as fast as they did during the first months of the Great Depression. Global capital flows declined by a staggering 90 percent. The Federal Reserve, with some assistance from other central banks, arrested this decline. The Obama fiscal stimulus also helped to break the fall.

 

Tooze points out that almost all serious analyses of the stimulus conclude that it played a significant positive role. In fact, most experts believe it ended much too soon. He also points out that large parts of the so-called Obama stimulus were the result of automatic government spending, like unemployment insurance, that would have happened no matter who was president. And finally, he notes that China, with its own gigantic stimulus, created an oasis of growth in an otherwise stagnant global economy.

The rescue worked better than almost anyone imagined. It is worth recalling that none of the dangers confidently prophesied by legions of critics took place. There was no run on the dollar or American treasuries, no hyperinflation, no double-dip recession, no China crash.

American banks stabilized and in fact prospered, households began saving again, growth returned slowly but surely. The governing elite did not anticipate the crisis — as few elites have over hundreds of years of capitalism. But once it happened, many of them — particularly in America — acted quickly and intelligently, and as a result another Great Depression was averted. The system worked, as Daniel Drezner notes in his own book of that title.

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A trader on the floor of the New York Stock Exchange in February 2009. CreditJames Estrin/The New York Times

 

But therein lies the unique feature of the crash of 2008. Unlike that of 1929, it was not followed by a Great Depression. It was not so much the crisis as the rescue and its economic, political and social consequences that mattered most. On the left, the entire episode discredited the market-friendly policies of Tony Blair, Bill Clinton and Gerhard Schroeder, disheartening the center-left and emboldening those who want more government intervention in the economy in all kinds of ways. On the right, it became a rallying cry against bailouts and the Fed, buoying an imaginary free-market alternative to government intervention.

Unlike in the 1930s, when the libertarian strategy was tried and only deepened the Depression, in the last 10 years it has been possible for the right to argue against the bailouts, secure in the knowledge that their proposed policies will never actually be implemented.

Bannon is right. The crash brought together many forces that were around anyway — stagnant wages, widening inequality, anger about immigration and, above all, a deep distrust of elites and government — and supercharged them. The result has been a wave of nationalism, protectionism and populism in the West today. A confirmation of this can be found in the one major Western country that did not have a financial crisis and has little populism in its wake — Canada.

The facts remain: No government handled the crisis better than that of the United States, which acted in a surprisingly bipartisan fashion in late 2008 and almost seamlessly coordinated policy between the outgoing Bush and incoming Obama administrations. And yet, the backlash to the bailouts has produced the most consequential result in the United States.

Tooze notes in his concluding chapter that experts are considering the new vulnerabilities of a global economy with many new participants, especially the behemoth in Beijing. But instead of a challenge from an emerging China that began its rise outside the economic and political system, we are confronting a quite different problem — an erratic, unpredictable United States led by a president who seems inclined to redo or even scrap the basic architecture of the system that America has painstakingly built since 1945.

How will the world handle this unexpected development? What will be its outcome? This is the current crisis that we will live through and that historians will soon analyze.

Dr. Fareed Zakaria is a CNN anchor, a Washington Post columnist and the author of “The Post American World.”

Follow New York Times Books on Facebook and Twitter, sign up for our newsletter or our literary calendar. And listen to us on the Book Review podcast.

 

A version of this article appears in print on , on Page 1 of the Sunday Book Review with the headline: The Aftershocks.

Jho Low’s Super Yacht –Equanimity– Back in Malaysia


August 7, 2018

Jho Low’s Super Yacht –Equanimity– Back in Malaysia

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https://www.asiasentinel.com/politics/low-taek-jho-yacht-malaysia/

The US$250-million super-yacht Equanimity, which led international authorities on a high-seas chase across half the world before it was seized by Indonesian authorities in February, is expected to be turned over to Malaysia at Port Klang’s Boustead Cruise Center, according to authorities.

Equanimity, launched in 2013 in a Netherlands shipyard, was the brainchild of the youthful financier Low Taek Jho, who at age 28 helped former Malaysian Prime Minister Najib Razak turn an obscure investment fund into 1Malaysia Development Bhd., which became the biggest scandal in Malaysian history, with US$4.5 billion missing to scandal and billions more lost to epic mismanagement.

Najib is now free on bail facing corruption charges, maintaining his innocence, although he is barred from leaving the country. The cherubic Jho Low, as the Penang-born Wharton grad was known in his playboy days, is nowhere to be found. He is listed on Wikipedia as having a fortune estimated at US$1.5 billion.

Jho Low’s lawyer, James F. Haggerty, said in a prepared release that the seizure of the vessel was “a violation of an Indonesian law and court decision by a politically motivated Malaysian government bent on advancing its own political agenda with little regard to existing court rulings or basic legal rights.”

Equanimity, Haggerty said, is owned by Equanimity (Cayman) Ltd and the company was already litigating the matter in Indonesia and the United States. In April, a US judge ruled the yacht could be transported to the US and into the Justice Department’s custody. However, that ruling has never been carried out.

“Mahathir has chosen to bring the asset illegally into a rigged Malaysian system manipulated by a man who only cares about his absolute political rule. It is ultimately justice that suffers,” the statement said.

Finance Minister Lim Guan Eng, the head of the Democratic Action Party, said the vessel would be auctioned off.

News reports in July had Jho Low fleeing Macau, which has been a bolt-hole on several occasions, for China in front of a series of search warrants issued across the planet over his part in the 1MDB scandal.  Malaysian police on July 9 said Macau authorities informed them by email that Low had left the gaming enclave.

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Najib Razak and his cell mate, Jho Low

“The e-mail did not specify when Low left Macau,” Malaysian National Police Chief Mohamad Fuzi Harun told reporters on July 11. “It is hard to trace him as he is believed to be using multiple passports.”

The US Justice Department, which called 1MDB the biggest kleptocracy case in the agency’s history, had been trying to find the yacht since 2016 to add it to the vast list of confiscations it had made in the United States of goodies bought with stolen 1MDB money. Equanimity’s crew turned off the transponders which would allow it to beam its position to satellites and sought waters where G-men couldn’t go, turning up sometimes in New Zealand, sometimes in Macau, sometimes off Korea.

But eventually it turned up in Bali, where the US alerted Indonesian authorities. Jakarta’s notoriously corrupt South District Court blocked the Justice Department’s move to seize the vessel, raising concerns that it might take to the high seas again.

But when the United Malays National Organization and Najib lost the May 9 general election, the game was up. Prime Minister Mahathir Mohamad announced on August 6 in a Facebook post that that “we are happy since the Equanimity yacht has been handed over to us by Indonesia.”

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Miranda Kerr–One of Jho Low’s Playmates

The 90-meter yacht is said in yachting magazines to feature a deck-level Jacuzzi, a sauna, helicopter pad, swimming pool, beach club, beauty salon, zero-speed stabilizers, gym, spa, elevator, movie theatre, tender garage, swimming platform, air conditioning, steam room, Turkish bath, beauty room, underwater lights and owner’s stateroom study, sleeps 26.  Registered in the Cayman Islands, it was at the center of a truly astonishing burst of excess by Jho Low, his Arab Gulf buddies and the Najib family that raised questions how they ever thought they would get away with it.

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The fund got underway in 2008. A couple of years later, Jho Low turned up in New York, buying magnums of Cristal Champagne and pouring it over the likes of Paris Hilton and other blondes. He buddied up with singer Lionel Ritchie and, with Arab friends who turned out to be heavily involved in fleecing 1MDB, staged a moveable feast across Broadway, making the notorious Page 6 of the New York Post, where celebrities go to be photographed.

Vast collections of jewelry, homes in New York and Beverly Hills, airplanes, paintings, a staggering panoply of loot has been sequestered by the US government, including the proceeds from two movies by the production company set up by Riza Aziz, the son by a previous marriage of Rosmah Mansor, Najib’s wife.

Although Malaysia authorities confiscated an astonishing US$193-233 million in jewelry, watches, handbags and other valuables from the Najib family’s homes, as much as RMB100 billion (US$24.8 billion) of funds linked to Najib and his wife, Rosmah are stashed in bank accounts outside Malaysia, according to a source quoted by Sarawak Report, which said much of that money is believed to be in Hong Kong bank accounts, after having travelled through German and Swiss banks.

That leaves the question of what’s become of Jho Low himself. It’s hard to believe Chinese authorities will have much patience with him.

Mahathir thanked Indonesian President Joko Widodo for his cooperation in returning the vessel.  Mahathir visited Jakarta in June.  Ties between Malaysia and Indonesia are close with Mahathir visiting Jakarta in June, his first official tour of the region.