Najib's Secret Deal With China To Pay Off 1MDB (And Jho Low's) Debts 2 Nov 2016 2:18 AM (8 years ago)
FROM SARAWAK REPORT 26 JULY 2016
OUTRAGE! - Najib's Secret Deal With China To Pay Off 1MDB (And Jho Low's) Debts! - SHOCK EXCLUSIVE
- 26 July 2016
- 284 comments
Marked “For Internal Use Only” an Appendix to a Term Sheet due to be approved by the Malaysian Cabinet tomorrow (27th July) lays out in detailed figures how Najib plans for over US$7 billion in accumulated 1MDB/Jho Low company debts to be wiped out by taxpayers in a secret deal between his Ministry of Finance and the Chinese state company CCCC (China Communications Construction Company).
The PM’s ‘cunning plan’ is to get the Malaysian Government to agree to inflate the actual cost of the East Coast Rail Project from only RM30 billion to RM60 billion, all to be borrowed from the Chinese Government, in order to disguise the payment of 1MDB’s (and Jho Low’s) company debts!
Sarawak Report can reveal the secret figures behind the deal, which has been inflated 100% to hide the payments for 1MDB!
A whistleblower, who has supplied full details of the project, described the plan to Sarawak Report:
“The Malaysian Government is planning to award an overvalued project to launder money in order to fill the loophole of 1MDB.
The plan is to award the East Coast Rail Project to a Chinese Company, China Communication Construction Company Limited (CCCC). The initial budget for the project is MYR 30b, but they have overvalued the project for another MYR 30b, making it MYR 60b. The extra MYR 30b will be use to launder out cash to 1MDB related companies.
The project has been proposed to the cabinet on 25/7/2016 and will be approved by the cabinet on 27/7/2016 with total value of MYR 60b.
The Chinese company, which is backed by the China Government, will help pay off the 1MDB dept in advance and progressively. In return, this Chinese company will be rewarded with high profits and land, and of course extra influence with the Malaysian government”.
Doubling the cost of mega-project
The outrageous plan is blatantly laid out in the term sheet and internal report, which have been leaked to Sarawak Report.
The report says baldly that the actual cost of building the railway, has only been estimated by CCCC at RM27 billion. However, there is to be a so-called “Additional Differential” cost of RM29.85 billion, which will more than double the cost to make a total bill of RM60 billion, including a fat percentage of profit for the company (handily based on the total and not just the construction costs):
Najib plans to double the cost of the Railway to RM60 billion to hide his 1MDB missing money
The company makes no bones about the incentives provided by the Malaysian Government in this “Direct Contract”, meaning that there was no open tender to get the best deal for the project.
CCCC says it has been given land on generous terms, including a chunk of land which was given cheap by Najib to 1MDB, then inflated in value at Ayer Item – the land which is valued at US$1.3 billion will be offered to CCCC for US$850 million.
CCCC will also gets tax breaks including from GST for the next ten years. And then, as a Chinese State-owned company CCCC notes the benefit of the extended influence over Malaysia the project and the massive loan of the cash (at a generous 2% interest rate) will provide.
So much for Najib Razak’s much vaunted ‘inward investment’ plans from fellow Islamic countries and his stirring of hatred against the so-called ‘Chinese Tsunami’!
What is in this deceitful deal for the Chinese? Just take a look!
Sneaking 1MDB’s debts into the project
The quid pro quo for the Chinese partners in this lucrative deal is to assist in Najib’s corrupted exit strategy for getting shot of his multi-billion dollar debts at 1MDB at a total cost of US$5.63 billion!
The first priority being to get 1MDB off the hook over its outstanding payments to Abu Dhabi’s IPIC. In the first instance this will be achieved through the payment of the $850 million to 1MDB for the Ayer Item land, but after that the company will assume the repayment of the remaining debts for the disastrous ‘power purchase’ and ‘strategic partnership loans’ which lost billions (mainly stolen).
The Malaysian taxpayer will of course have to pay the whole lot back with interest over the next 7 years in payments, all planned to be disguised by the inflated Rail Project!
Sneaking a write off of 1MDB’s debts in an up-front payment
Laughably, this outlay is set to be disguised by a repayment in ‘assets’ valued to the same amount of US$5.63 billion. The assets concerned are largely duds – vaunted ‘liquid and cash assets’ tucked away by 1MDB in dodgy bank accounts, including the 1MDB Brazen Sky account at BSI (alleged worth $940 milllion) and also the supposed assets of 1MDB Global at BSI, (alleged worth US$1.56 billion).
Significantly, we note that the 1MDB Global money, which was raised through a Goldman Sachs loan, is now also described as ‘Units’, raising the probability that these are in fact worthless pieces of paper representing bogus investments, similar to the ‘Units’ in Brazen Sky, which would imply, that like the PetroSaudi funds, the billions raised by 1MDB Global have all been stolen:
Worthless ‘units’ from Brazen Sky and 1MDB Global are being dumped into the deal as if they had been ‘bought’, whereas in fact all costs are being separately covered by the ‘additional items’ on the inflated projected
List of Payments totals US$7.5 billion/ RM29.8 billion
Just last week the United States DOJ explained in searing detail how all that missing 1MDB money, which is now being sneaked onto the East Coast Rail tab, was stolen by Najib and his family and associates, including Jho Low and IPIC’s Khadem Al Qubaisi, to be spent on gambling, drinking, jets, yachts, record-breaking fine art purchases(in many cases depicting under-dressed female forms).
The report sheet in our possession lays out in precise detail what CCCC/The Chinese Government has agreed to funnel through the project, in order to get Najib off the hook on all his problems.
The astonishing list contained in an Appendix to the agreement is clearly costed and totals over US$7,5 billion. It includes writing off 1MDB’s debts to the Abu Dhabi sovereign wealth fund IPIC, which is currently suing 1MDB to the tune of US$6.5 billion over unpaid guarantees.
RM30 billion ‘Added Differential’ ie bail out for 1MDB and Jho Low
Bailing out Jho Low’s companies also!!
Significantly, the list also includes an agreement to buy out two Jho Low related companies, which have long been suspiciously associated with Najib’s record of personal plunder from 1MDB. These are Loh & Loh Corporation Berhad and Putrajaya Perdana Berhad, for which Jho Low and his partners will receive a healthy US$315 million:
Jho Low related companies which funnelled money to Najib are also in the secret bail out package!
Sarawak Report has long since exposed how Jho Low used 1MDB money, which was secretly channeled through a so-called Islamic loan agreement with the company PetroSaudi to ‘buy out’ the Sarawak UBG group in which he and Taib Mahmud held the major stakes.
The purported buyer was Javace Sdn Bhd, a supposed subsidiary of PetroSaudi International, Seychelles (a bogus subsidiary of PetroSaudi, whose Director was Tarek Obaid, also a director of PetroSaudi). However, secret transactions obtained by Sarawak Report showed that all the money in Javace was controlled by a company Panama Investment Manager, which was owned by Jho Low.
The two subsidiaries of UBG Putrajaya Perdana and Loh & Loh are still identified as crony companies controlled by Low and Putrajaya Perdana was identified by investigators as having played a key role in funnelling cash from 1MDB’s subsidiary SRC into Najib’s own personal accounts:
The diagram held up by Attorney General Apandi showing Putrajaya Perdana’s role in passing public money to Najib
Plainly therefore, Najib hopes to use his over-reaching powers at the MOF/PM’s office to launder all his dirty linen through the same simple mega-project, courtesy of secret and politically motivated Chinese cooperation.
Public estimate leaves out the 1MDB costs and commitments?
A huge sum of RM85 million is also put aside in the contract for a ‘nominated company’ to be awarded a “publicity” and “communications” and “strategic consultation” role on the project – no guesses that this will go to a crony outfit.
Finally, also attached to the papers is a totally conflicting set of calculations, which are not listed as being “only for internal consumption” and which appear to represent the public face of the planned deal. These consist of a broad-brush, ‘back of the envelope’ set of figures, which provide a broad estimate for the project at the fuller figure of RM60 billion.
In this list there is no mention of any of the costs due to be carried for 1MDB!
Public figures? How the same project is being costed at RM60 billion, but with no mention of 1MDB
The agreement is due to be passed by Najib’s compliant cabinet….. about now!
From Sarawak Report:How Jho Low Used 1MDB Cash To Fund Rosmah's Diamond Shopping Sprees 22 Aug 2016 9:23 PM (9 years ago)
FROM SARAWAK REPORT
- How Jho Low Used 1MDB Cash To Fund Rosmah's Diamond Shopping Sprees
- How Jho Low Used 1MDB Cash To Fund Rosmah's Diamond Shopping Sprees
More recently designerNatasha Mirpuri has taken on the role as ‘buyer’ for Rosmah’s jewellery purchases, however before her it was Jho Low.
Last month’s filing by the US Department of Justice confirmed the money trail, which had long been suggested by Sarawak Report, linking Jho Low’s mysterious role in funding the ‘First Lady’s’ obsessive diamond shopping with money he stole from 1MDB.
Our research in Hong Kong, a favourite jewellery haunt of Rosmah Mansor’s, revealed that by 2009 most of the money to settle Rosmah’s bills was coming via Jho Low.
Insiders from the industry explained to SR that the original ‘link man’ between traders and Rosmah was the former Malaysian carpet trader Deepak Jaikishan, something that has been extensively exposed and admitted to by Deepak also.
However, in 2009, after Najib became Prime Minister and set about putting together 1MDB, it was Jho Low who started organising such payments, traders say.
He was the man to go to and emails seen by Sarawak Report confirm that he utilised his relationship managers at Coutts Bank Singapore for the purpose, including Yak Yew Chee, who moved on to manage the corrupt 1MDB/Jho Low accounts currently being investigated at the now closed Singapore branch of BSI Bank.
Yak organised transfers for jewellery purchases for Low in 2009
Sarawak Report earlier revealed how Jho Low’s company Batumba Investments Limited Hong Kong, which was a subsidiary of his then main business Wynton Capital, paid millions of dollars to a subsidiary of the New York jeweller Louis Glick called Rose Trading in Hong Kong to pay for Rosmah’s diamonds.
Transfer details of one of the payments sent to the relevant dealers
A related email from Jho Low ran ““Hi….please confirm receiving 1 million in total.. Datin is coming to Hong Kong. Do you want to show her more goods?”.
The transfers were run through Coutts as emails seen by Sarawak Report confirm:
Fwd Payment advice to Rose Trading USD1,000,000
From: Lee Julia (RBS Coutts, SG)
To: jho.low@gmail.comDear Mr Low,Thanks
Julia Lee (attachment)
Speaking to traders again last week Sarawak Report has confirmed that in late 2009 the series of purchases from Rose Trading had amounted to no less than $3 million. They added that another $1.7 million was paid to another Hong Kong jewellery outlet called Firestone.
DOJ confirm the 1MDB link
However, it was the DOJ filing last month which tied these purchases directly to money taken from 1MDB via the theft by Jho Low’s company Good Star Limited from the original ‘joint venture’ with the company PetroSaudi.
Amongst a bacchanal of expenditures towards Jho Low’s gambling and partying was listed that telling payment to Rose Trading:
“between October 2009 and October 2010, misappropriated 1MDB funds sent from the Good Star Account into the Shearman IOLA Account were transferred as follows: (i) approximately $12,000,000 in wires to Caesars Palace, a Las Vegas casino; (ii) approximately $13,400,000 in wires to the Las Vegas Sands Corp., the owner of the Venetian Las Vegas, another casino; (iii) a wire for approximately $11,000,000 to “Eric” TAN Kim Loong, an associate of LOW; (iv) approximately $4,000,000 in wires to Jet Logic Ltd., a luxury jet rental service; (v) a wire for approximately $3,500,000 to LOW’s sister; (vi) a wire for approximately $3,080,000 to Rose Trading, a Hong Kong jeweler; (vii) approximately $2,698,000 in wires to Yachtzoo, a luxury yacht rental service; (viii) approximately $2,288,000 in wires to Argent Design Ltd., a United Kingdom-based interior designer; (ix) a wire for approximately $670,000 to Excel Air, a jet rental company; (x) approximately $460,000 in wires to Skyline Private Air, an aircraft rental company; and (xi) a wire for approximately $155,000 to Billiyon Air, a jet rental company. [Section 108 DOJ Report]
From this information we can now join up how the 1MDB ‘investment’ went from Good Star Limited, first to Low’s US lawyer’s client account at Shearman, then eventually to Batumba Investments Limited and then on to Rose Trading.
“He should remember it’s my money too!”
The confirmation that Rosmah’s diamonds were bought using 1MDB cash, follows hard on the heels of ourearlier story that she paid for millions of ringgit of beauty treatments also from public money stolen from the 1MDB subsidiary SRC International, which had been funded from a loan from the public pension fund KWAP.
At the time stories about Jho Low’s gargantuan spending were hitting the news in the US and Malaysia. One confidante of the time has related that Rosmah had exploded on reading some of the coverage:
“He should remember its my money also!”
the First Lady angrily exclaimed. At the time her listeners were not certain as to what she had meant. But, now everyone knows!
$600 million yacht for sale – discounts likely
Major re-fit before sale in Hong Kong?
Meanwhile, the Hong Kong press have taken up Sarawak Report’s information that the yacht Equanimity is in the port and on offer for sale.
The South China Morning Post confirms that the boat has had a major re-fit in their docks and that a local agent has been engaged with a view to an apparent sale.
All parties say they have been forced to sign non-disclosure agreements, but have indicated that the ‘mystery owner’ of the yacht is eager for a quick sale.
Although Jho Low has treated the yacht as his own ever since he acquired it in 2013, hosting a massive party to celebrate his own birthday back in November together with a fundraiser for the UN foundation, Sarawak Report asks if perhaps the actual ownership of the boat is also a little more complex than might first appear?
That the money came from funds stolen from Malaysia can be of little doubt however and the boat ought by rights to be seized and sold by investigators in Hong Kong, who have stated that they are working together with the DOJ and other global agencies who have been working to retrieve 1MDB’s stolen assets on behalf of the Malaysian people.
It’s a job that Malaysia’s own government has been notably failing to undertake itself.
Off the coast in Hong Kong
FROM SARAWAK REPORT:The Link Between 1MDB And The Billion Dollar Nightclub Chain In Vegas 18 Aug 2016 8:03 AM (9 years ago)
The Heat Is On Hakkasan - We Reveal The Link Between 1MDB And The Billion Dollar Nightclub Chain In Vegas EXCLUSIVE!
- 17 August 2016
- 16 comments
Hakkasan nightclub promotional
Sarawak Report has traced crucial evidence linking the Luxembourg bank accounts, which received hundreds of millions of dollars stolen from 1MDB, with the global Hakkasan nightclub and restaurant chain centred in Las Vegas.
Both the bank accounts, held in the name of Vasco Trust, and Hakkasan are owned by the former Aabar Chairman Khadem Al Qubaisi, who is now the subject of civil seizures of his assets by the US Department of Justice, relating to 1MDB thefts, and also a criminal investigation in Switzerland for suspected “fraud, dishonest management, forgery, money laundering, abuse of public trust and the corruption of foreign officials”.
Sarawak Report has now established a direct link between Vasco Trust and the Al Qubaisi-owned Tasameem Real Esate Company LLC, which is the shareholder of Hakkasan, meaning that Hakkasan is not ‘ring-fenced’ from 1MDB, as has been claimed by the managers of Hakkasan.
In fact one of Vasco’s subsidiaries (Vasco Strategic Fund) was even re-named to become an affiliate of Tasameem (Tasameem Strategic Fund) and it has been managed throughout by Khadem’s key bank manager cum company director, the former Edmond de Rothschild Luxembourg Bank CEO, Marc Ambroisien (who was registered as a Director as late as November 2015, according to BVI court documents).
Vasco Strategic Fund (whose Director is Marc Ambroisien) changed name to become part of the Tasameem group of companies, providing a link in the money trail from 1MDB to Hakkasan.
The name switch provides a direct link between the Vasco account, which received all its money from 1MDB in 2012/13 and Tasameem, which by 2016 had registered a $566 million shareholder loan facility to its subsidiary Hakkasan.
Indeed Hakkasan’s 2013 accounts, signed off by Al Qubaisi himself, show that by the end of 2013 the Hakkasan Group had already received $266,000,000 in ‘shareholder loans’ from its parent company, which was cited as Tasameem, which is itself also owned by Al Qubaisi:
By 2016 the amount owed to Shareholder Tasameem had increased to $566 million, according to the accounts
2013 was the year during which the nightclub chain rapidly expanded with its first key acquisitions in Las Vegas, starting with the Omnia nightclub having opened in April.
Records show the case was filed by Marc Ambroisien in November 2015, when he described himself as a Director of Vasco/Tasameem Strategic Fund
How Vasco Strategic Fund SPC (Caymans) became Tasameem Strategic Fund (BVI)
We revealed ‘KAQ’s’ other life and his love of clubbing
It was Sarawak Report which originally revealed in March last year that over $500 million had been transferred into Khadem Al Qubaisi’s private account, under the name of Vasco Trust, at the Edmond de Rothschild Banque Privee Europe (BPERE) in Luxembourg.
Some of that money was then transferred to the US to buy Al Qubaisi’s Walker Tower penthouse in New York and a Beverley Hills mansion, for which the DOJ have issued a seizure notices.
The Vasco money all came from Jho Low entities, including Good Star Limited and an apparently fictitious character named ‘Prince Faisal bin Turkey bin Bandar Alsaud’, which was also used to send money to Najib in KL.
The original payments into the Vasco Trust account, which were all transferred from 1MDB via Aabar’s Falcon Bank and Jho Low companies like Blackstone Asia Real Estate Partners
However, most of the money acquired by Vasco came from a bogus BVI company named Blackstone Asia Real Estate Partners, which the DOJ indictment last month specifically confirmed received $473 million stolen from the two 1MDB ‘power purchase’ loans raised in 2012, using a ‘guarantee’ provided by Al Qubaisi’s Aabar fund in Abu Dhabi.
The DOJ indictment spells out exactly how the power purchase money was stolen – much of it going to the Vasco Trust account – this is our pictorial representation of the information
The DOJ have explained in detail how $1.367 was misappropriated from the two power purchase loans raised in May and October of 21012 totalling $3.5 billion, during the so-called ‘Aabar-BVI Phase’ of the billion dollar 1MDB scam.
Falcon Bank was this week barred by Singapore from conducting future business, owing to its role over 1MDB
As shown in the diagram, Goldman Sachs, which had raised the money, first sent the lion’s share of the cash directly to 1MDB accounts held at Falcon Bank in Singapore, which was itself a subsidiary of the Aabar sovereign wealth fund of which Khadem Al Qubaisi (KAQ) was Chairman.
KAQ’s deputy Mohammed Al Husseiny was at the time Chairman of Falcon Bank.
Of this money a total of $1.4 billion was transferred on to the now notorious bogus ‘Aabar BVI’ account, which was held at BSI Bank in Lugano. BSI has already also been shut by Singapore.
Meanwhile, the Abu Dhabi IPIC sovereign wealth fund, of which the genuine Aabar is a subsidiary, has confirmed it had no knowledge of the diversion of this cash, which had been paid under the guise of it being a ‘refundable deposit’ for the ‘guarantee’ arranged by Aabar for the loans.
Neil Moffitt, CEO of Hakkasan, has claimed there is no 1MDB money in the group
From this moment on the money was effectively stolen and the theft could not have taken place without the connivance of KAQ and Husseiney, who were in charge of the genuine Aabar as well as being the shareholders and signatories for the bogus Aabar BVI.
The money was then passed mainly to another bogus company, Blackstone Asia Real Estate Partners, this time controlled by Jho Low.
Some also went to Najib’s step-son Riza Aziz’s film production company Red Granite.
From Blackstone, it has been established that around one third of the stolen cash was transferred to Al Qubaisi’s Vasco Trust by early 2013.
The Edmond de Rothschild head banker who oversaw the deal
Marc Ambroisien – now fired from de Rothschild and this week at last resigning from KAQ’s private ventures also
The man who smoothed the path for this enormous sum of money was the Edmond de Rothschild CEO, Marc Ambroisien, who told KAQ in a recorded phone call that any other bank “like HSBC” would have frozen and reported such a suspicious series of transfers.
However, he was prepared to fix it and could do so, given his position at the private De Rothschild bank.
One week after Sarawak Report reported the existence of the Vasco Trust account in March 2015, Ambriosien, a former French tax inspector, left his position at the Bank Privee Edmond de Rothschild.
However, for over a year he remained managing ‘KAQ’s’ private ventures.
Ambroisien was fired from Edmond de Rothschild, but stayed on managing KAQ’s companies
Until just days ago Ambroisien was a Director in charge of a web of Vasco related companies, according to company information in France and elsewhere. Various arms of the Trust have controlled different interests for Khadem Al Qubaisi.
Of particular relevance to the Hakkasan empire was a so-called umbrella investment arm called Vasco Strategic Fund SPC, originally incorporated in the Cayman Islands in 2011.
Vasco Strategic Fund was incorporated in 2011
Sarawak Report has obtained back statements relating to KAQ’s Vasco Trust, which include transactions by Vasco Strategic Fund, dating back to its ‘setting up fees’ in February 2011.
KAQ’s Vasco Trust statements include payments relating to Vasco Strategic Fund
The Tasameem Connection
Court documents available from the BVI show that late last year the former Edmond de Rothschild CEO Marc Ambroisien made an application on behalf of a separate company (Ourea S.A.) in his capacity as a Director of Tasameem Strategic Fund.
The document makes clear throughout that Tasameem Strategic Fund BVI was formerly Vasco Strategic Fund in the Cayman Islands.
In November 2015 Marc Ambroisien remained a Director of Tasameem Strategic Fund, linked directly to the trust which received hundreds of millions from 1MDB
While Ambroisien was no longer acting for KAQ’s de Rothschild bank accounts by this date in November 2015, he was still managing many of KAQ’s private interests. He appears to have started resigning from those positions in favour of his boss only in the last few days (see below). Khadem Al Qubaisi, meanwhile remained the Chairman of Hakkasan right up until April of this year.
Ambroisien only resigned from KAQ’s private companies, such as this French property company, a few days ago
Plainly, therefore, Vasco and Tasameem have been linked to the same sources of income and the same management.
Tasameem still owns Hakkasan, according to its public accounts filed in the UK in May this year (which were signed off by the new Board members appointed after Khadem Al Qubaisi resigned April 19th).
‘Ring-fenced’?
Sarawak Report therefore questions claims by Hakkasan that its investments are ‘ring-fenced’ from money stolen from 1MDB and that there is no connection between the entertainment group and its owner (KAQ’s) other financial interests.
Hakkasan’s accounts, which are filed at Companies House in London, state specifically that the owner of the company is Tasameem Real Estate Company, which along with other affiliated companies of the same name belong to Al Qubaisi.
New board member, Senator Norm Coleman – can he vouch there is no 1MDB cash?
The accounts also specify that much of the investment into the group has come from a $566 million ‘shareholder loan’ provided by Tasameem.
In fact, the expenditures into the Hakkasan group are estimated to have been well over a billion dollars since it began its massive and rapid expansion, beginning with the opening of the Omnia nightclub in Vegas in April 2013.
Since it is now established that a subsidiary of Vasco Trust subsequently became an affiliate of Tasameem, both managed by the former bank manager who managed Khadem Al Qubaisi’s affairs (until he finally resigned a few days ago), it is plain that there are indeed direct links between Hakkasan and Khadem’s 1MDB funded operations, meaning money could have flowed between them.
Troubling timelines
The concerns about Hakkasan’s more than abundant sources of cash are heightened by some troubling timelines. The Hakkasan brand was bought up by KAQ as a relatively small restaurant concern in London in 2007 for £69 million.
In early 2013 the major expansion into the Vegas nightclub scene began – just a few months after the millions started arriving into the Vasco Trust from 1MDB.
As late as last month the group was still promoting its on-going expansion and also the fact that it is still owned by Tasameem:
The Holmes Report July 2016
Given that Sarawak Report has already established that Khadem Al Qubaisi, together with his brother owns Tasameem Real Estate Company and that he is the sole shareholder of its affiliateTasameem Investment S.A. BVI, there remains the question as to how a salaried fund manager obtained $566 million to invest as a shareholder loan in this nightclub company?
Latest 2015 accounts show the current shareholder loan is $566 million
Sarawak Report believes, therefore, that the global investigators who are examining Mr Quabaisi’s financial affairs ought soon to be turning their interest to Hakkasan’s billion dollar business.
KAQ signed off Hakkasan’s 2013 accounts
FROM SARAWAK REPORT: As Najib Denies All Over 1MDB, Let's Not Forget His Many Other Criminal Connections 7 Aug 2016 3:48 PM (9 years ago)
- 6 August 2016
Najib has claimed on TV that the US indictment did not involve him nor 1MDB:
“I want to say that what was done by the DOJ recently does not involve me, or the Malaysian government, or 1MDB directly….This is not a criminal suit, but a civil suit… but it has been politicised by certain enemies”. [Najib on Indonesian Metro TV]
Contrast the above with the actual indictment by the DOJ, which in fact refers to criminal actions throughout, although it has instituted civil action to forfeit proceeds of crime in the United States. For example:
“.. multiple individuals, including public officials and their associates, conspired to fraudulently divert billions of dollars from 1MDB through various means, including by defrauding foreign banks and by sending foreign wire communications in furtherance of the scheme, and thereafter, to launder the proceeds of that criminal conduct, including in and through U.S. financial institutions”.[‘Nature of the Action’ Point 6, DOJ Indictment]
It doesn’t get plainer that that. From the above you can see that the DOJ indictment implicates public officials in Malaysia (specified as being led by Najib) in criminally and fraudulently stealing billions from 1MDB and then criminally laundering the money.
The suit does involve Najib. It does involve 1MDB. It does allege criminal behaviour and major fraud:
“The criminal conduct alleged herein occurred in three principal phases: The “Good Star” Phase… The “Aabar-BVI” Phase …. The “Tanore” Phase… The proceeds of each of these three phases of criminal conduct were laundered through a complex series of transactions, including through bank accounts in Singapore, Switzerland, Luxembourg, and the United States.” [DOJ indictment]
As for that “Tanore Phase”, the DOJ gets very personal indeed with regard to the Prime Minister (termed ‘Malaysian Official 1′) who we all know admitted over a year ago to receiving US$681 million into his private AmBank account from Tanore Finance Corporation, claiming it had been a ‘donation’ from an anonymous ‘Saudi Royal’ towards his 2013 election campaign.
This is what the DOJ has to say about that money and there is zero reference to any Saudi Royal:
$681 MILLION WAS TRANSFERRED FROM THE TANORE ACCOUNT TO AN ACCOUNT BELONGING TO MALAYSIAN OFFICIAL 1Shortly after proceeds of the 2013 bond sale were diverted to the Tanore Account, $681,000,000 was sent from the Tanore Account to a bank account belonging to MALAYSIAN OFFICIAL 1.On or about March 21, 2013, Tanore transferred $620,000,000 into an account at AmBank in Malaysia, whose beneficiary was listed as “AMPRIVATE BANKING-MR.” On or about March 25, 2013, an additional $61,000,000 was wired from the Tanore Account to the same account at AmBank, for a total of $681,000,000.This account belonged to MALAYSIAN OFFICIAL 1 and is the same account that in 2011 received $20 million from the PETROSAUDI CO-FOUNDER that was traceable to the Good Star Account, as set forth in Section II.G. It is also the same account that in 2012 received at least $30 million from the Blackstone Account that was traceable to the Aabar-BVI Swiss Account and the 2012 bond proceeds, as set forth in Section III.E.3. [Section 259-61 of DOJ indictment]
So, when Najib appears on TV and says he has not been implicated in the DOJ report and that nothing criminal has been alleged, who can believe him?
Najib’s ‘Pirate Government’
Unfortunately, this pampered son of a former Prime Minister has got away with far too much for far too long and he seems to think he can treat this as merely another skirmish, whether anyone believes him or not.
He has boasted of his ‘proud pirate (Bugis) ancestry’ and those around Malaysia’s ‘First Couple’ privately confide they have nicknamed them Bonnie & Clyde. Najib should probably be dubbed ‘The Cover-up Kid’ given his list of scandals, all “fixed” by tame officials and judges – more of which shortly .
Yet, all gangster stories end in flames and with the DOJ findings it is plain to most players now that this particular pair have reached their last shoot out. Pumped up with adrenalin (and hormones too) the question is whether they themselves have yet absorbed the realities of their situation?
The couple have told their teamsters that they can still brazen this out and come out stronger, emergency legislation now to hand. Rosmah is on the phone all day long, report insiders, calling all their ministers to step out and speak up in support. The few who have done so either have no political future or plainly don’t care if they once did.
“Mrs 10%” – What western bankers dubbed Rosmah!
1MDB is just the latest episode in a political career that should rightly have ended long before Najib Razak got anywhere near the top job. He was already tarnished for all to see.
For years Najib was a notorious Minister of Defence, for which western governments and arms sales must take their share of blame. It was, as always, the Malaysian people who paid the price for pumped-up prices – Rosmah was never far away and never accepted a commission of less than 10%, insiders say.
For example, one senior French banker from a major Asian division reminisces how in 2009 in the Presidential Suite at the 5 Star Plaza Athene Hotel in Paris he witnessed procedures at the close of one such major deal.
“Najib moved rooms so that the ‘commission’ could be dealt with and he observed a large suitcase stuffed with millions of dollars being offered to Malaysia’s Defence Minister“, says a source. “In turn, Najib waived to staff to take it to another nearby room …… where Rosmah was waiting. Within minutes, she was out of the place, police escort in tow, sirens wailing, to the diamond shops of the Faubourg St Honore“.
No wonder Najib acts bewildered to find how times have changed. “These things are done more quietly” he complained of the US action last week.
Even the French have named him in separate legal action as the suspected recipient of kickbacks over the Scorpene submarine scandal.
Najib has told Malaysians, of course, that he has not been named, but look at how it was reported in the French press:
“The ex-president of a subsidiary of Thales, is suspected of having corrupted the present Prime Minister of Malaysia. Bernard Bioco, 72, ex-president of Thales Int Asia was put under criminal investigation on 15th sept 2014 concerning bribery of foreign public officials namely Najib Razak, the then Minister of Defence and one of his advisers Abdul Razak Baginda” [Le Point and other newspapers]
Suspected of bribing Najib over Scorpene… French court investigation
Attached to this murky submarine story is the well-known shocking murder of the translator on the deal, Altantuya Shaariibuu (who had threatened to reveal information on those very kickbacks).
Najib was comprehensively demonstrated over the subsequent court proceeding as having been up to his eyes in a legal cover-up, revelations that ought to have ended the career of any politician.
Instead the blame has been put on the shoulders of two of his own bodyguards, who were instructed to kill Altantuya by someone still anonymous and who languish in jail facing sentence of death.
Too many followers – Najib lied about his role in Anwar’s conviction
Anwar
But, there is another more current and pressing scandal that Malaysians should no longer continue to tolerate now their Prime Minister has been demonstrated so comprehensively to be a major thief and liar. That, of course, is the continued incarceration of Malaysia’s opposition leader, Anwar Ibrahim, in a case that was cooked up by Najib from beginning to end.
The evidence is overwhelming that Malaysia’s present Prime Minister was up to his neck in the conspiracy to accuse the man who most threatened him politically of a crime designed to lose him the greatest possible political support.
And Najib has been caught out lying over and again over this involvement.
For this reason alone the plainly politically motivated prosecution ought to have been thrown out of court…. and indeed so it was. After a vicious and protracted trial Anwar was resoundingly acquitted in the High Court.
However, Najib was not prepared to accept an acquittal of his political enemy, particularly since Anwar had just won the majority of votes at the General Election.
The PM ordered an Appeal against that acquittal and then he ordered a conviction – the hand-picked judiciary at the top of Malaysia’s eroded judicial system complied with this irregular request, a sad indicator of the country’s institutional decline.
Najib changed his story, not once but twice
Consider how disgraceful the main facts of this case are, from the evidence in court.
Months and years of dragged out legal wrangling have conveniently blurred memories and confused foreign observers of the case, for Najib.
However, it has been firmly established that Najib himself met the ‘victim’ at his house shortly before the complaint of sodomy was filed in June 2008, just after Anwar had caused shock waves with a landslide towards the opposition in the March election.
At first the Prime Minister lied and said he had not ever met the young worker from Anwar’s office. But, when a photograph appeared showing the man inside Najib’s home he changed his story and explained that Mohd Saiful had pitched up three months earlier to talk about student grants (as one does with the then deputy Prime Minister).
In fact Saiful was already a student drop-out, although he had been active in BN while at college before applying to join Anwar’s team just before the March election.
It was only after Saiful admitted under court questioning that he had discussed the issue of alleged sodomy with Najib in his house in June, just a two days before the alleged incident, that the DPM changed his story for a third time and admitted that he had indeed discussed the matter with Saiful and that yes, the lawyer and later prosecutor on the case Shafee Abdullah was also in the house at the time.
Najib acknowledged in this third version of events that he had advised Saiful to go and lodge a police report.
Saiful also admitted under further questioning that the day before the alleged incident he had also held a secret meeting with a police chief in the Concord Hotel in KL. Assistant Commissioner Rodwan Mohd Yusof had a long grudge against Anwar, who accused him of framing him during his previous arrest and imprisonment. Again the case was not thrown out.
Even so, it was two days after his visit to Anwar’s house and the alleged incident took place that Saiful took himself first to a private clinic to complain of sodomy. The doctor could find no evidence of interference, but when Saiful complained there had been crime involved the doctor sent him for full examination at a public hospital.
The doctors at the public hospital could find no evidence of any interference either, as would have been expected, but since Saiful claimed he had not washed or defecated in the two days since the alleged incident they took sample to check for DNA.
There was great mystery and confusion over what happened next as delay in the arrival and analysis of these samples appears to have occurred, according to Australian barrister Mark Trowell who has written about what he describes as a travesty of a legal case. The prosecution refused to provide details about how they acquired and processed their ‘evidence’.
The entire case was conducted against a backdrop of politicking and further accusations of a sexual nature against Anwar by BN, this time allegedly involving a female prostitute and a video without a properly identifiable face.
Unsurprisingly, after months of this nonsense the High Court Judge through out the prosecution and acquitted Anwar. In any normal country that would have been the end of the matter, as the process of appeal is reserved for the defendant and not the prosecutor, who has failed to prove his case to the judge and jury (sadly the latter institution was abolished in Malaysia).
But, in Malaysia no. Najib was by this time Prime Minister and he drove through an appeal by the prosecution to the higher courts, where BN have control over top appointments. Over the next two years and in the aftermath of a triumphant 2013 election result by Anwar Najib got the judges of the Federal Court to present the judgement he was after – a guilty verdict that would force his foe from politics.
That night a sick and sickened pilot drove his plane out over the Indian Ocean and ditched it in – Najib should take his share of the blame for that as well.
Are Malaysians to sit an tolerate a situation where a disgraced thief and liar has succeeded in driving the opposition leader into jail in a case he masterminded himself from start to finish?
To be even more sure of controlling the case, the self-same Shafee Abdullah, Najib’s close legal associate, who attended that first meeting with the ‘victim to be’ in Najib’s house, unaccountably replaced the normal prosecution barristers on the case as a private prosecutor hired by the government during the final appeal hearings.
Najib has worked to exploit the leaderless situation confronting the opposition ever since and BN/UMNO smugly talk of divisions faced by the party they deliberately decapitated. He has gone on to “woo” the PAS Islamic party away from the opposition coalition in the normal way he woos – RM90 million is widely reckoned to have flowed into the top echelons of PAS in recent months (BN veterans would tell them they came cheap).
To sugar matters further for PAS, Najib has gone on a crusade to show himself ‘more holy than thou’ on every PAS religious agenda, stirring up extremism in Malaysia and undermining civil law and institutions, without turning a single hair over the destabilising, divisive and dangerous consequences to his country and his own party.
He thinks it’s clever. If a man has no charisma to attract his followers he buys them, whatever it takes.
Najib’s next target it the other powerful centre of political opposition, which is the well-run DAP party, which enjoys a strong support for its reputation for integrity. The Prime Minister has adopted his preferred technique of legal persecution, abusing all his powers to accuse DAP’s leader of the crime with which he himself is most associated, corruption.
Malaysia now faces the spectacle of their own most corrupted world leader, caught out stealing billions, going after a state leader over paltry and flimsy accusations of an alleged cheap deal to buy his modest house.
With Guan Eng in jail alongside Anwar, PAS on the pay-roll, all his critics sacked and his emergency powers in place, Najib plainly reckons he can pull off another “election win”.
Can Malaysians tolerate more of this and more graft and squander by his pumped up, hormone abusing wife?
No wonder Najib’s own family, his former patron Dr Mahathir and so many others from his own BN party (none saints themselves) have fallen away in shock and disgust from this man supposedly ‘born to lead’. They know him best.
Malaysians should team up to reject Najib. Next they can fight for reform.
- THE SARAWAK REPORT
From SARAWAK REPORT: THE TRANSLATED VERSIO INTO BAHASA MALAYSIA OF US JUSTICE DEPARTMENT'S LAWSUIT... IN PDF FILE, 131 PAGES 4 Aug 2016 4:11 AM (9 years ago)
FROM THE SARAWAK REPORT
CLICK HERE TO READ THE BAHASA VERSION OF THE US JUSTICE DEPARTMENT LAWSUIT TO SEIZE ASSETS LINKED TO 1MDB
- 4 August 2016
The easiest clues ever? Work out for yourself who is MO1
For all you Malay speakers “Find out for yourself who is Malaysian Official Number 1 – we present the Department of Justice Report Translated!”
This week, an UMNO Council Member, the Kinabatangan MP Bung Moktar Radin, smugly told reporters that his ‘simple rural’ constituents in Sabah had no idea about the United States Department of Justice and its report into 1MDB.
He added that neither he nor they would have a clue who ‘Malaysian Official 1′ could be. After all, they don’t speak English.
However, thanks to determined efforts by fellow Malaysians, many of whom do speak very good English, this can all now change.
Over the past few days doughty individuals have tackled the translation of the DOJ’s 136 page document, much of which is couched in legal jargon, into plain Malay.
So, bemused local folk need no longer rely on third hand reports or find themselves misled and confused by interested parties seeking to conceal the truth of this indictment.
Smug Bung – Najib loyalist reckons his constituents are trapped in ignorance
Neither do they have to choose whether to believe the interpretations of Sarawak Report and the rest of the world’s media – or Najib’s supporters, who claim there is no evidence that either he or 1MDB are directly implicated in the theft of billions from Malaysia.
They can find out for themselves [the report is currently fixed alongside the Auditor’s Report into 1MDB on the front page of our site].
Bung and his colleagues may of course resort to their favourite theme, which is to claim that this is a ‘false and doctored’ translation.
However, since the DOJ document is public and transparent and online for all to see (unlike most information produced by their own government) they will have to produce the evidence to test their point.
Sarawak Report urges readers to download our link and send the document far and wide.
Maybe people should highlight what they believe to be the salient points to pass on to friends, since Malaysia’s mainstream media have been banned from performing this basic task?
Use Facebook, Whatsapp, even email to pass on the evidence – for protection upload the document onto so many links that the authorities, who are shutting down Sarawak Report, cannot shut down the truth from the DOJ.
Then those ‘ordinary simple people’, represented by Bung and others, can choose for themselves whether or not to make their voices heard in numbers across all parties, races and religions in favour of fair, honest and clean government for Malaysia, as part of Bersih 5.
Or to settle for a world-beating, corrupt dictatorship instead.
As with online media, Najib can shut up a few hundred and pay a few thousand (or even a hundred thousand), but he cannot jail tens and hundreds of thousands of peaceful, united people, supported by many good citizens across the globe, who are now watching how Malaysian events unfold.
[We will be updating the translation after it has been refined over the next few days]
;%20box-sizing:%20border-box;%20height:%20auto;%20max-width:%20100%25;%20vertical-align:%20middle;%22%20width%3D%22297%22%20/%3E%3Cbr%20/%3E%0A%3Cdiv%3E%0AThe%20easiest%20clues%20ever?%20Work%20out%20for%20yourself%20who%20is%20MO1%3C/div%3E%0A%3C/div%3E%0A%3Cdiv%3E%0AFor%20all%20you%20Malay%20speakers%20%E2%80%9C%3Cem%3EFind%20out%20for%20yourself%20who%20is%20Malaysian%20Official%20Number%201%26nbsp;%3C/em%3E%3Cem%3E%E2%80%93%26nbsp;%3Ca%20href%3D%22http://documents.sarawakreport.org.s3.amazonaws.com/1MDB-Filing-MALAY_Rev1.pdf%22%3Ewe%20present%20the%20Department%20of%20Justice%20Report%20Translated%3C/a%3E%3C/em%3E%3Ca%20href%3D%22http://documents.sarawakreport.org.s3.amazonaws.com/1MDB-Filing-MALAY_Rev1.pdf%22%3E!%E2%80%9D%3C/a%3E%3C/div%3E%0A%3Cdiv%3E%0A%3Cbr%20/%3E%3C/div%3E%0A%3Cdiv%3E%0AThis%20week,%20an%20UMNO%20Council%20Member,%20the%26nbsp;Kinabatangan%20MP%20Bung%20Moktar%20Radin,%26nbsp;%3Ca%20href%3D%22https://www.malaysiakini.com/news/350970%22%3Esmugly%20told%20reporters%3C/a%3E%26nbsp;that%20his%20%E2%80%98simple%20rural%E2%80%99%20constituents%20in%20Sabah%20had%20no%20idea%20about%20the%20United%20States%20Department%20of%20Justice%20and%20its%20report%20into%201MDB.%3C/div%3E%0A%3Cdiv%3E%0A%3Cbr%20/%3E%3C/div%3E%0A%3Cdiv%3E%0AHe%20added%20that%20neither%20he%20nor%20they%20would%20have%20a%20clue%20who%20%E2%80%98Malaysian%20Official%201%E2%80%B2%20could%20be.%20%26nbsp;After%20all,%20they%20don%E2%80%99t%20speak%20English.%3C/div%3E%0A%3Cdiv%3E%0A%3Cbr%20/%3E%3C/div%3E%0A%3Cdiv%3E%0AHowever,%20thanks%20to%20determined%20efforts%20by%20fellow%20Malaysians,%20many%20of%20whom%20do%20speak%20very%20good%20English,%20this%20can%20all%20now%20change.%20%26nbsp;%3C/div%3E%0A%3Cdiv%3E%0A%3Cbr%20/%3E%3C/div%3E%0A%3Cdiv%3E%0AOver%20the%20past%20few%20days%20doughty%20individuals%20have%20tackled%20the%20translation%20of%20the%20DOJ%E2%80%99s%20136%20page%20document,%20much%20of%20which%20is%20couched%20in%20legal%20jargon,%20into%20plain%20Malay.%3C/div%3E%0A%3Cdiv%3E%0A%3Cbr%20/%3E%3C/div%3E%0A%3Cdiv%3E%0ASo,%20bemused%20local%20folk%20need%20no%20longer%20rely%20on%20third%20hand%20reports%20or%20find%20themselves%20misled%20and%20confused%20by%20interested%20parties%20seeking%20to%20conceal%20the%20truth%20of%20this%20indictment.%3C/div%3E%0A%3Cdiv%3E%0A%3Cbr%20/%3E%3C/div%3E%0A%3Cdiv%3E%0A%3Cimg%20alt%3D%22Smug%20Bung%20-%20Najib%20loyalist%20reckons%20his%20constituents%20are%20trapped%20in%20ignorance%22%20class%3D%22size-thumbnail%20wp-image-33070%22%20data-file-id%3D%2210452%22%20src%3D%22http://i2.sarawakreport.org/a/d/0/8/b/ad08bbb27582d4eded4a9ca478d139922301f880.jpg%22%20height%3D%22200%22%20style%3D%22border:%201px%20solid%20rgb(230,%20230,%20230);%20box-sizing:%20border-box;%20height:%20auto;%20max-width:%20100%25;%20vertical-align:%20middle;%22%20width%3D%22200%22%20/%3E%3Cbr%20/%3E%0A%3Cdiv%3E%0ASmug%20Bung%20%E2%80%93%20Najib%20loyalist%20reckons%20his%20constituents%20are%20trapped%20in%20ignorance%3C/div%3E%0A%3C/div%3E%0A%3Cdiv%3E%0ANeither%20do%20they%20have%20to%20choose%20whether%20to%20believe%20the%20interpretations%20of%20Sarawak%20Report%20and%20the%20rest%20of%20the%20world%E2%80%99s%20media%20%E2%80%93%20or%20Najib%E2%80%99s%20supporters,%20who%20claim%20there%20is%20no%20evidence%20that%20either%20he%20or%201MDB%20are%20directly%20implicated%20in%20the%20theft%20of%20billions%20from%20Malaysia.%3C/div%3E%0A%3Cdiv%3E%0A%3Cbr%20/%3E%3C/div%3E%0A%3Cdiv%3E%0AThey%20can%20find%20out%20for%20themselves%20%5Bthe%20report%20is%20currently%20fixed%20alongside%20the%20Auditor%E2%80%99s%20Report%20into%201MDB%20on%20the%20front%20page%20of%20our%20site%5D.%3C/div%3E%0A%3Cdiv%3E%0A%3Cbr%20/%3E%3C/div%3E%0A%3Cdiv%3E%0ABung%20and%20his%20colleagues%20may%20of%20course%20resort%20to%20their%20favourite%20theme,%20which%20is%20to%20claim%20that%20this%20is%20a%20%E2%80%98false%20and%20doctored%E2%80%99%20translation.%3C/div%3E%0A%3Cdiv%3E%0A%3Cbr%20/%3E%3C/div%3E%0A%3Cdiv%3E%0AHowever,%20since%20the%20DOJ%20document%20is%20public%20and%20transparent%20and%20online%20for%20all%20to%20see%20(unlike%20most%20information%20produced%20by%20their%20own%20government)%20they%20will%20have%20to%20produce%20the%20evidence%20to%20test%20their%20point.%3C/div%3E%0A%3Cdiv%3E%0ASarawak%20Report%20urges%20readers%20to%20download%20our%20link%20and%20send%20the%20document%20far%20and%20wide.%3C/div%3E%0A%3Cdiv%3E%0A%3Cbr%20/%3E%3C/div%3E%0A%3Cdiv%3E%0AMaybe%20people%20should%20highlight%20what%20they%20believe%20to%20be%20the%20salient%20points%20to%20pass%20on%20to%20friends,%20since%20Malaysia%E2%80%99s%20mainstream%20media%20have%20been%20banned%20from%20performing%20this%20basic%20task?%3C/div%3E%0A%3Cdiv%3E%0A%3Cbr%20/%3E%3C/div%3E%0A%3Cdiv%3E%0AUse%20Facebook,%20Whatsapp,%20even%20email%20to%20pass%20on%20the%20evidence%20%E2%80%93%20for%20protection%20upload%20the%20document%20onto%20so%20many%20links%20that%20the%20authorities,%20who%20are%20shutting%20down%20Sarawak%20Report,%20cannot%20shut%20down%20the%20truth%20from%20the%20DOJ.%3C/div%3E%0A%3Cdiv%3E%0A%3Cbr%20/%3E%3C/div%3E%0A%3Cdiv%3E%0AThen%20those%20%E2%80%98ordinary%20simple%20people%E2%80%99,%20represented%20by%20Bung%20and%20others,%20can%20choose%20for%20themselves%20whether%20or%20not%20to%20make%20their%20voices%20heard%20in%20numbers%20across%20all%20parties,%20races%20and%20religions%20in%20favour%20of%20fair,%20honest%20and%20clean%20government%20for%20Malaysia,%20as%20part%20of%20Bersih%205.%3C/div%3E%0A%3Cdiv%3E%0A%3Cbr%20/%3E%3C/div%3E%0A%3Cdiv%3E%0AOr%20to%20settle%20for%20a%20world-beating,%20corrupt%20dictatorship%20instead.%3C/div%3E%0A%3Cdiv%3E%0AAs%20with%20online%20media,%20Najib%20can%20shut%20up%20a%20few%20hundred%20and%20pay%20a%20few%20thousand%20(or%20even%20a%20hundred%20thousand),%20but%20he%20cannot%20jail%20tens%20and%20hundreds%20of%20thousands%20of%20peaceful,%20united%20people,%20supported%20by%20many%20good%20citizens%20across%20the%20globe,%20who%20are%20now%20watching%20how%20Malaysian%20events%20unfold.%3C/div%3E%0A%3Cdiv%3E%0A%3Cbr%20/%3E%3C/div%3E%0A%3Cdiv%3E%0A%3Cstrong%3E%5BWe%20will%20be%20updating%20the%20translation%20after%20it%20has%20been%20refined%20over%20the%20next%20few%20days%5D%3C/strong%3E%3C/div%3E)
From THE FINANCIAL TIMES (UK) :Malaysia forfeits US support with 1MDB graft 4 Aug 2016 2:37 AM (9 years ago)
Najib should stand aside while investigations run their course
T
he US Justice Department’s decision to seize more than $1bn in assets allegedly stolen from Malaysia’s sovereign wealth fund has sent shockwaves through the Southeast Asian nation. Until the US announcement last month, most Malaysians were resigned to creeping authoritarianism in their country as the prime minister, Najib Razak, concentrated power in his hands and eviscerated the last vestiges of independent governance.
Mr Najib has in effect removed anyone — from the deputy prime minister to the attorney-general — who questioned his role in the alleged theft of billions of dollars from 1 Malaysia
Mr Najib’s party, United Malays National Organisation (Umno), has ruled the country without interruption for six decades with a mix of cash handouts and suppression of political opponents. But the alleged involvement of Mr Najib, his family and associates with the 1MDB scandal goes beyond the usual levels of corruption in Malaysia. Now the Obama administration has sent an implicit signal that Mr Najib no longer enjoys the unquestioning protection and support of the US.
Since independence in 1957, Malaysia has hardly been a paragon of democracy. But it has always been a staunch western ally and an example of moderate Islam in a world of increasing radicalisation. Thanks to Mr Najib, those assumptions are now in doubt.
In Washington, Malaysia gets little airtime. If the topic crossed Barack Obama’s desk at all it was usually in the context of Mr Najib’s strong support for the Trans-Pacific Partnership (TPP) trade deal or his role as a moderate Muslim bulwark against extremism in Southeast Asia. On Christmas Eve, 2014, the two leaders played a round of golf in Hawaii, something Mr Najib has touted ever since as evidence of his American backing.
He has also cleverly courted China in what analysts say is a warning to Washington that he could move Malaysia into Beijing’s sphere of influence if US support wavers.
In recent weeks, Mr Najib’s government has cynically highlighted the threat of terrorism in his country with hundreds of arrests of alleged terror suspects. Then on Monday the country introduced a new security law that gives Mr Najib sweeping powers to declare a state of emergency in a move human rights groups and UN officials said would allow him to act with impunity and trample human rights.
The Obama administration must not bow to Mr Najib’s attempts to bounce Washington into continued support. Islamist radicalisation is likely to be exacerbated by the current drift towards authoritarianism and the climate of impunity fostered by the prime minister as he clings to power.
TPP is, sadly, no longer a US priority and is opposed by both major presidential candidates. A Malaysian alliance with China is very unlikely, particularly given Umno’s patchy record when it comes to relations with its own large Chinese minority.
As he nears the end of his tenure in the White House, Mr Obama should encourage all US agencies to pursue the 1MDB case to the full extent of American and international law. That applies not only to potential charges against Mr Najib and his associates, but also those involving banks and companies that have abetted the alleged launderingof more than $3.5bn stripped from 1MDB.
Finally, for the sake of the people and the country he professes to serve, Mr Najib should step aside until investigations have run their course or he has cleared his name.
From Sarawak Report:M1.154 Million From 1MDB Was Spent On 'Anti-Ageing' Products for "B1 and Wife"! 3 Aug 2016 3:31 AM (9 years ago)
FROM SARAWAK REPORT
RM1.154 Million From 1MDB Was Spent On 'Anti-Ageing' Products for "B1 and Wife"! EXCLUSIVE
- 2 August 2016
- 34 comments
At that price did it work? ‘First Couple’
Further leaked documents from the Malaysian enquiries into 1MDB have been made available to Sarawak Report, which indicate that the Prime Minister and his wife utilised over RM1.15 million of the fund’s stolen cash on purchasing hormone-based, anti-ageing products via a clinic in KL!
They make clear that whilst the PM is referred to by the Department of Justice investigators at “Malaysian Official 1″, he was dubbed “B1″ by domestic MACC investigators.
The Malaysian Anti-Corruption Commission (MACC) enquiry into 1MDB focussed on the local diversions of SRC cash, which had been originally raised from a RM4 billion from the public pension fund KWAP
AG Apandi Ali “cleared” Najib, but could not deny that the money went from SRC into the PM’s account…
It has been established that altogether someRM70 million was channelled into a series of AmBank accounts belonging to Najib between summer 2014 and early 2015.
However, after sacking the former Attorney General, who was on the point of bringing charges last July, Najib installed his ally, Apandi Ali, who dismissed the charges and ruled the case was closed.
Najib has admitted he did receive the money, but Apandi accepted his excuse that he had not realised that the millions of dollars had come from 1MDB/SRC rather than his “Saudi donor” (money he originally claimed he’d never put to personal use).
The Prime Minister has not been required to pay the money back.
The key accounts detailed in Apandi’s flow charts….
Such looting from SRC may seem small beer compared to the billion dollars that arrived in Najib’s bank accounts from abroad – money now also confirmed by the DOJ as having originated from thefts from 1MDB.
However, SRC was a home-based investigation and it is significant that Najib has just completed his moves to protect himself by dismissing all top three officers from their posts at the MACC after the organisation challenged Apandi’s ruling that there was nothing illegal.
The world’s most expensive beauty product?
Meanwhile, documents obtained from that MACC investigation show the outcome of enquiries by officials into some of the expenditures made from these accounts.
These include a cheque for RM1,154,000 that was made out from account number 2112022011906 to a certain Datuk Sadiq bin Mohammed on February 4th 2015:
RM1,154,000 – for what purpose?
Notes attached to the photocopied cheques suggest that investigators asked Datuk Sidiq the purpose of the payment:
“Pembelian 2 set ubat jenis Plantserum External Apllication Food based GH-9 Honey Softgel dan Food GH-9 Honey Soft Gel pada harga USD159,000 setiap satu set utk kegunaan B1 dan isteri”
This translates:
“The purchase of 2 sets of medication type External Plant Serum Food Application based softgel GH-9 Honey and Honey Food GH-9 Soft Gel at USD159,000 each set for the use of B1 and wife”
Who are B1 and Wife?
Familiar signature of ‘B1′ on every cheque!
As with the DOJ indictment the rest of the document leaves little doubt as to whom the investigators meant by “B1 and Wife”.
Because, the next items of expenditure examined from these accounts include several building works and alterations at addresses which are known to belong to Najib Razak and his wife.
These include, for example, RM100,000 for construction work on a police guard room and amenities at their KL residence made payable to an outfit called ABS Trend Master Sdn Bhd on 16th February 2015:
RM100,000 for construction at “B1’s” address
This payment also has a note attached:
“Kerja-kerja pembinaan satu unit pondok polis (dengan bilik mandi dan cabinet), satu tempat pembuangan sampah konkirt dan satu bilik sebaguna (dengan bilik mandi dan cabinet) di rumah B1 No 11 Jalan Langgak Duta Taman Duta KL”
Which translates:
“Construction work of the police post unit (with bathroom and cabinet), concrete landfills and a multi-purpose room (with bathroom and cabinet) in B1 house No 11 Jalan Taman Duta Duta Langgak KL”
It is of little surprise that the expenditures from these accounts, were for the benefit of the “first couple”, given that Najib has admitted that this and the other accounts were in his name.
His excuse is merely that he did not know where the money had come from.
However, what will leave Malaysians gasping is how two doses of serum and an oral product could possibly cost such a huge amount of money? What possible treatment could this involve?
After some initial bafflement, Sarawak Report believes it has sleuthed the answer to this USD159,000 question.
The most likely explanation is that the ‘GH-9′ description refers to the ‘Growth Factor 9′ hormone, which is being currently touted as all the rage as an anti-ageing product for the ‘super-rich’.
The highly controversial drug is banned for athletes and illegal to prescribe in the United States, except for growth-related conditions.
One typical advertisement for GF-9 – is this the product the Datuk shelled out for?
A series of online advertisements describe the product as being the favourite anti-ageing secret of the rich and famous…. a
For the rich and famous….
And we now believe we have tracked down Datuk Sidiq bin Mohammed as none other than the head doctor at an outfit that describes itself as a “Society for the Advancement of hormones and Healthy Ageing Medicine”, based in KL!
Hormone based anti-ageing clinic whose doctor is none other than a Datuk Sidiq bin Mohammed
Unconventional!
Sahamm touts itself as an ‘alternative medicine’ centre, although of course hormone treatment involves the use of powerful conventional drugs.
It is however highly unconventional to use human growth hormone to promote anti-ageing and physical strengthening.
Doctors would certainly not prescribe such medicaments in conventional medicine. For athletes it is illegal and for anti-ageing it is not an approved use of the drug by the FDA – which is to say that it is illegal to prescribe for anti-ageing in the United States.
‘Alternative medicine’ guru, who says hormone treatment can halt ageing
Side-effects can be extremely troubling.
Nevertheless, Sahamm boasts within its copious promotional online literature that it has the secret to bring “life to years and years to life”.
Heading the clinic in KL is another Datuk Doctor, Dr Selvam Rengasamy, who appears more like a rockstar than a doctor in his online promo.
He sums up his enticing approach to treatment and his secret to holding back the years as apparently using conventional medicine in unconventional ways (which are plainly very expensive):
Disease is but a signal from a body that has lost it’s harmony. Conventional medicine treats diseases with patented medicines which is actually a downstream medicine. Healthy Aging Medicine is an upstream medicine where the focus is on prevention, early detection and treatment of age related dysfunction which adds“LIFE TO YEARS AND YEARS TO LIFE”Healthy Aging Medicine is evidence based medical care substantiated by medical research and using cutting edge technologies such as Stem Cell Therapeutics, Genetic Engineering and Genomics, Nanotechnology for treatment at the most Cellular Level.
Perhaps Datuk B1 and his wife understand the difference in meaning between “upstream medicine” and “downstream medicine”, which might to others appear to represent the abusive misuse of powerful drugs?
Cautions abound to warn against the misuse of hormones to tackle age:
“Some people turn to a substance called human growth hormone(HGH) in hopes that it will keep them feeling and looking youthful. But experts say that hope is unfounded. And worse, these products can be harmful.
Warns WebMD:
“Because the body’s HGH levels naturally decrease with age, some so-called anti-aging experts have speculated and claimed that HGH products could reverse age-related bodily deterioration. But these claims, too, are unproven. The use of HGH for anti-aging is not FDA-approved.
“Companies that market these products on TV infomercials or online claim they turn back your body’s biological clock, reducing fat, building muscle, restoring hair growth and color, strengthening the immune system, normalizing blood sugar, increasing energy and improving sex life, sleepquality, vision, and memory. However, the Federal Trade Commission has seen no reliable evidence to support the claim”
Side effects can include some of the very things beauty addicts are seeking to avoid, including “Swelling due to fluid in the body’s tissues (edema)”.
There are also serious mental side-effects, according to the literature, which can only be classed as worrying in the case of Malaysia’s top decision-makers:
There are also serious mental side-effects, according to the literature, which can only be classed as worrying in the case of Malaysia’s top decision-makers:
“HGH abuse and anabolic steroid abuse can cause serious physical and psychological side effects, including, paranoia, hallucinations, and psychosis, according to the Hormone Foundation. The effects of continued HGH and anabolic steroid abuse could be irreversible. Symptoms of psychosis include delusions, auditory hallucinations and visual hallucinations. Psychotic behavior may be manifested through fearfulness or paranoia.
So, given this was public money (and a very great deal of it), perhaps the first couple can enlighten Malaysians what exactly it was spent on by Dr Sidiq bin Mohammed in his unconventional treatment plan and what effects were expected and achieved for the benefit of the nation?
SRC money, as the MACC investigators point out in their report, was supposed to be placed into money making ventures.
Have the public gained from this million ringgit investment in pumping up the first couple with unconventional hormones or can the public conclude that this has been a mammoth waste of money, or worse impacted negatively on the appearance and mental state of Malaysia’s first couple?
If so, is there not a case to answer at the Sahamm Clinic on trade description grounds and for demanding all that money back?
From The New York Times: MALAYSIA: NAJIB ABDUL RAZAK, THE UNTOUCHABLE PRIME MINISTER DESPITE ALL THE CORRUPTION ALLEGATIONS 31 Jul 2016 5:58 PM (9 years ago)
from THE NEW YORK TIMES
KUALA LUMPUR, Malaysia — The conspirators were confident. They planned to confront Malaysia’s prime minister, Najib Razak, at a cabinet meeting and demand his resignation. Prosecutors had collected evidence that Mr. Najib had deposited millions of dollars of public money into his personal bank account. Attorney General Abdul Gani Patail was ready to file criminal charges, according to Najib advisers and opposition leaders.
Mr. Najib had a reputation as a gentleman who was slow to act and never fired anyone. But when word of the plot reached him last July, he moved quickly. He dismissed both Deputy Prime Minister Muhyiddin Yassin, the man who would have taken his job, and the attorney general. And he blocked further inquiries into the allegations against him.
“They took it for granted that he was a sitting duck,” said Tony Pua, an opposition member of Parliament. “He turned the tables on them.”
Throughout Mr. Najib’s 40 years in public office, he has been easy to underestimate.
This month, the Justice Department filed a civil complaint in a money-laundering case outlining how Mr. Najib, identified as “Malaysian Official 1,” received $731 million from a government fund he oversaw. Investigators around the world are tracking the money trail to his bank accounts in what has become a billion-dollar scandal.
But Mr. Najib, a genteel, British-educated aristocrat who became prime minister in 2009, faces no realistic challenge to his authority and is confidently looking ahead to winning re-election in 2018.
The bank transfers are not the first scandal to threaten the career of Mr. Najib, 63, one of America’s most important allies in Southeast Asia. Over the years, he has been accused of having ties to a murder, taking kickbacks from the purchase of military hardware and helping concoct a criminal prosecution against a rival.
He has deployed the formidable powers of his office to impede investigations, silence critics, block media outlets and maintain the backing of his largely rural, Muslim base. He has deftly played Malaysia’s brand of money politics, distributing cash to buy party leaders’ loyalty.
As prime minister, he oversees Parliament, the cabinet, the police and the intelligence branch. As president of the governing party, he decides who holds key leadership positions and sits atop a vast patronage system that affects the wealth and livelihood of thousands of people.
He appointed himself finance minister, giving himself control of the state investment fund at the heart of the scandal.
For the United States, Mr. Najib has offered the promise of a moderate Muslim ally and an Asian partner in counterterrorism, whose nation is one of the 12 negotiating the Trans-Pacific Partnership trade agreement. As a sign of Malaysia’s growing importance, President Obama visited the country and met with Mr. Najib in 2014 and 2015. In between, they golfed together in Hawaii.
While that relationship did not deter the Justice Department investigation, his relationship with Saudi Arabia has been more helpful. Mr. Najib’s advisers say most of the money at issue was a gift from the Saudis, partly to help finance his 2013 election campaign, a position the Saudi government has loosely corroborated.
Malaysians grumble about Mr. Najib’s wealth, which he claims to have inherited, and the extravagance of his wife, Rosmah Mansor, who is known for epic overseas shopping excursions and her multimillion-dollar collection of Hermès Birkin handbags.
The allegations of high-level corruption and the lack of any impartial Malaysian investigation highlight the fact that the region’s movement toward democracy has left Malaysia untouched, said Donald Greenlees, an authority on Southeast Asia with Australian National University.
“Najib is a throwback to the era of Marcos’s Philippines and Suharto’s Indonesia with ruling families hungry for power and great wealth,” he said. “Imelda had her shoes and Rosmah has her Birkin bags. But the bags are vastly more valuable than the shoes.”
Mr. Najib has acknowledged receiving hundreds of millions of dollars, but says he has done nothing wrong and took nothing for personal gain. He said his government would “fully cooperate” with the Justice Department investigation.
“Don’t think I am a crook,” he told the party faithful in March at a rally in Pahang, his home state. “If I had wanted to rob, I would have robbed the forest here long ago. I didn’t take a single tree in Pahang. I didn’t take the bauxite mine. I didn’t take anything.”
Mr. Najib is accused of taking money from a state investment fund called 1 Malaysia Development Berhad, or 1MDB. He gave himself extraordinary authority over the fund as both finance minister and, until recently, advisory board chairman. The United States attorney general, Loretta Lynch, said Malaysian officials had laundered more than $3 billion from the fund through American financial institutions.
Mr. Najib’s advisers acknowledge that he received $1 billion but assert that most of it was a gift from a member of the Saudi royal family.
The current Malaysian attorney general, Mohamed Apandi Ali, announced in January that Mr. Najib had received $681 million from the Saudis and returned all but $61 million. He cleared Mr. Najib of wrongdoing and closed an investigation by the Malaysian anticorruption commission.
Mr. Najib and Ms. Rosmah declined through a spokesman to be interviewed for this article.
Mr. Najib was destined to become prime minister, his friends and supporters say. His father was Malaysia’s second prime minister, and his uncle the third.
Balding, with a neatly trimmed graying mustache and silver-rim glasses, Mr. Najib behaves like a British gentleman with impeccable manners, they say. He is often dressed formally even for late-night meetings at his home. He is viewed as a numbers guy with an keen eye for detail.
“He’s very cool,” said Fatmi Che Salleh, his longtime friend and former political secretary. “He takes things one at a time. Everything is planned, what to do, how to do, especially now we see so many attacks on him.”
Mr. Najib grew up in a household immersed in the politics of an emerging nation and its governing party, the United Malays National Organization, or UMNO.
He was educated in Britain and studied economics, rejecting the advice of his father, Prime Minister Abdul Razak, to become an accountant.
As prime minister, Mr. Abdul Razak was well known for his frugality. He refused his children’s plea to install a swimming pool at the official residence because it would waste government funds, one brother recalled. The lesson on thrift was another piece of fatherly wisdom Mr. Najib ignored.
When Mr. Abdul Razak died in 1976, Mr. Najib ran for his father’s parliamentary seat and at 22 became the youngest person ever elected to Malaysia’s Parliament. He married a minor princess, with whom he had three children.
In the mid-1980s, Mr. Najib met Ms. Rosmah, who was married with two children. The pair divorced their spouses and married in 1987. They have two children together.
Mr. Najib steadily climbed the party ladder, receiving help along the way from UMNO leaders indebted to his father, including Mahathir Mohamed, who succeeded Mr. Najib’s uncle as prime minister.
“I owed his father a great deal,” Mr. Mahathir, 91, said in an interview. “If I could do something for the son, especially as the son looks very promising, I would do it.”
He has spent his entire adult life in elective office, living in a bubble, surrounded by aides and devotees. On a trip to Europe, he did not know how to check in for a flight or find his departure gate, said a friend who traveled with him. He never packed his own suitcase; for a two-day trip, his servants packed him six suits.
Mr. Najib was deputy prime minister when the murder of a Mongolian woman and corruption allegations over the $1.2 billion purchase of two Franco-Spanish Scorpene submarines nearly derailed his career.
The woman, Altantuya Shaariibuu, was the mistress of his close friend and adviser, Abdul Razak Baginda. She claimed she was owed $500,000 for helping broker the submarine deal. In 2006, she was killed by two of Mr. Najib’s bodyguards, who tried to hide the evidence by blowing up her body with C-4 explosives. They were convicted of murder.
Mr. Najib has denied meeting Ms. Altantuya or having a role in her death. But a decade later, he is still dogged by allegations that he was connected to the killing and received kickbacks from the submarine purchases. The French authorities are investigating whether a French company paid Mr. Najib and Mr. Abdul Razak $130 million to secure the sale. The two deny any wrongdoing.
Mr. Najib’s name has also been attached to another murky episode, the criminal case that sidelined his biggest rival, Anwar Ibrahim, a former deputy prime minister who became leader of the opposition.
In a case widely seen as politically motivated, Mr. Anwar was imprisoned on sodomy charges in 1998. After his release in 2004, he began rebuilding the fractured opposition, and new sodomy charges were filed in 2008.
The accuser was Saiful Bukhari Azlan, an aide in Mr. Anwar’s party. At a trial, Mr. Saiful testified that he had met with Mr. Najib at his home two days before the sexual encounter. Mr. Saiful also met with senior police officials before the encounter.
It has never been fully explained how Mr. Najib, then deputy prime minister, happened to meet with a staff member from the opposition party at that time, or why Mr. Saiful met with police officials.
Mr. Anwar was acquitted and led the opposition to victory in the popular vote in 2013, though not by enough to overcome district lines favoring Mr. Najib’s coalition.
In 2014, an appellate court overturned Mr. Anwar’s acquittal and sentenced him to five years in prison. Opposition parties have yet to coalesce behind another leader.
When Mr. Najib became prime minister seven years ago, he inherited a political system awash in cash.
“In Malaysia, politics is about money,” said Oh Ei Sun, a former political secretary to Mr. Najib and an adjunct senior fellow at the S. Rajaratnam School of International Studies in Singapore. “It’s not a contest about your brilliant ideas.” Indeed, parties vie for votes by funneling money to loyal followers and financing overdue public works projects.
In May 2010, Mr. Najib demonstrated how the system works. During a by-election, he promised voters in the Sibu district that his government would pay $1.3 million for a flood-control project if his candidate won. “The understanding is quite simple,” he said. “You help me, I help you.”
He poured more than $300 million into the 2013 parliamentary elections campaign, his advisers say.
Malaysia has no limits on how much party leaders can raise or spend, and there is no reporting requirement, said Wan Saiful Wan Jan, the chief executive of the Institute for Democracy and Economic Affairs, a Malaysia think tank. The money is tax free, and much of it is distributed to local party leaders, who can easily pocket a share.
No law prohibits candidates from depositing donations in their personal bank accounts, even $1 billion.
“I don’t think Najib is the only one,” Mr. Wan Saiful said. “I don’t even know if he’s the biggest.”
The story of the Saudi gift has evolved with new revelations about deposits into Mr. Najib’s accounts.
Mr. Najib’s government said in January that $681 million was a gift from a member of the Saudi royal family. After questions were raised about additional deposits of hundreds of millions of dollars, Mr. Najib’s advisers said Saudi donors had given him about $1 billion.
His office declined to provide documentation demonstrating that either sum was a gift.
The Saudis, too, have changed their story. In February, the Saudi foreign minister, Adel al-Jubeir, said the money had come not from the government, but rather from a private citizen making “an investment in Malaysia.”
In April, after Mr. Najib and his aides met privately with Mr. Jubeir in Istanbul, Mr. Jubeir said Mr. Najib had received a gift from an unidentified Saudi source.
“It is a genuine donation with nothing expected in return,” he said.
Mr. Najib has cultivated close ties with Saudi Arabia, but even so, experts say, a gift of $1 billion was unlikely. “Nobody believes that the money came from Saudi Arabia,” said James Chin, the director of the Asia Institute at the University of Tasmania.
The Justice Department complaint said Mr. Najib’s relatives and associates had taken more than $1 billion from 1MDB, spending it on luxury real estate, gambling, Hollywood moviemaking and high-priced artwork.
Ibrahim Suffian, the director of the Merdeka Center, an independent polling agency in Malaysia, said surveys showed that two-thirds of the public were unhappy with Mr. Najib, yet people feel powerless to remove him from office.
As popular support has eroded, Mr. Najib’s government has blocked news outlets, prevented opposition leaders from campaigning and prosecuted critics under a colonial-era sedition act that he once promised to repeal.
“Clearly, in order to save his own political skin, he’s prepared to destroy what little remains of basic civil liberties and human rights in Malaysia,” said Phil Robertson, the deputy director of the Asia division of Human Rights Watch.
The effort to force Mr. Najib from office — and the threat of prison — have given him new resolve to remain in power until the 2018 election and beyond, advisers say. His prospects are good.
“He will be more invincible in 2018,” said Mr. Oh, the former Najib aide, “because as it is, he is already unstoppable.”
FROM SARAWAK REPORT: A THIEF AND LIAR, CAUGHT RED HANDED BY THE FBI! - PM Najib Razak ["Malaysian Official Number 1"] Is Unmasked! 23 Jul 2016 8:24 AM (9 years ago)
FROM SARAWAK REPORT
![A THIEF AND LIAR, CAUGHT RED HANDED BY THE FBI! - PM Najib Razak ["Malaysian Official Number 1"] Is Unmasked!](http://i2.sarawakreport.org/a/a/d/2/9/aad298a8875247bfd6674476ed1a06026b82d6cc.jpg)
A THIEF AND LIAR, CAUGHT RED HANDED BY THE FBI! - PM Najib Razak ["Malaysian Official Number 1"] Is Unmasked!
- 20 July 2016
No choice – Najib must go
It took a year in coming, but now that the United States Department of Justice indictment on 1MDB has been laid before the courts its impact can only be described as earth-shattering for Malaysia – and utter vindication for Sarawak Report.
The joint investigation by the ‘Kleptocracy Asset Recovery Unit’ together with the FBI was personally presented at a Press Conference by the US Attorney General Loretta Lynch, who described the investigation into 1MDB as the “largest single action ever by the Kleptocracy Asset Initiative” and a “significant step in our ongoing work to combat global corruption and to ensure that the United States offers no safe haven to those who illegally use public funds for private gain“
The asset recovery indictment accuses Malaysia’s Prime Minister Najib Razak directly of having received hundreds of millions of dollars stolen from 1MDB into his private account.
Most significantly of all it puts paid to the claim that the notorious $681 million paid into Najib’s account in 2013 was a “donation” from a Saudi Royal. To the contrary, the DOJ spells out in excruciating detail how this money was transferred not from a Saudi Royal, but from 1MDB, via Tanore Finance Corporation and into Prime Minister Najib Razak’s KL bank account.
And in a broad sweep of over a billion dollars worth of confiscated assets are included all the receipts from his step-son’s film Wolf of Wall Street, along with a string of properties and possessions held by Riza Aziz, Jho Low and their accomplice Khadem Al Qubaisi in the United States.
“Corrupt officials transferred money using a series of transactions involving more shell companies and bank accounts located all over the globe. Eventually more than $230 million of that found found its way in the account of shell companies whose beneficial owner was a close relative of a senior 1MDB official and that individual used money to buy luxury real estate in the United States and other assets and also used that money to fund a motion picture company called Red Granite Pictures who in turn used more than $100 million to finance the award-winning film The Wolf of Wall Street. Of course, neither 1MDB nor the Malaysian people saw a penny of profit from that film or the other assets purchased with funds siphoned from 1MDB. Instead that money went to associates of the corrupt officials at 1MDB and others” added Assistant Attorney General Leslie Caldwell in a follow up speech, in a clear reference to Najib and his step-son Riza Aziz.
Altogether, the indictment says, the Prime Minister’s agent Jho Low “laundered” approximately $368 million of 1MDB’s funds through the United States, through the assets it has now frozen.
“The $1 billion in assets that we’re discussing today are just a portion of the more than $3 billion that was stolen from 1MDB and laundered through American institutions in violation of the law. 1MDB was created to promote economic development… unfortunately and tragically a number of corrupt officials treated this public trust as a personal bank account”
says the US Attorney General – and there is no mistaking from this indictment that she is referring above all to Malaysia’s Prime Minister himself.
FBI Deputy Director Andrew McCabe was also on stage to outline the disgusting excesses of the thieves from 1MDB and explained why the United States has taken such strong and decisive action against the Malaysian fund:
“They used the money to pay gambling debts at Las Vegas casinos, they rented luxury yachts, they hired an interior decorator in London and spent millions on property… among the purchases was a jet for the purchase price of $35 million.So why does this matter so much to us? Certainly there’s a lot going on in the world right now, terrorist attacks, violent crime and serious threats to American citizens and people around the world. Why does the corruption case halfway round the world matter so much to us here today? Well, I’ll tell you for a few reasons. First, because some of the profits of these schemes were invested in the United States, and when corrupt officials bring their ill-gotten gains to the United States, they also bring with they also bring with them their corrupt practices and disregard for the rule of law and that presents a threat to our economy and impacts trade and investment and fuels the growth of criminal enterprises and undermines our fair democratic processes…”
Transfers to Najib [‘Malaysian Public Official Number’ 1] – and the Role of the Saudi Prince!
The FBI provides for the first time devastating and damning evidence of the purpose of the 1MDB thefts, which was to pass money to the man in charge who was Najib Razak.
The indictment (available in full at the base of this article) describes the PM as ‘Malaysian Public Official Number 1′:
No mistaking who Malaysian Public Official Number 1 might be!
From the very start the accusation is made that money was stolen from 1MDB, using several schemes and phases, listed as the 1) The Good Star Phase 2) The Aabar/BVI Phase and 3) The Tanore Phase.
Dealing with the Good Star Phase and PetroSaudi the indictment makes immediately clear that the claims by 1MDB and oil firm PetroSaudi that Good Star belonged to the latter were lies – The Feds confirm that the firm belongs to Jho Low, who siphoned first US$700 million out of the joint venture and later US$330 million, all under false pretences.
Saudi Royal ‘Donor’ was Prince Turki!
The DOJ continues to lay out the direct and complicit role of PetroSaudi and its co-founding Prince Turki bin Abdullah in funnelling the stolen cash straight on to Najib. At last the role of the so-called ‘donor’ is laid bare. Several transactions involving the money stolen via Good Star, show that it was then sent to Turki, who sent it on to the Malaysian Prime Minister:
“Between February and June of 2011, approximately $24,500,000 of these funds was transferred into an account at Riyad Bank maintained in the name of a Saudi prince who, together with the PetroSaudi CEO, co-founded PetroSaudi. From those funds, $20,000,000 was then transferred, within days, to an account belonging to Malaysian Official 1″
Caught red handed by the FBI!
Lest there should be any doubt about the source of the funds and identity of Najib’s ‘Saudi Royal Donor’ this citation immediately carries on to make a deadly point.
The account to which the Good Star money was sent was the very same AMPrivate Bank account belonging to Najib, which was later to receive the $681 million dollars from Tanore Finance Corporation, allegedly as a Saudi royal donation!
Prince Turki from PetroSaudi was used as a fence to conduit 1MDB’s stolen cash to Najib’s KL account,
in return for a rake off fee each time
World class “launderer” – Jho Taek Low diverted $368 into the US!
This is an indictment that could never be accused of mincing its words and this is what the United States prosecutors have to say when they turn next to Najib’s 1MDB fixer, Jho Low:
“Low laundered hundreds of millions of dollars in proceeds from the foregoing unlawful activity into the United States for the personal benefit of himself and his associates…..Between approximately October 21, 2009, and October 13, 2010, eleven wires totalling approximately $368 million were sent from the Good Star Account to an Interest on Lawyer Account held by the law firm Shearman & Sterling LLP in the United StatesMore particularly, bank records show the following credits to the Shearman IOLA Account from the Good Star Account:
No surprise – Jho Low’s lavish living came from 1MDB!
The figures show that the first $148 million in stolen money were transferred into Jho Low’s US accounts on 21st October 2009, just a couple of weeks after the $700 million was channelled out of 1MDB into his Good Star account in Zurich.
By this time, as Sarawak Report has noted, the young huckster was on a bender in Vegas, where work colleague Seet Li Lin boasted on Facebook that it was “raining Crystal” (champagne). The indictment complains that much of the cash from 1MDB was indeed wasted in Vegas on gambling and entertainment by these thieves working for the Malaysian Official 1.
The money transferred was then used by Low, says the indictment to “purchase assets and invest in business interests for their personal benefit, including, but not limited to, luxury real estate, a Beverly Hills hotel, a private jet, and a major Hollywood motion picture“.
There is no doubt that the picture referred to is The Wolf of Wall Street, starring Jho Low’s party pal Leo Di Caprio, which features first on the list of assets that the United States Government wishes to confiscate.
The money funded Jho Low’s business acquisitions and a luxury life-style
The lavish and extravagant spending explains the numerous instances cited already by Sarawak Report of astonishing spending in Vegas nightclubs, on yachts …. and on jewellery bought at Hong Kong’s Rose Trading on behalf of Rosmah Mansor:
“…between October 2009 and October 2010, misappropriated 1MDB funds sent from the Good Star Account into the Shearman IOLA Account were transferred as follows: (i) approximately $12,000,000 in wires to Caesars Palace, a Las Vegas casino; (ii) approximately $13,400,000 in wires to the Las Vegas Sands Corp., the owner of the Venetian Las Vegas, another casino; (iii) a wire for approximately $11,000,000 to “Eric” TAN Kim Loong, an associate of LOW; (iv) approximately $4,000,000 in wires to Jet Logic Ltd., a luxury jet rental service; (v) a wire for approximately $3,500,000 to LOW’s sister; (vi) a wire for approximately $3,080,000 to Rose Trading, a Hong Kong jeweler; (vii) approximately $2,698,000 in wires to Yachtzoo, a luxury yacht rental service; (viii) approximately $2,288,000 in wires to Argent Design Ltd., a United Kingdom-based interior designer; (ix) a wire for approximately $670,000 to Excel Air, a jet rental company; (x) approximately $460,000 in wires to Skyline Private Air, an aircraft rental company; and (xi) a wire for approximately $155,000 to Billiyon Air, a jet rental company.”
Separately, as recorded also by Sarawak Report, huge sums were also sent from Good Star to the ADMIC account in Singapore, also owned by Jho Low:
“Over the course of five wire transfers between June 28, 2011, and September 4, 2013 approximately $389 million was transferred from the Good Star Account to an account at BSI Bank in Singapore held in the name of Abu Dhabi Kuwait Malaysia Investment Corp. (“ADKMIC BSI Account”). LOW is the beneficial owner of the ADKMIC BSI Account.”
Confirms the indictment. This money was also used by Low to acquire business and other assets in the US.
The Aabar/BVI Phase – Money went directly to Najib
The DOJ goes on to deal with what it describes as the second major phase of the kleptocracy scam, plainly orchestrated by the one man still in charge throughout, PM Najib Razak. Again, all Sarawak Report’s months of breaking stories and reporting on Aabar and its Chairman Khadem Al Qubaisi (for which we were banned in Malaysia) is vindicated by this confirmation by the United States Department of Justice that at least $1.367 billion was stolen from the scheme.
More vindication – the Aabar/ IPIC scandal was also just as Sarawak Report had outlined.
“In 2012, approximately $1.367 billion in 1MDB funds that were raised in two separate bond offerings were misappropriated and fraudulently diverted to bank accounts in Switzerland and Singapore..” [112 DOJ indictment on 1MDB]
The DOJ confirms that “Almost immediately after receiving the proceeds of each of the 2012 bond issues, 1MDB wire transferred a substantial portion of the proceeds – totalling approximately $1.367 billion between the two bond sales, or more than forty percent of the net proceeds raised – to a Swiss bank account belonging to an entity called Aabar Investments PJS Limited”.
The account was a fake subsidiary of the genuine Aabar as Sarawak Report and others have reported, but which Najib and 1MDB have continued to deny.
So what happened to that money next? At last we have the answers and the proof that once again it went to a Jho Low company already identified by Sarawak Report as Blackstone Asia Real Estate Partners:
“within days of receiving funds from 1MDB, Aabar-BVI transferred a total of approximately $636 million to the Singapore bank account held by Blackstone Asia Real Estate Partners (“Blackstone Account”). .. The beneficial owner of the Blackstone Account was identified in bank records as “Eric” TAN Kim Loong (“TAN”), a Malaysian national and an associate of LOW.”
This money was then parcelled out to the Aabar 1MDB conspirators including Aabar Chairman Khadem Al Qubaisi, CEO Mohamed Al Husseiny, and then “In October and November 2012, Blackstone transferred $30,000,000 to an account belonging to MALAYSIAN OFFICIAL 1.” i.e. Najib Razak.
Next a nice lump of the stolen money also went to step-son Riza Aziz:
“Shortly after receiving proceeds of the two 2012 bond sales from 1MDB, Aabar-BVI also transferred $238,000,000 to a Singapore bank account belonging to Red Granite Capital, an entity owned by Riza Shahriz Bin Abdul AZIZ (“AZIZ”). AZIZ is a relative of MALAYSIAN OFFICIAL 1 and a friend of LOW. Among other things, AZIZ used these funds to purchase luxury real estate in the United States and the United Kingdom for his personal benefit, and to fund his movie production company, Red Granite Pictures.”
Back in 2013 Sarawak Report was threatened with legal action for questioning these expenditures by Riza. But, then Najib’s step son pulled back. No wonder, because according to the DOJ’s forensic and devastating analysis, everything we had said was absolutely right.
Banks in the frame – Goldman Sachs
“The offering circular contained misleading statements and omitted material facts necessary to make its representations not misleading…”
The DOJ does not waste time in making clear that America’s top bank misled the buyers of the 1MDB bonds that it negotiated. This with regard to the first power purchase bond of $1.75 bn for Tanjong Energy, called “Project Magnolia”:
“Internal documentation prepared by Goldman summarizing the bond transaction indicates that the “general corporate purposes” for which the bond proceeds were contemplated included “pre-fund guarantee fees to IPIC, cash on balance sheet, and transaction related expenses.”In reality, however, nearly $577 million – a sum equivalent to more than one third of the net proceeds of the Project Magnolia bond offering – was diverted to Aabar-BVI within one day of 1MDB’s having received the proceeds of the bond offering. Nothing in the offering circular disclosed that 1MDB would transfer any of the bond proceeds to Aabar-BVI, or that funds transferred to Aabar-BVI would subsequently be used for the benefit of officials at 1MDB, IPIC, and Aabar, including QUBAISI, IPIC’s Chairman, and HUSSEINY, Aabar’s CEO…”
It places Goldman Sachs in serious trouble, as long suspected by followers of 1MDB. The DOJ points to the astronomical costs of GSI’s compliant and misleading services, which again disadvantaged investors and the Malaysian public, who were Goldman’s clients:
“1MDB agreed to pay Goldman: (a) a fee of 1% of the principal amount of the notes, or $17.5 million, as an “Arranger Fee,” and (b) $175,000,000, as a “Commission,” for a total of $192,500,000. These fees amount to roughly 11% of the principal amount of the offering and were to be deducted directly from the subscription proceeds of the bonds”
Exactly the same scam was carried out with the second $1.75 bn power purchase bond “Project Maximus” as the first, the DOJ says, with half the money being immediately diverted.
“As with Project Magnolia, the offering circular for Project Maximus nowhere disclosed that nearly half of the net bond proceeds would be transferred to Aabar-BVI, in the form of “collateral” or otherwise, or that funds transferred to Aabar-BVI would subsequently be used for the personal benefit of officials at IPIC, Aabar, and 1MDB, including QUBAISI and HUSSEINY.’
And once again Goldman Sachs misled buyers in its offering circular:
“Although IPIC did not directly guarantee the Project Maximus notes as it had with the Project Magnolia bonds, it nevertheless agreed to privately secure the bonds on a bilateral basis with Goldman. No reference to IPIC’s indirect guarantee was included in the offering circular.
The most deadly and damning accusation out of all this of course is that the proceeds of this looting ended up with Najib [Malaysian Public Official 1] and his co-conspirators at Aabar and 1MDB:
“the Aabar-BVI Swiss Account was used to unlawfully divert proceeds of both the Project Magnolia and Project Maximus bonds, which were thereafter used, after having passed through various accounts, to make substantial payments to QUBAISI, HUSSEINY, MALAYSIAN OFFICIAL 1, and 1MDB OFFICER 3″
How the money was divvied up!
The 1MDB conspirators made a fatal error throughout their dealings, in that they conducted all their affairs in dollars. The incentive was clear – they wanted their loot in international currency, not to invest it back in their own country of trusting voters. However, this means that from the start the US investigators have been able to trace each and every transaction they undertook, through their clearing systems.
So, in May 2012, we are told $907,500,000 in proceeds from the bond sale was transferred to the Aabar owned Swiss Private Falcon Bank (of which Al Husseiny was the Chairman) – a couple of days later $576,943,490 went on to the fake Aabar’s account in the Private Swiss BSI Bank in Lugano.
“Nothing in the Project Magnolia offering circular disclosed that any funds would be sent to Aabar-BVI, let alone one third of the net bond proceeds” The DOJ again admonishes Goldman and the other banks involved.
Likewise, in October $790 Million in 1MDB Funds Was Diverted to the Aabar-BVI Swiss Account from the next Maximus Project Bond. This represented more than forty percent (40%) of the total net proceeds of the two bond sales, says the DOJ.
The DOJ slams the practice shown throughout the 1MDB scam and often previously raised by Sarawak Report, of choosing names for bogus companies, which are designed to make them sound like subsidiaries of large and more reputable concerns.
“The practice of utilising a bank account held by an entity with a name that mimics a well-known commercial enterprise is a technique commonly employed to lend the appearance of legitimacy to transactions that might otherwise be subject to additional scrutiny by the financial institutions involved, for example, because of the size of the transaction or because of the role of a politically-exposed person or entity in the transaction.” the DOJ observes…. in which case, why were the banks not ready against being fooled?
Key role of Blackstone identified by Sarawak Report
Money went from 1MDB to Fake Aabar to Blackstone… to Najib!
The indictment rolls relentlessly on. From the power purchase deals, the DOJ explains that a total of $1.1 billion dollars was sent out of the power purchase deals to the fake Aabar account at BSI Lucerne and then on to the fake Blackstone Asia Real Estate Partners Account at Standard Chartered Bank in Singapore, managed by the Jho Low stooge, Eric Tan.
Blackstone receipts from the power purchase bond issues came through in days
A lot of this money was changed into cash at money exchanges in Singapore, a common launderer’s trick, says the DOJ. Meanwhile, they trace the money from the second bond deal thus: “roughly six days after the Project Maximus bond issue and four days after Aabar-BVI received approximately $790 million from 1MDB Energy Langat” . This money was then transferred via two intermediary companies to Blackstone to the tune of $455,000,000.
Devastatingly, the DOJ then says that from Blackstone the money was passed on to Najib and his accomplices:
DOJ say it straight – Malaysian Official 1 got paid by Blackstone
On the distribution of this money the DOJ confirms Sarawak Report’s earlier information that nearly half a billion dollars went to the Edmond de Rothschild Bank Privee account of Khadem Al Qubaisi, which had of course been denied by the bank.
“Blackstone Transferred Approximately $473 Million to an Account Controlled by QUBAISI……Between approximately May 29, 2012, and November 30, 2012, four wires totaling $472,750,000 were sent from the Blackstone Account to an account at Bank Privee Edmond de Rothschild (“Bank Rothschild”) in Luxembourg maintained in the name of Vasco Investments Services SA (“Vasco Account”).
Khadem Al Qubaisi’s side-kick CEO of Aabar Mohamed al Husseiny also got his kickback out of Malaysia’s stolen public money:
“Between May and December 2012, entities belonging to HUSSEINY, then- CEO of Aabar, also received $66,600,000 from the Blackstone Account.”
…. and of course money was also transferred to Najib, known as ‘Malaysian Official Number 1″:
“Blackstone also transferred at least $30,000,000 to an account belonging to MALAYSIAN OFFICIAL 1 shortly after receiving funds from Aabar-BVI.On or about October 30, 2012 – roughly seven days after Blackstone received $75,000,000 directly from Aabar-BVI and roughly six days after it received $360,000,000 indirectly from Aabar-BVI via Enterprise and Cistenique – Blackstone transferred $5,000,000 into an account at AmBank in Malaysia held in the name of “AMPRIVATE BANKING MR.”That bank account belongs to MALAYSIAN OFFICIAL 1 and is the same account that received $20,000,000 from the PETROSAUDI CO-FOUNDER in 2011, within days of the receipt by the PETROSAUDI CO-FOUNDER of funds from Good Star, as set forth in Section II.G.On or about November 19, 2012 – less than two weeks after Blackstone received $95,000,000 from Aabar-BVI via Enterprise – Blackstone transferred $25,000,000 to the same AMPRIVATE BANKING-MR Account belonging to MALAYSIAN OFFICIAL 1.
That totals $135 million transferred from 1MDB, via Aabar, then Blackstone to Najib’s AmPrivate Bank account in KL, from the power purchase deals during the course of 2012. So, who is the criminal, Sarawak Report and others for asking some questions about 1MDB or the Prime Minister?
Riza Azia was another beneficiary of the power purchase deal money explains the DOJ – “Between June 18, 2012, and November 4, 2012, $238,000,000 was transferred directly from the Aabar-BVI Swiss Account to an account controlled by AZIZ, a relative of MALAYSIAN OFFICIAL 1.” Aziz used the money to buy real estate and pay for his Red Granite production company’s expenses…. so much for the claim of independent investors.
The money was sent direct from bogus Aabar to a Red Granite account at BSI Singapore:
Nowhere to hide – how Riza stole the cash
Malaysians will be interested to learn that Riza Aziz claimed that this money was a “gift” from Aabar! He is clearly a man who learns from his parents. Much of the money was used to buy his string of fancy houses, which have been identified by Sarawak Report in Hillcrest Drive Beverley Hills and Lygon Place in London.. as well as his fancy pad in New York.
The explanation of the “gift” to Riza’s tax consultants was that Aabar was owned by a ‘family friend’. If a Sultan can donate a billion to Najib, why not? Mohamed Al Husseiny again did the honours by sending a letter confirming his “gift” to Riza.
The rest of the money went into the Wolf of Wall Street, a film that has been seized with all its profits by the United States DOJ as the number one item in this asset recovery bid:
Between June and November 20, 2012, eleven wires totaling $64,000,000 were sent from the Red Granite Capital Account to an account at City National Bank in the United States maintained by Red Granite Pictures.These funds transferred to Red Granite Pictures in the United States were then used to fund Red Granite Picture’s operations, including the production of the film “The Wolf of Wall Street,” which was released in the United States on December 25, 2013.
Najib step-son used 1MDB stolen money to gamble with
As if it could not get any worse the DOJ then discloses that at least $41 million of the money was used to gamble with by Aziz, Low and Tan over a number of sessions in Las Vegas. The co-producer of Red Granite Joey McFarland also drew on this gambling account.
The Tanore Phase
The indictment moves finally into what it describes as the Tanore Phase, a deadly name for Najib, given the association with Sarawak Report’s revelations last July of the shocking transfer of $681 million transferred into his AmBank account just before the last election.
Najib in the end claimed the money was a ‘donation’ from a Saudi Royal.
It wasn’t says the DOJ and no one in Malaysia will be in the least surprised. After all the lies and fairy tales about donors from the Saudi Royal Family, it is over this issue above all the others that Najib must resign.
This last tranche of money that went through Tanore is confirmed as having been raised (as suspected by Sarawak Report) from the third and final Goldman Sachs bond issue of $3 billion raised in March 2013 in the name of a Strategic Joint Venture with Abu Dhabi’s Aabar fund in order to build the Tun Razak Exchange.
in 2013, more than $1.26 billion in 1MDB funds that were raised in a third bond offering arranged by Goldman were misappropriated and fraudulently diverted to bank accounts in Switzerland and Singapore. In issuing these bonds, 1MDB participated in the publication and disclosure of an offering circular that again contained material misrepresentations and omitted material facts necessary to render its representations not misleading regarding:
All that money, says the DOJ was funnelled through Tanore Finance Corporation, which like Blackstone before it was managed by Jho Low’s employee Eric Tan. And the DOJ confirms that it was this money – the notorious $681 million – stolen from 1MDB, that ended up in Najib Razak’s AmBank account… just like Sarawak Report suggested months ago:
“very shortly after the bond offering closed, between approximately March 21, 2013, and March 25, 2013, $681,000,000 was transferred from the Tanore Account to an account belonging to MALAYSIAN OFFICIAL 1. Of this amount, approximately $620 million was returned to the Tanore Account on or about August 26, 2013.”
So there we have it. No Saudi Royal and no return of money to the ‘donor’, just back to Tanore when it was no longer needed in KL for other business ventures and purchases:
1MDB funds diverted to the Tanore Account were also used by LOW and TAN to purchase artwork for their personal benefit and to purchase an interest in the Park Lane Hotel for the personal benefit of LOW. The disposition of these funds was not consistent with the intended use of the 2013 bond proceeds nor was it made for the benefit of 1MDB or ADMIC.
Once again there is a deadly admonishment for Goldman and Najib:
“The offering circular omitted material facts necessary to makes it representations regarding the use of the bond proceeds not misleading, in that it failed to disclose that certain individuals related to 1MDB, including MALAYSIAN OFFICIAL 1, would receive hundreds of millions of dollars from the proceeds of the bond sale within days of its closing. This fact would have been material to the bond transaction, as it would have alerted investors to the possibility of conflicts of interest and related-party transactions.
First the bilk of the money raised was sent to the 1MDB Global account at BSI Lugano – “On or about March 19, 2013, a total of $2,721,000,000, representing proceeds of the bond sale, was transferred from Bank of New York Mellon into the BSI Lugano account of 1MDB Global in two separate wires..”
$1,590,000,000 of that was invested in funds.,, the same two companies used earlier to transfer cash to Blackstone. Within two days much of the remainder went from 1MDB Global’s BSI account to Tanore:
Within approximately two days after 1MDB Global began its transfer of more than $1.5 billion to the Overseas Investment Funds, the Overseas Investment Funds collectively transferred a total of $835,000,000 to the Tanore Account….. funds from the Tanore Account were sent to an account belonging to MALAYSIAN OFFICIAL 1 [NAJIB] and were also used by TAN and LOW to purchase art. Funds from the Tanore Account were also used by LOW to acquire a substantial interest in a luxury hotel in New York City.
Najib must resign
There is much more in this report, but the above facts laid out by the US DOJ, backed by all the evidence available to federal investigators, thanks to the dollar clearing systems, are a devastating indictment of the Malaysian Prime Minister, who must now resign.
Najib has been proven a thief and a liar and to be bad at both. He has taken from his own people and abused their trust and he has shamed Malaysia by proving to be not only the greediest and most excessive Kleptocrat ever recorded, but also the most inept.
Caught red-handed, Najib has no choice. He has to go.
From Sarawak Report:Inside Story Of The "Saudi Royal Donation" - The FBI Files 23 Jul 2016 8:16 AM (9 years ago)
FROM SARAWAK REPORT
TANORE FINANCE - Inside Story Of The "Saudi Royal Donation" - The FBI Files Continued
- 21 July 2016
Confirmed – no Saudi Royal was involved in the 2013 Tanore Finance Corporation transfers
Breaking…
The story of the ‘Saudi Royal Donation’ has gone up in smoke, thanks to the clear and forensic detailprovided by the FBI.
Step by step, down to the date of each dollar transfer, the Feds have spelt out in their report how, in just a matter of days, $681 million (RM2.6bn) raised from 1MDB’s so-called Tun Razak Exchange (TRX) bond issue was passed to Najib’s now notorious personal AmBank account in KL.
They point out that this was the very same bank account into which earlier transfers were traced from the previous 1MDB heists, processed through the companies Good Star and Blackstone, which were both controlled by Jho Low.
Tanore Finance, the company which passed on the cash, was in the name of Jho Low’s associate, Eric Tan and a named signatory was none other than the lawyer Jasmine Loo, whom Low had brought from Sarawak’s UBG corporation to be Executive Director of Group Strategy at 1MDB (before using 1MDB’s money to buy out his own and Chief Minister Taib Mahmud’s interests in UBG).
Out of $2.7 billion raised from the 2013 TRX bond issue $1.59 billion was immediately siphoned into a network of off-shore funds that had been used before to launder money.
These companies passed $835,000,000 straight to Tanore, which in turn passed the $681 million on to Najib’s account, thanks to instructions from Loo.
No Saudi Royal in sight.
Stop pretending folks!
The scheme laid out by the FBI reveals how a tight group of key players had been brought together by this astonishing theft – a gang that had already been identified by Sarawak Report as we observed their partying and close connections.
These were the people around Jho Low and they include the American Joey McFarland, who had become the Co-Producer of Red Granite Pictures together with Najib’s step-son Riza Aziz.
Red Granite producer, Joey McFarland, has been identified by the FBI as a key player in Jho Low’s art purchases using money from Tanore, in his role as ‘authorised agent’ for the Tanore account at Christies….
Joey, who fancies himself as a discerning art collector, was at the centre of a picture-buying spree, in the period after the 2013 election, when Najib sent much of the money back to Tanore from KL.
The FBI details how Jho Low and his gang set about laundering it through art and other high value purchases.
This is the very same party gang, whom Sarawak Report earlier pin-pointed through their online presence, enjoying themselves in the ski centres of the world, cruising on mega-yachts and clubbing in Vegas.
According to their instagram accounts, this tight gang of thieves considered themselves “family” – tied together by their joint misdeeds, which are now bared to the world in this report.
They include Jho Low, Riza Aziz, Jasmine Loo, Joey McFarland, Khadem Al Qubaisi and a pack of Hollywood hangers on, who have been happy to enjoy their lavish hospitality, gambling chips, magnums of champagne, yachts, jets, art auction donations and the like and they include Leo Di Caprio, Alicia Keays, Swizz Beatz and a number of other well known celebrities.
The money trail
There is not a shred of doubt in this indictment that the person identified as ‘Malaysian Official 1′ is Najib Razak.
There are numerous confirmations and clear pointers that the only person to whom the DOJ is referring is the Malaysian Prime Minister and anyone saying otherwise is merely seeking to convince those who have not read the report or the wilfully gullible.
The section on ‘The Tanore Finance Stage’ of the 1MDB theft is as clear an indicator as any of the Prime Minister’s guilt as a mega-thief and liar, in that it deals with the money trail of $681 million, which led from 1MDB’s 2013 bond issue (supposedly for the Tun Razak Exchange project) into Najib’s personal AmBank Account in KL.
The DOJ points out that this is the very same sum and the very same transaction that has been acknowledged by Najib as having entered his account, confirmed by the Malaysian Attorney General.
Except Najib claimed that it was a ‘Saudi Royal Donation’ and said it was later largely returned to the ‘anonymous donor’, whereas the DOJ explains in detail how the money was flashed within two days from the 1MDB bond issue into Najib’s account through a few short banking moves via Tanore Finance which was controlled by Low and his associates.
Squarely said. Is there any Malaysian who can read the above and not conclude that Malaysian Official No 1
is not Najib Razak?
Most of the money was indeed returned to Tanore after the election in August the US investigators say, but it was then used by Jho Low and his gang to invest in art, real estate and other business ventures.
The DOJ devastatingly uses Malaysia’s own Attorney General’s statements, made during his bid to ‘clear’ his boss Najib, against himself, as they quote his admissions about the money:
“263. The Attorney General of Malaysia publicly stated that he conducted an inquiry into the $681 million in payments. In a press release issued on January 26, 2016, the Malaysian Attorney General confirmed that, “the sum of USD681 million (RM2.08 billion) [was] transferred into the personal account of [MALAYSIAN OFFICIAL 1] between 22.03.2013 and 10.04.2013,” and that, “in August 2013, a sum of USD620 million (RM2.03 billion) was returned by [MALAYSIAN OFFICIAL 1]. . . .” The Malaysian Attorney General ultimately characterized the payment of $681 million as a “personal donation to [MALAYSIAN OFFICIAL 1] from the Saudi royal family which was given to him without any consideration.”
It leaves no doubt that the man in question is Najib, as confirmed by AG Apandi’s own statement.
Sarawak Report has distilled the detailed information provided in Section III of the DOJ indictment on the path of the funds raised by the March 2013 bond issue – see the money trail below:
No Saudi Royal Donor in the trail – only 1MDB and Najib!
Sky-Box Art!
The gang of conspirators around Najib and Jho Low are thrown into sharp relief by the ongoing story of the Tanore cash flows. The account at Falcon Bank in Singapore was in the name of Low’s associate Eric Tan, says the DOJ, but the day before the transfers to Najib were made 1MDB’s Executive Director of Group Strategy, Jasmine Loo, was added as a signatory. Loo, a lawyer, was also a long-standing associate of Low, having followed him from UBG in Sarawak.
The DOJ make clear that the reason for adding Loo to the account was to facilitate the transfers and it showed a clear purpose to defraud the fund involving some of its most senior officers.
When in August 2013, after the election, the bulk of the money was returned from Najib’s AmBank account to Tanore Finance, it was used for purposes of self-enrichment by the same gang of conspirators with no care for the public purpose of the fund:
Buying art on the Tanore account
The FBI has traced a huge haul of valuable modern art purchased by the conspirators, often at record prices, over the following months via their account at Christies, as Jho Low and his pals started to style themselves as ‘art lovers’ and ‘art patrons’.
Christies allegedly believed that Low was the owner of Tanore and was making purchases for his corporate collection, although Low went to considerable lengths to attempt to disguise his connection by working through Eric Tan as the nominee beneficial owner and Joey McFarland as the bidder for the pictures.
Christies told the FBI that McFarland and Low attended art auctions in New York together and that at those auctions, McFarland would bid for Tanore.
These items are now on the asset seizure list and they include a number of paintings already identified by Sarawak Report:
“..an unnamed work by Mark Ryden for $714,000 (“Ryden work”) and an unnamed work by Ed Ruscha for $367,500 (“Ruscha work”). At a Post-War & Contemporary Evening Sale on May 15, 2013, Tanore purchased Dustheads, by Jean- Michel Basquiat (“Dustheads”) for $48,843,750; Untitled – Standing Mobile, Alexander Calder (“Calder Standing Mobile”) for $5,387,750; and Tic Tac Toe, by Alexander Calder (“Tic Tac Toe”) for $3,035,750….two works of art in a private sale arranged by Christie’s: Concetto spaziale, Attese, by Lucio Fontana (“the Fontana piece”); and Untitled (Yellow and Blue) by Mark Rothko (“the Rothko piece”)…[and]…a work by Vincent Van Gogh entitled La maison de Vincent a Arles (“VAN GOGH ARTWORK”) for $5,485,000.”
Yet, it is clear that art was not in fact the primary love of partying Jho Low and his friends, who even treated their purchasing jobs like further trips to Vegas casinos.
In November 2013 Low had ordered a special ‘Sky-Box’ to entertain his art auction guests at Christies. A staff email explained to colleagues who were setting up the structure:
“It better look like Ceasar Palace [sic] in there . . .The box is almost more important for the client than the art.”
The DOJ investigation rips apart all attempts by Low to pretend it was not himself behind the art, despite endless subterfuge recorded in emails to disguise his role. Christies apparently tolerated the deceit and kept his identity secret, although Joey’s presence at the auctions alerted SR!
Gift letters – ‘This is definitely not corrupt”!
The fact that these paintings were then “gifted” by Tan to Jho Low and McFarland is the final give-away in the Tanore art buying spree.
However, the DOJ detail a fascinating touch, whereby Jho Low arranged for letters to be sent to justify these various multi-million dollar gifts.
It is a modus-operandi that followers of the donation trails to Najib’s AmBank account will find familiar:
These “gifts” of art purchased by Tanore were memorialized in several “gift letters.” While the body of each letter was identical, each letter referenced a different work or works being gifted,
Likewise, the various ‘donations’ made to Najib via Blackstone, Tanore and a supposed Saudi sheikh (Saud Abdulaziz Majid al-Saud/Prince Faisal bin Turkey bin Bandar Alsaud), were all accompanied by the same pro-forma donation letters addressed to AmBank – and written in similar tone!
“Each of these gift letters was: (a) dated October 2, 2013, (b) addressed to LOW from TAN and Tanore, and (c) contained the subject line: “RE: GIFT OF ART- WORK(S) AS STATED BELOW IN CONSIDERATION OF YOUR FRIENDSHIP, YOUR CHARITABLE CONTRIBUTION TO THE WORLD, AND PASSION IN PROMOTING THE UNDERSTANDING AND APPRECIATION OF ART-WORKS …I wish to gift you ALL of the art-work(s) mentioned in this gift letter in consideration of the followings [sic]:– all the generosity, support and trust that you have shared with me over the course of our friendship, especially during the difficult periods of my life; and– your continuous generosity in providing charitable contributions to advance the well-being and development of our global communities; and– your passion in promoting the understanding and appreciation of art- works.287. Each gift letter closes by stating:
All the art-work(s) gifted to you should not in any event be construed as an act of corruption since this is against the Company and/or my principles and I personally do not encourage such practices in any manner whatsoever.
As the DOJ leaves any reader to conclude, this ludicrous and childish denial of specified corruption bears an almost identical flavour to the letters sent to AmBank by the supposed Sheikh donor to Najib Razak – and the author can only be the youthful, ridiculous and party-loving poser, Jho Low
Same style, same denial as the donation letters to Najib – “The Gift should not in any event be construed as an act of corruption since this is against the practice of Islam and I personally do not encourage such practices in any manner whatsoever…”
Proceeds of money laundering confiscated in the US
The DOJ as plaintiff then proceeds to demand the confiscation of a number of purchases by Jho Low and others with 1MDB’s stolen cash.
The L’Ermitage Hotel in Hollywood was bought from money which can be traced to the theft of $700 million from the PetroSaudi joint venture, says the DOJ.
The Hillcrest Drive, Hollywood Mansion also bought by Jho Low and then passed to Najib’s step-son Riza was also bought with the same stolen money, along with further funds which were stolen from the later scheme with Aabar.
All the money for the $15,917,189.63 purchase of this house for Riza Aziz came from the money stolen by Good Star according to charts provided by the DOJ, thus wholly vindicating Sarawak Report’s expose back in 2014, for which Riza Aziz’s lawyers sought to sue us.
Likewise, Riza’s fancy New York flat was also purchased from the same theft from the PetroSaudi deal “Funds traceable to the $700 million wire transfer from 1MDB to the Good Star Account were used in 2010 to acquire the PARK LAUREL CONDOMINIUM in New York, New York”
Jho Low even bought himself a Bombardier Jet from the same haul: “In 2010, LOW used funds traceable to the $700 million wire transfer from 1MDB to the Good Star Account to acquire the BOMBARDIER JET, a Bombardier Global 5000 aircraft bearing manufacturer serial number 9265 and registration number N689WM, with two Rolls Royce engines bearing manufacturer’s serial numbers 12487 and 12488, for approximately $35,371,335.”
Low’s Time Warner Building penthouse came from the same stolen money as was the most expensive Hollywood mansion in Oriole Drive, which had also been identified by Sarawak Report as belonging to Jho Low.
Research by Sarawak Report indicates that in 2012 Jho Low purchased the most expensive ever mansion in Hollywood Hills at 1423 Oriole Drive, for just under USD$39million
Larry Low
Sarawak Report is also vindicated in its coverage of the role of Low’s father Larry Low in helping him transfer and launder the billions filtched from 1MDB. Millions were passed from Good Star through Larry’s BSI account.
Low continued to use the Good Star money stolen from 1MDB to fund business venture, such as his prestige purchase of the world’s third largest music publishing company EMI Publishing for over a hundred million dollars and Greene Condominium in New York.
The investigators show how Jho Low’s sudden representation of his previously modest family as extremely wealthy had a purpose.
It was an attempt to convince business partners that his funds came from legitimate family sources, as opposed to being stolen. It is for this reason says the DOJ, Low funnelled much of the stolen Good Star and Aabar money through his father’s accounts before purchasing concerns such as EMI Publishing:
In materials that LOW submitted to entities with whom he sought to do business… LOW represented that family resources were a significant source of his wealth. By funneling money through his father’s account for a brief period of time, LOW created the appearance that funds in his personal account, which were used to acquire an interest in EMI Partner A, came from his father rather than from Good Star or ADKMIC.
These acquisitions are now set to be confiscated by the DOJ and the fugitive Jho Low has few secrets left in the game he has tried to play, first his his role as ‘youthful business prodigy’ then as a ‘third generation billionaire’.
It is now for all to see that Jho Low is merely a thief who has been assisted by Malaysian Official No 1.
Red Granite and the Hollywood Jet Set – ‘Hollywood Actor 1′ !
The funds used to pay for the prestige production of the Wolf of Wall Street are “directly traceable to the $700 million wire transfer and $330 million wire transfers unlawfully diverted from 1MDB to the Good Star Account”, says the DOJ.
It entirely vindicates Sarawak Report’s original query whether the film was funded by Riza’s friend Jho Low, despite furious denials at the time. Referring to lead actor Leonardo Di Caprio as “Hollywood Actor 1″ the DOJ confirms that Jho Low’s ring of gangsters was behind the film:
“In his acceptance speech upon winning a Golden Globe for his role in “The Wolf of Wall Street,” Hollywood Actor 1 thanked “the entire production team,” singling out in particular “Joey, Riz, and Jho,” whom he characterized as “collaborators” on the film. Upon information and belief, this reference was to Joey McFarland, a co-founder of Red Granite Pictures, AZIZ, and LOW”
The DOJ report is as detailed as it is damning and now that the Prime Minister of Malaysia has been revealed to be a common crook, he must leave office.
Najib Razak may yet protest his innocence in the face of the overwhelming evidence and claim that he will be vindicated in court.
However, people in positions of leadership can never expect to continue in office with such outrageous and well-founded charges against his head.
If under such circumstances he does not step aside to allow a credible candidate to take his place that in itself would be a criminal act against his people.
Najib must go before he causes further instability in Malaysia.
It’s criminal in Malaysia too! DOJ reminds Malaysia’s law and order enforcers what their duty is regarding
Malaysian Official No 1
From The Wall Street Journal:U.S. Links Malaysian Prime Minister to Millions Stolen From Development Fund 21 Jul 2016 3:29 AM (9 years ago)
U.S. Links Malaysian Prime Minister to Millions Stolen From 1MDB
In 1MDB lawsuit, Justice Department trying to seize more than $1 billion in assets
FROM THE WALL STREET JOURNAL 21 JULY 2016
U.S. prosecutors have linked the prime minister of Malaysia, a key American ally in Asia, to hundreds of millions of dollars allegedly siphoned from one of the country’s economic development funds, according to a civil lawsuit seeking the seizure of more than $1 billion of assets from other people connected to him.
The Justice Department filed lawsuits Wednesday to seize assets that it said were the result of $3.5 billion that was misappropriated from 1Malaysia Development Bhd., or 1MDB, a fund set up by Prime Minister Najib Razak in 2009 to boost the Malaysian economy.
The move sets up a rare confrontation between U.S. prosecutors and an important partner in the fight against terrorism. The moderate Muslim nation is also a counterpoint to China’s rising ambitions in Asia.
No criminal charges were filed.Among the Justice Department’s assertions: That some $1 billion originating with 1MDB was plowed into hotels; luxury real estate in Manhattan, Beverly Hills and London; fine art; a private jet and the 2013 film “The Wolf of Wall Street.” Among those behind the spending, the lawsuit alleges, was Riza Aziz,stepson of Mr. Najib.
“The Malaysian people were defrauded on an enormous scale,” said Deputy FBI Director Andrew McCabe at a news conference announcing the complaints. The asset seizure would be the largest ever by the Justice Department’s anticorruption unit.
The complaint reveals previously unknown allegations about the money that flowed into Mr. Najib’s accounts, such as how prosecutors believe a Saudi prince acted as an intermediary for some of the money and the exact circuit funds followed between a handful of key offshore companies.
Mr. Najib has been at the center of the scandal surrounding 1MDB since The Wall Street Journal reported more than a year ago that hundreds of millions of dollars that originated with 1MDB flowed into his personal bank account. Mr. Najib has said he had done nothing wrong and that any suggestions of wrongdoing were political smears. Malaysian officials have released at least nine statements since last September challenging media reports on 1MDB and accusing the Journal of recycling unproven allegations in its coverage of the fund.
The U.S. case ups the ante by putting the American government’s word behind the charges. The lawsuit doesn’t name Mr. Najib and no charges were brought against him, but there are 32 references in the complaint to “Malaysian Official 1,” who allegedly received hundreds of millions of dollars in funds siphoned from 1MDB.
The U.S. case ups the ante by putting the American government’s word behind the charges. The lawsuit doesn’t name Mr. Najib and no charges were brought against him, but there are 32 references in the complaint to “Malaysian Official 1,” who allegedly received hundreds of millions of dollars in funds siphoned from 1MDB.
A person with direct knowledge of the investigation said “Malaysian Official 1” is Mr. Najib. Descriptions of the official in the filings include information about Mr. Najib’s position at 1MDB along with other identifying details.
Mr. Najib’s press secretary noted the civil lawsuits filed by the Justice Department and said the Malaysian government will fully cooperate with any lawful investigation.
In a statement, 1MDB said it was aware of the U.S. news conference about the enforcement actions, but said it had no assets in the U.S. and wasn't a party to any lawsuits. It said it would cooperate with any lawful investigation.
Mr. Najib has fought off efforts to oust him from his office by rallying members of his party, which has run Malaysia since its founding, and pushing out officials who opposed him
The Malaysian attorney general has said the funds that went into Mr. Najib’s account were a legal donation from Saudi Arabia and cleared him of wrongdoing.
The complaint repeats that description and then describes how the funds came from 1MDB via an offshore entity called Tanore Finance Corporation and other ways.
The Malaysian attorney general has said the funds that went into Mr. Najib’s account were a legal donation from Saudi Arabia and cleared him of wrongdoing.
The complaint repeats that description and then describes how the funds came from 1MDB via an offshore entity called Tanore Finance Corporation and other ways.
The property seizures will put more pressure on Mr. Najib. “Malaysia has now become the global laughingstock,” said opposition leader Tony Pua, a frequent critic of Mr. Najib. He criticized the Malaysian government’s investigations into 1MDB.
Those investigations haven’t yielded much, until now. U.S. officials said they were helped by the Malaysian Anti-Corruption Commission, which showed “tremendous courage” in pursuing the investigation. It is not clear whether their assistance was authorized by the Malaysian government.
Over more than 130 pages, the U.S. case provides the clearest picture to date of the alleged fraud, which prosecutors say began almost from the day 1MDB was founded in 2009. The complaint alleges that money was misappropriated almost immediately after being borrowed by the fund.
Its first-ever deal involved a Saudi Arabian company called PetroSaudi International Ltd. The complaint says that between 2009 and 2011, $1 billion was diverted to a company in the Seychelles called Good Star Ltd., which was beneficially owned by Jho Low, a Malaysian financier and confidant of Mr. Najib. A lawyer for PetroSaudi did not respond to a request for comment.
Mr. Low was deeply involved in 1MDB from the start and was central to the alleged fraud, the complaint said. He took cash that originated at 1MDB and spent heavily at nightclubs and used some of the money transferred into Good Star to pay casino bills, including $12 million to Caesars Palace in Las Vegas and $13.4 million to the owner of the Venetian Las Vegas casino, the filings say.Some $400 million of that money was allegedly brought to the U.S., where Mr. Low bought a Beverly Hills hotel, the L’Ermitage, and made other major purchases. Some money from 1MDB went to Mr. Najib via a Saudi Arabian prince, the complaint alleged.
A representative of Mr. Low declined to comment.
The U.S. actions are part of widening global probes into 1MDB. In Singapore, authorities said Thursday in Asia they had frozen bank accounts holding $184 million of which $88 million belongs to Mr. Low and his family.
Singapore authorities also said they had found “control failings” and breaches of money laundering regulations at several financial institutions in the city-state as part of a wide-raging investigation into misappropriation of funds from 1MDB.
Among the financial institutions found by the central bank to have had “control failings” are Singapore’s largest bank, DBS Bank Ltd., and the Singapore branches of Standard Chartered Bank Plc. and UBS AG.
The banks had “weaknesses in the process of accepting clients and monitoring transactions,” a joint statement issued by Singapore’s police, central bank and attorney general’s chambers said.
Spokespeople at DBS, Standard Chartered and UBS did not respond to a request for comment.
The Malaysian fund raised about $6.5 billion in bonds arranged by Goldman Sachs GroupInc. in 2012 and 2013 and about $2.5 billion of that was diverted into shell companies under the guise of a business arrangement between Malaysia and an Abu Dhabi sovereign-wealth fund, the complaint says.
Goldman said Wednesday that it had “no visibility into whether some of those funds may have been subsequently diverted to other purposes.”
ENLARGE
From left: Riza Aziz, stepson of Malaysian Prime Minister Najib Razak; Jho Low, a Malaysian financier;
and Khadem Al Qubaisi, a former Abu Dhabi managing director of a sovereign-wealth fund. PHOTO: L-R: ZUMA
PRESS (2); AGENCE FRANCE-PRESSE
Almost immediately after receiving $1.4 billion from the first pair of bonds worth $3.5 billion, the alleged conspirators transferred money to Red Granite Capital—a company owned by Mr. Aziz—as well as to a company called Blackstone that was controlled by one of Mr. Low’s associates, Eric Tan, the complaint says. Mr. Tan couldn’t be reached for comment.
Mr. Aziz allegedly used funds from 1MDB to fund the production of “The Wolf of Wall Street.” The government is attempting to seize future proceeds from the film that are due to Red Granite.
Khadem Al Qubaisi, the managing director of the Abu Dhabi sovereign fund that guaranteed the bonds, received $472,750,000 in an account controlled by a company he owned, the complaint says. Funds also went from Blackstone to the private accounts of Mr. Najib, according to the complaint. A representative for Mr. Al Qubaisi didn't reply to requests for comment.
Red Granite Pictures said that to its knowledge, “none of the funding it received four years ago was in any way illegitimate.” It said it is cooperating fully with all inquiries and that it and Mr. Aziz “did nothing wrong.”
Mr. Low quickly became a fixture in international art circles, yet he often went to great lengths to obscure his actual purchases, at one point enlisting a colleague to place a $5.5 million winning bid at Christie’s for a Vincent van Gogh pen-and-ink drawing from 1888, “Vincent’s House in Arles,” according to the complaint. During that sale in early November 2013, the pair sat with friends in a coveted skybox overlooking Christie’s Rockefeller Center salesroom, according to the filing. Of the space, one Christie’s employee emailed a colleague to say, “It better look like Ceasar Palace [sic] in there … The box is almost more important for the client than the art,” the filing said.
That van Gogh is now one of several masterpieces being sought by federal authorities, along with a pair of Claude Monet paintings, a Venetian scene and a waterlily pondscape. The filing said Sotheby’s had the van Gogh and the Monets in its possession as recently as June 7.
In a statement, Sotheby’s said it couldn’t confirm the current whereabouts of the three paintings up for seizure, adding: “Sotheby’s always cooperates with government investigations.”
Christie’s said it has a rigorous anti-money-laundering program, it stopped doing business with Mr. Low when it found out he was under investigation and it is cooperating with authorities.
US JUSTICE DEPARTMENT LAWSUIT AGAINST 1MDB 20 Jul 2016 1:15 PM (9 years ago)
Read the US Department of Justice’s lawsuits below: SCROLL DOWN TO READ
1MDB funds were used to pay for gambling debts in Las Vegas, said US investigators.
"Funds were stolen under the pretense of a 1MDB investment in oil exploration.On paper the US$1 billion was for resource rights, instead (it was) used for personal enrichment...(including) gambling debts in Las Vegas casions, a luxury yacht, interior decorators in London, millions in property including a Bombardier jet costing US$35 million," said Deputy Director of the Federal Bureau of Investigation Andrew McCabe.
He said this at a US Department of Justice press conference on the civil complaints lodged by the department to seize approximately US$1 billion of assets linked to 1MDB.
"The Malaysian people were defrauded on an enourmous scale (in) a scheme which tentacles reached around the world," he a said.
Other assets listed by the department in its lawsuits filed today include:
- Artworks from Claude Monet and Vincent Van Gogh;
- About US$250 million investment in Parklane Hotel, New York;
- US$176 million invested in EMI Music;
- US$100 million worth of real estate in the US, United Kingdom and elswhere, including a mansion in Beverly Hills, a condominium in New York and a townhouse in the United Kingdom; and
- Proceeds from the film 'The Wolf of Wall Street' which Red Granite Pictures has rights to.
Below is the press statement from the US Department of Justice in full:
Attorney General Loretta E Lynch announced today the filing of civil forfeiture complaints seeking the forfeiture and recovery of more than US$1 billion in assets associated with an international conspiracy to launder funds misappropriated from a Malaysian sovereign wealth fund.
Today’s complaints represent the largest single action ever brought under the Kleptocracy Asset Recovery Initiative.
Attorney General Lynch was joined in the announcement by Assistant Attorney General Leslie R Caldwell of the Justice Department’s Criminal Division, US Attorney Eileen M Decker of the Central District of California, FBI Deputy Director Andrew G. McCabe and Chief Richard Weber of the Internal Revenue Service-Criminal Investigation (IRS-CI).
According to the complaints, from 2009 through 2015, more than US$3.5 billion in funds belonging to 1MDB was allegedly misappropriated by high-level officials of 1MDB and their associates. With today’s complaints, the United States seeks to recover more than US$1 billion laundered through the United States and traceable to the conspiracy.
1MDB was created by the government of Malaysia to promote economic development in Malaysia through global partnerships and foreign direct investment, and its funds were intended to be used for improving the well-being of the Malaysian people.
Instead, as detailed in the complaints, 1MDB officials and their associates allegedly misappropriated more than US$3 billion.
“The Department of Justice will not allow the American financial system to be used as a conduit for corruption,” said Attorney General Lynch.
“With this action, we are seeking to forfeit and recover funds that were intended to grow the Malaysian economy and support the Malaysian people.
"Instead, they were stolen, laundered through American financial institutions and used to enrich a few officials and their associates.
"Corrupt officials around the world should make no mistake that we will be relentless in our efforts to deny them the proceeds of their crimes. ”
“According to the allegations in the complaints, this is a case where life imitated art,” said Assistant Attorney General Caldwell.
“The associates of these corrupt 1MDB officials are alleged to have used some of the illicit proceeds of their fraud scheme to fund the production of 'The Wolf of Wall Street', a movie about a corrupt stockbroker who tried to hide his own illicit profits in a perceived foreign safe haven.
"But whether corrupt officials try to hide stolen assets across international borders – or behind the silver screen – the Department of Justice is committed to ensuring that there is no safe haven."
“Stolen money that is subsequently used to purchase interests in music companies, artwork or high-end real estate is subject to forfeiture under US law,” said US Attorney Decker.
“Today’s actions are the result of the tremendous dedication of attorneys in my office and the Department of Justice, as well as law enforcement agents across the country.
"All of us are committed to sending a message that we will not allow the United States to become a playground for the corrupt, a platform for money laundering or a place to hide and invest stolen riches.”
“The United States will not be a safe haven for assets stolen by corrupt foreign officials,” said Deputy Director McCabe.
“Public corruption, no matter where it occurs, is a threat to a fair and competitive global economy.
"The FBI is committed to working with our foreign and domestic partners to identify and return these stolen assets to their legitimate owners, the Malaysian people. I want to thank the FBI and IRS investigative team who worked with the prosecutors and our international partners on this case.”
“Today’s announcement underscores the breadth of the alleged corruption and money laundering related to the 1MDB fund,” said Chief Weber. “We cannot allow the massive, brazen and blatant diversion of billions of dollars to be laundered through US financial institutions without consequences.”
As alleged in the complaints, the members of the conspiracy – which included officials at 1MDB, their relatives and other associates – allegedly diverted more than US$3.5 billion in 1MDB funds.
Using fraudulent documents and representations, the co-conspirators allegedly laundered the funds through a series of complex transactions and fraudulent shell companies with bank accounts located in the Singapore, Switzerland, Luxembourg and the United States.
These transactions were allegedly intended to conceal the origin, source and ownership of the funds, and were ultimately processed through U.S. financial institutions and were used to acquire and invest in assets located in the United States.
In seeking recovery of more than US$1 billion, the complaints detail the alleged misappropriation of 1MDB’s assets as it occurred over the course of at least three schemes.
In 2009, the complaints allege that 1MDB officials and their associates embezzled approximately US$1 billion that was intended to be invested to exploit energy concessions purportedly owned by a foreign partner.
Instead, the funds were transferred through shell companies and were used to acquire a number of assets, as set forth in the complaints.
The complaints also allege that the co-conspirators misappropriated more than $1.3 billion in funds raised through two bond offerings in 2012 and $1.2 billion following another bond offering in 2013.
As further detailed in the complaints, the stolen funds were laundered into the United States and used by the co-conspirators to acquire and invest in various assets.
These assets allegedly included high-end real estate and hotel properties in New York and Los Angeles, a US$35 million jet aircraft, works of art by Vincent Van Gogh and Claude Monet, an interest in the music publishing rights of EMI Music and the production of the 2013 film The Wolf of Wall Street.
The FBI’s International Corruption Unit and the IRS-CI investigated the case. Deputy Chief Woo S Lee and Trial Attorney Kyle R Freeny of the Criminal Division’s Asset Forfeiture and Money Laundering Section and Assistant U.S. Attorneys John Kucera and Christen Sproule of the Central District of California prosecuted the case. The Criminal Division’s Office of International Affairs provided additional assistance.
The Kleptocracy Asset Recovery Initiative is led by a team of dedicated prosecutors in the Criminal Division’s Asset Forfeiture and Money Laundering Section, in partnership with federal law enforcement agencies to forfeit the proceeds of foreign official corruption and, where appropriate, to use those recovered asset to benefit the people harmed by these acts of corruption and abuse of office.
Individuals with information about possible proceeds of foreign corruption located in or laundered through the United States should contact federal law enforcement or send an email to kleptocracy@usdoj.gov
Read more: https://www.malaysiakini.com/news/349261#ixzz4EzB6vtsm
AUDITOR-GENERAL'S REPORT ON 1MDB - FIRST INSTALMENT: " RINGKASAN EKSEKUTIF" (Executive Summary) 14 Jul 2016 7:14 AM (9 years ago)
THE REPORT WHICH THE MALAYSIAN GOVERNMENT DOES NOT WANT ITS CITIZENS TO SEE AND THEREFORE KEPT CLASSIFIED UNDER ITS "OFFICIAL SECRET ACTS"
1MDB Auditor General's Report
- 13 July 2016
This is a copy of the Auditor General’s exact report, which we are uploading in stages over the coming week. We have re-typed the entire report in order to frustrate attempts to persecute whistleblowers. Please excuse any typing errors, the text is an exact replica.
FIRST INSTALMENT FROM SARAWAK REPORT WEBSITE - RINGKASAN EKSEKUTIF
RINGKASAN EKSEKUTIF
1. PENGENALAN
1.1. Latar Belakang
Mesyuarat Jemaah menteri pada 4 Mac 2015 telah memutuskan supaya Jabatan Audit Negara (JAN) menentusahkan (verify) akaun syarikat 1Malaysia Development Berhad (1MDB) dan laporan yang berkaitan hendaklah diserahkan kepada Jawatankuasa Kira-kira Wang Negara (PAC). Sebelum itu, pada 27 Februari 2015, PAC juga telah meminta JAN melaksanakan pengauditan terhadap 1MDB. Sehubungan itu, pengauditan terhadap 1MDB telah dijalankan oleh JAN mulai 10 MAC 2015. Pengauditan yang dijalankan antara 10 Mac hingga 15 Jun 2015 merupakan pengauditan interim dan laporannya dibentangkan kepada PAC pada 9 dan 10 Julai 2015. Laporan Interim membincangkan mengenai analisis penyata kewangan dan pelaburan dalam syarikat usaha sama dengan PetroSaudi, langganan nota murabahah dan Segregated Portfolio Company (SPC). Seterusnya, pengauditan diteruskan sehingga 31 Januari 2016 dan satu Laporan Akhir disediakan mengandungi analisis penyata kewangan dan kedudukan kewangan Kumpulan 1MDB bagi penyata kewangan berakhir pada 31 Mac 2014 dan maklumat kewangan yang diterima sehingga 31 Oktober 2015. Selain itu, analisis juga dibuat terhadap prestasi pelaburan dalam ekuiti, nota murabahah, dana portfolio, Kumpulan SRC, sektor hartanah dan sektor tenaga. Laporan Akhir ini mengambil kira isu yang telah dilaporkan dalam Laporan Interim dan juga perbincangan di peringkat PAC.
1.2. Objektif Pengauditan
Pengauditan ini dijalankan berasaskan mandat daripada Jemaah Menteri dan PAC untuk menentusahkan penyata kewangan Kumpulan 1MDB yang telah diaudit serta menilai prestasi kewangan dan aktiviti Kumpulan 1MDB sama ada menepati objektif asal penubuhan syarikat.
1.3. Skop Dan Metodologi Pengauditan
Semakan Jan dijalankan terhadap penyata kewangan Kumpulan 1MDB yang telah diaudit bagi tempoh kewangan berakhir 31 Mac 2010 sehingga tahun kewangan berakhir 31 mac 2014. Penyata kewangan bagi tahun berakhir 31 Mac 2015 belum disediakan oleh 1MDB untuk diaudit. Namun, JAN telah melaksanakan pengauditan berdasarkan dokumen-dokumen yang diperolehi daripada 1MDB termasuk perbincangan dengan pihak pengurusannya, JAN menghadapi limitasi semasa menjalankan pengauditan di mana sebahagian daripada dokumen asal dan penting lewat diserahkan atau tidak diserahkan oleh 1MDB bagi tujuan pengesahan transaksi dan sebagai bukti audit.
1.4. Limitasi Pengauditan
Limitasi ini memberi impak yang signifikan terhadap pengauditan yang dijalankan dari segi mengesahkan kedudukan sebenar kewangan dan operasi syarikat serta transaksi-transaksi yang berkaitan. Antara dokumen penting yang tidak diserahkan adalah Akaun Pengurusan (Management Account) Kumpulan 1MDB bagi tahun berakhir 31 Mac 2015 dan penyata bank dari institusi kewangan luar negara. Tiada capaian dapat dibuat terhadap komputer, notebooks dan servers di 1MDB bagi mendapatkan data serta maklumat untuk tujuan rujuk silang dan analisi semasa pengauditan.
1.5. Penubuhan 1Malaysia Development Berhad
Menteri Kewangan Diperbadankan (MKD) telah mengambil alih Terengganu Investment Authority Berhad (TIA) yang ditubuhkan oleh Menteri Besar Terengganu Diperbadankan (MBI Terengganu) pada 27 Februari 2009. Tujuan asal penubuhan TIA adalah untuk mewujudkan sovereign wealth fund dengan dana permulaan sejumlah RM11 bilion. Dana tersebut akan diperoleh daripada pendapatan royalty minyak tertunggak sejumlah RM6 bilion dan dana daripada terbitan bon di pasaran kewangan tempatan dan luar negara dengan cadangan Kerajaan persekutuan menyediakan jaminan sejumlah RM5 bilion bersandarkan pendapatan minyak masa depan Terengganu. Kerajaan Persekutuan memutuskan untuk mengambil alih TIA, dan pengambilalihan ini telah disempurnakan pada 31 Julai 2009 dan nama TIA telah ditukarkan kepada 1Malaysia Development Berhad (1MDB) pada 25 September 2009. Setelah diambil alih, 1MDB tidak lagi merupakan sebuah sovereign wealth fund tetapi sebagai sebuah syarikat pembangunan strategic yang menjadi syarikat milik penuh MKD dengan modal dibenarkan berjumlah RM1 bilion dan modal berbayar berjumlah RM1,000,002. Sejak penubuhannya, 1MDB telah terlibat dalam pelaburan antaranya seperti berikut:
a. Usaha sama dengan PetroSaudi Holdings (Cayman) Ltd.;
a. Usaha sama dengan PetroSaudi Holdings (Cayman) Ltd.;
b. Pelaburan dalam Segregated Portfolio Company (SPC);
c. Pelaburan dalam Kumpulan SRC;
d. Pelaburan dalam sektor hartanah; dan
e. Pelaburan dalam sektor tenaga.
1.6. Struktur Tadbir Urus Dan Organisasi Kumpulan 1MDB
1.6.1. Struktur tadbir urus 1MDB dibahagikan kepada tiga peringkat iaitu Lembaga Penasihat, Lembaga Pengarah dan Pengurusan tertinggi. Lembaga Penasihat bertanggungjawab memberikan bimbingan dan nasihat pelaburan serta perniagaan
1.6.2. Pada tahun 2009 dan 2010, 1MDB hanya mempunyai satu subsidiari dan terlibat dalam pelaburan ekuiti dan hartanah. Struktur Kumpulan 1MDB terus berkembang setelah penglibatannya dalam sektor tenaga dengan mengambil alih tiga syarikat pengeluar tenaga bebas yang mempunyai rangkaian di dalam dan luar negara, menjadikan keseluruhan syarikat Kumpulan 1MDB meningkat kepada 96 syarikat pada tahun 2014.
2. PELABURAN KUMPULAN 1MDB
2.1. Islamic Medium term Notes
2.1.1. TIA bercadang untuk menerbitkan Islamic Medium Term Notes (IMTN) berjumlah RM5 bilion sebagai dana permulaan. Pada 1 April 2009, Kerajaan Persekutuan bersetuju untuk memberi jaminan kepada TIA meminjam sehingga RM5 bilion daripada pasaran kewangan tempatan dan luar neara melalui IMTN untuk pelaburan selaras dengan Akta Jaminan Pinjaman (Pertubuhan Perbadanan) 1965. Jaminan ini meliputi bayaran balik prinsipal dan faedah untuk tempoh 30 tahun. Ini disusuli dengan persetujuan Lembaga Pengarah TIA pada 15 April 2009. Perjanjian program telah ditandatangani pada 15 Mei 2009 antara TIA (issuer) dan Amlnvestment Bank Berhad (AmBank) sebagai lead arranger, lead manager dan facility agent. Pada tarikh yang sama, Kerajaan Persekutuan telah mengeluarkan jaminan Kerajaan untuk terbitan IMTN tersebut.
2.1.2. Bagaimanapun, tindakan menandatangani perjanjian program dan pengeluaran Jaminan Kerajaan tanpa mengikut terma dan perancangan Menteri Besar Terengganu Diperbadankan (MBI Terengganu) menimbulkan rasa tidak puas hati MBI Terengganu sebagai pemegang saham TIA. Lembaga Pengarah TIA melalui resolusi bertarikh 22 Mei 2009 mengarahkan penggantungan terbitan IMTN sehingga struktur tadbir urus korporat dan amalan terbaik diwujudkan. Ketua Pegawai Eksekutif TIA diarah mengambil tindakan serta merta untuk menamat dan menggantung semua urusan berkaitan terbitan IMTN. Bagaimanapun, beliau telah menandatangani Perjanjian Langganan dengan AmBank pada 25 Mei 2009 dan perjanjian Aqad, perjanjian Pembelian Murabahah serta perjanjian Penjualan Murabahah pada 26 Mei 2009.
2.1.3. Tindakan Ketua Pegawai Eksekutif TIA meneruskan IMTN menyebabkan beliau digugurkan sebagai pengarah syarikat melalui resolusi pemegang saham TIA bertarikh 27 Mei 2009. Pada tarikh yang sama, satu resolusi Lembaga Pengarah TIA ditandatangani oleh Datuk Ismee dan Encik Shahrol Azral untuk meneruskan terbitan IMTB dan melantik semula Encik Shahrol Azral sebagai Pengarah TIA. Terbitan IMTN tanpa mengambil tindakan terhadap perkara yang dibangkitkan telah mendapat bantahan daripada MBI Terengganu dengan memberi amaran kepada AmBank melalui surat bertarikh 29 Mei 2009 yang didakwa terlibat dalam salah laku dan ketidakakuran semasa terbitan IMTN. Selain itu, Jemaah Menteri juga dimaklumkan pada 3 Jun 2009 bahawa DYMM Sultan Terengganu meminta laporan disediakan mengenai Unauthorized Issuance of IMTN by TIA.
2.1.4. Pada 29 Mei 2009, TIA menerima hasil terbitan bersih IMTN berjumlah RM4.385 bilion daripada nilai penuh RM5 bilion, iaitu pada harga RM87.92 bagi setiap RM100 nilai nominal dengan kadar diskaun sebanyak 12.08% sepertimana saranan AmBank sebagai lead arranger untuk memastikan terbitan IMTN mendapat langganan penuh. Kadar faedah yang dikenakan ialah sebanyak 5.75% setahun dengan kadar pulangan efektif sebanyak 6.68% setahun.
2.1.5. Semasa Mesyuarat Lembaga Pengarah 1MDB pada 10 Oktober 2009, Ketua Pegawai Eksekutif 1MDB memaklumkan IMTN diterbitkan atas saranan penasihat khas TIA bagi tujuan membangunkan Pulau Bidong dengan kerjasama syarikat Mubadala. Selain itu pada bulan Jun 2015, mantan Ketua Pegawai Eksekutf 1MDB memaklumkan terbitan ITMN diteruskan kerana perjanjian program yang ditandatangani pada 15 Mei 2009 merupakan satu bought deal di mana AmBank sebagai lead arranger dan primary subscriber telah mendapat langganan pasaran sekunder bag terbitan bon tersebut.
2.2 Pelaburan Ekuiti Nota Murabahah Dan Dana Portfolio
2.2.1. Pelaburan usaha sama oleh Kumpulan 1MDB dengan syarikat luar negara bermula pada tahun 2009 dengan hasrat meneroka peluang pelaburan di luar negara. Projek usaha sama pertama dimeterai antara 1MDB, PetroSaudi Holdings (Cayman) Ltd. dan 1MDB PetroSaudi Ltd. (syarikat usaha sama) pada 29 September 2009. 1MDB memegang 40% pegangan ekuiti dengan sumbangan pelaburan tunai USD 1 bilion manakala PetroSaudi Holdings (Cayman) Ltd. memegang 60% pegangan ekuiti dalam bentuk aset yang bernilai sekurang-kurangnya USD1.50 bilion. Keputusan pelaburan dalam syarikat usaha sama dibuat dalam tempoh lapan hari, tanpa proses penilaian terperinci dan sebelum isu-isu/syarat-syarat yang dibangkitkan oleh Lembaga Pengarah 1MDB diselesaikan. Terdapat empat syarikat yang berbeza telah didaftarkan denan menggunakan nama asas Petrosaudi tetapi kertas cadangan pelaburan yang dikemukakan kepada Lembaga Pengarah 1MDB tidak menyatakan maklumat tersebut.
2.2.2. Laporan penilaian aset yang disediakan oleh Edward L. Morse dikemukakan pada 29 September 2009, iaitu tarikh yang sama pengesahan pelantikannya oleh Ketua Pegawai Eksekutif 1MDB, dan diterima sehari selepas perjanjian usaha sama ditandatangani. Laporan penilaian tersebut mengambil kira aset mengenai hak penerokaan dan pengeluaran minyak di Turkmenistan dan Argentina. Penilaian telah dilaksanakan terhadap aset milik PetroSaudi International Ltd. meskipun perjanjian usaha sama jelas menyatakan syarikat yang memiliki kesemua hak dan kepentingan terhadap aset yang dipersetujui untuk projek usaha ini ialah PetroSaudi International Cayman.
2.2.3. Di samping itu, perjanjian usaha sama mengandungi klausa yang kurang menjaga kepentingan syarikat. Antaranya, pendahuluan yang diterima oleh 1MDB PetroSaudi Ltd. berjumlah USD700 juta daripada syarikat induknya, PetroSaudi Holdings (Cayman) Ltd. pada 25 September 2009 yang perlu dibayar balik sepenuhnya pada atau sebelum 30 September 2009. Pada 30 September 209, sejumlah USD1 bilion (RM3.487 bilion) telah dipindahkan oleh 1MDB ke dalam dua akaun berasingan, iaitu USD300 juta ke dalam akaun syarikat usaha sama dan sejumlah US700 juta ke dalam akaun syarikat lain yang bertujuan membayar balik pendahuluan oleh syarikat usaha sama tersebut. Kelulusan Lembaga Pengarah 1MDB juga tidak diperoleh sebelum membuat bayaran USD700 juta ke dalam akaun milik syarikat lain.
2.2.4. Selepas enam bulan perjanjian usaha sama ditandatangani, 1MDB melupuskan kesemua 40% pegangan ekuiti bernilai USD1 bilion dalam syarikat usaha sama dengan balasan USD1.20 bilion melalui langganan Nota Murabahah. Nota Murabahah ini memberikan kadar keuntungan 8.67% setahun dan matang pada 31 Mac 2021 serta disokong dengan jaminan korporar daripada PetroSaudi International Ltd. Pada 14 September 2010, langganan tambahan Nota Murabahah berjumlah USD500 juta (RM1.57 bilion) telah dibuat dan sejumlah USD330 juta (RM1.02bilion) telah dibayar antara 20 Mei hingga 25 Oktober 2011. Sebahagian dana bagi membiayai tambahan langganan Nota Murabahah tersebut dibuat melalui pinjaman daripada institusi kewangan.
2.2.5. Setelah 27 bulan melabur dalam Nota Murabahah, pada 1 Jun 2012, 1MDB telah menebus semula Nota Murabahah termasuk keuntungan belum terima berjumlah US2.22 bilion (RM6.80 bilion) melalui asset swap arrangement di mana subsidiari 1MDB, iaitu 1MDB International Holdings Ltd. (1MDB-IHL) mengambil alih 49% kepentingan ekuiti dalam PetroSaudi Oil Services Ltd. (SOSL), subsidiari PetroSaudi International Ltd. 1MDB-IHL juga memeterai call and put option dengan PetroSaudi International Ltd. bagi mengambil alih baki 51% pegangan ekuiti dalam PSOSL pada harga opsyen USD10. Penukaran Nota Murabahah kepada pelaburan ekuiti dalam PSOSL pula dibuat tanpa kajian terperinci untuk mengenal pasti liability, keupayaan menjana dana dan prestasi kewangan yang lepas. Walaupun mengetahui PSOSL beroperasi di perairan Venezuela yang dikenakan sekatan okeh Amerika Syarikat dan kontrak penggerudian yang hamper tamat, keputusan untuk melabur dalam PSOSL tetap diteruskan. Selain itu, kelulusan Lembaga Pengarah dan pemegang saham 1MDB untuk menukar Nota Murabahah kepada ekuiti PSOSL hanya ditandatangani pada 20 Jun 2012 tetapi Ketua Pegawai Eksekutif 1MDB telah menandatangani lima document berkaitan dengan perolehan tersebut pada 1 Jun 2012 menunjukkan Ketua Pegawai Eksekutif 1MDB telah mengambil tindakan sebelum kelulusan Lembaga Pengarah 1MDB.
2.2.6. Selepas 45 hari 1MDB menukar Nota Murabahah kepada pelaburan ekuiti dalam PSOSL, Ketua Pegawai Eksekutif 1MDB telah menyarankan untuk melupuskan pegangan ekuiti dalam PSOSL kerana Venezuela sedang menghadapi sekatan daripada Amerika Syarikat. Sehubungan itu, Lembaga Pengarah 1MDB meluluskan keseluruhan pegangan ekuiti dalam 1MDB-IHL yang memegang 49% ekuiti dalam PSOSL dilupuskan kepada Bridge Partners International Investment Ltd. (Bridge Partners) dengan harga pertimbangan tidak kurang daripada USD2.22 bilion yang akan diuruskan oleh pengurus dana berlesen. Keputusan ini dibuat melalui resolusi Lembaga Pengarah dan pemegang saham 1MDB.
2.2.7. Pada 12 September 2012, sale and purchase agreement untuk melupuskan keseluruhan ekuiti dalam 1MDB-IHL dimeterai antara 1MDB dan Bridge Partners. Sebagai balasan, Bridge Partners mengeluarkan enam nota janji (promissory notes) tanpa faedah bernilai USD2.318 bilion yang perlu dibayar dalam tempoh satu bulan. Pada tarikh yang sama juga, 1MDB melalui subsidiari milik sepenuhnya, Brazen Sky Ltd. telah memeterai Investment Management Agreement dengan Bridge Global Absolute Return Fund SPC (Bridge Global SPC) dan Bridge Partners Investment Management (Cayman) Ltd, untuk melaburkan USD 2.318 ilion. Pelaburan ini dibiayai melalui nota janji (promissory notes) sebagai ganti terimaan tunai yang kemudiannya dilabur dalam pelbagai pelaburan portfolio dalam Segregated Portfolio Company (SPC) di Cayman Islands. Pelaburan ini telah dibuat melalui Bridge Global Absolute Return Fund SPC (Bridge Global SPC), iaitu syarikat yang baru sebulan ditubuhkan, tiada lesen sebagai pengurus dana dan tiada pengalaman untuk menguruskan dana yang besar.
2.2.8. Lembaga Pengarah 1MDB pada 20 mei 2013 bersetuju supaya pelaburan tersebut ditebus secara berperingkat bagi meningkatkan persepsi awam terhadap kredibiliti pelaburan 1MDB. Lembaga Pengarah 1MDB telah mengeluarkan sembilan arahan antara bulan Mei 2013 higga Ogos 2014 kepada pihak pengurusan untuk menyediakan pelan, jadual dan penebusan dana portfolio SP sama ada secara berperingkat atau keseluruhan. Bagaimanapun, tiada tindakan segera diambil oleh pihak pengurusan 1MDB.
2.2.9. Pada 20 Disember 2014, Lembaga Pengarah 1MDB dimaklumkan jumlah terkini dana portfolio SPC yang telah ditebus berjumlah USD1.392 blion dan baki sejumlah USD939.87 juta akan ditebus pada akhir bulan Disember 2014. Daripada hasil penebusan tersebut, sejumlah USD993 juta telah dibayar untuk bayaran penamatan opsyen Aabar. Keseluruhan dana portfolio SPC sebenarnya telah dicagarkan kepada Deutsche Bank bagi pinjaman berjumlah USD975 juta di mana kelulusan Lembaga Pengarah 1MDB tidak diperoleh sebelum urusan ini dibuat. Di samping itu, hasil penebusan portfolio SPC berjumlah USD1.392 bilion yang dimasukkan ke dalam akaun bank Brazen Sky Ltd. telah dipindahkan kepada 1MDB Global Investments Limited (1MDB GIL). Tindakan tersebut tidak mematuhi arahan Lembaga Pengarah 1MDB yang meminta penebusan dana portfolio SPC dibawa balik ke Malaysia.
2.2.10. Asset Sale Agreement ditandatangani pada 2 januari 2015 antara Brazen Sky Ltd. dan Aabar Investments PJS Limited (Aabar Ltd.) bagi memastikan penebusan baki pelaburan portfolio SPC berjumlah USD939.87 juta boleh diterima sebelum 31 Mac 2015 seperti yang diminta oleh Lembaga Pengarah 1MDB. Bagaimanapun, perjanjian tersebut dimeterai tanpa pengetahuan Lembaga Pengarah dan pemegang saham 1MDB. Sehubungan itu, Lembaga Pengarah 1MDB bersetuju pada 25 Mac 2015 untuk menamatkan Asset Sale Agreement dan digantikan dengan Share Sale Agreement di mana keseluruhan ekuiti Brazen Sky Ltd. dijual kepada Aabar Ltd. dengan harga pertimbangan berjumlah USD1.20 bilion. Bagaimanapun, Share Sale Agreement tersebut tidak dimuktamadkan.
2.2.11. Pada 28 Mei 2015, Term Sheet For Settlement Arrangements (Binding Term Sheet) telah ditandatangani antara Kumpulan 1MDB, Menteri Kewangan Diperbadankan (MKD), International Petroleum Investment Company (IPIC) dan Aabar Investments PJS Groups (Aabar). Antara terma penting dalam Binding Term Sheet tersebut adalah IPIC akan membayar 1MDB sejumlah USD1 bilion sebelum atau pada 4 Jun 2015 dan mengambil alih obligasi bayaran faedah dan prinsipal bagi dua Nota USD yang masing-masing berjumlah USD 1.75 bilion. Manakala di pihak 1MDB, dalam mesyuarat pada 14 Jun 2015, Lembaga Pengarah 1MDB dimaklumkan antara aset yang dikenal pasti untuk dipindah milik kepada IPIC/Aabar adalah baki pelaburan portfolio SPC berjumlah USD939.87 juta.
2.2.12. Secara keseluruhannya, bagi tempoh empat tahun mulai penubuhan 1MDB pada tahun 2009 hingga 2012 pelaburan awal 1MDB dengan menggunakan dana terbitan ITN berjumlah RM5 bilion, instrument pelaburan 1MDB telah bertukar sebanyak empat kali. Bermula daripada pelaburan ekuiti USD1 bilion (RM3.49 bilion) pada tahun 2009 dalam syarikat usaha sama dengan subsidiari PetroSaudi International Limited, diikuti dengan pelaburan Nota Murabahah berjumlah USD830 juta (RM2.59 bilion) pada tahun 2011 dan 2012 hinggalah ditukar kepada pelaburan portfolio SPC berjumlah USD2.318 bilion (RM7.18 bilion) di Cayman Islands pada bulan September 2012. Penebusan sebahagian pelaburan portfolio SPC pada tahun 2014 telah digunakan untuk membiayai pelbagai komitmen syarikat dan pelaburannya. Pelaburan ini akhirnya berbaki USD939.87 juta dalam bentuk unit pelaburan portfolio SPC pada 31 Mac 2015.
3. PELABURAN DALAM KUMPULAN SRC
3.1. Cadangan awal penubuhan sebuah Strategic Resource Company telah dikemukakan oleh 1MDB kepada YAB Perdana Menteri pada 24 Ogos 2010. Unit Perancang Ekonomi (EPU) telah mengkaji cadangan ini dan meluluskan penubuhannya setelah syarat-syarat yang ditetapkan dipenuhi. Seterusnya 1MDB telah menubuhkan SRC International Sdn. Bhd. (SRC) pada 7 Januari 2011. Berdasarkan Memorandum and Articles of Association (M&A), objektif penubuhan SRC adalah untuk mengenal pasti dan melabur dalam projek yang berkaitan dengan carigali, pengekstrakan, pemprosesan dan perdagangan sumber tenaga konvensional dan sumber asli diperbaharui dan mineral termasuk memperoleh dan memegang saham, stok atau sekuriti syarikat, menurut Rancangan Perniagaan SRC bagi tempoh tahun 2011 sehingga 2015, SRC akan membekalkan sumber arang batu untuk keperluan jangka panjang sumber asli strategik negara dalam tahun keempat syarikat beroperasi (tahun 2014).
3.2. Sebagai subsidiari 1MDB SRC memperoleh sumber kewangan daripada geran Kerajaan dalam bentuk geran pembangunan berjumlah RM15 juta daripada RM20 juta yang diluluskan oleh Unit perancang Ekonomi (EPU) dan pembiayaan berjumlah RM2 bilion daripada Kumpulan Wang Persaraan (Diperbadankan) (KWAP) . Pembiayaan berjumlah RM2 bilion telah diterima pada 29 Ogos 2011 merupakan pembiayaan berjangka untuk tempoh 10 tahun. Pinjaman ini mendapat jaminan Kerajaan yang meliputi prinsipal dan faedah pembiayaan berjumlah RM2.902 bilion.
3.3. Projek usaha sama SRC International (Malaysia) Limited (SRCI), iaitu subsidiari SRC dengan Aabar Investments PJS (Aabar) pada 3 November 2011 telah menubuhkan syarikat Aabar-SRC Strategic Resources Limited (ASRC). Modal berbayar awal ASRC berjumlah USD120 juta dengan sumbangan masing-masing sejumlah USD60 juta. Lembaga Pengarah SRCI telah meluluskan pelaburan bernilai USD45.50 juta dalam industri arang batu di Mongolia tanpa bukti menunjukkan feasibility study terhadap status projek yang akan dilaksanakan oleh ASRC dalam syarikat Gobi Coal & Energy Limited (GCE). SRC turut membuat pelaburan di dalam PT ABM Investama TBK, Indonesia sejumlah USD120 juta (RM366.68 juta) melalui saham tersiar harga yang telah disenaraikan di Indonesia Stock Exchange. Semasa mesyuarat pada 14 Februari 2012, Ketua Pegawai Eksekutif SRC melaporkan anggaran keuntungan atas pelaburan tersebut adalah berjumlah USD4 juta.
3.4. Pada 14 Februari 2012, pegangan saham SRC oleh 1MDB telah dipindah milik kepada MKD dengan kaedah pengambilalihan saham melalui bayaran interim dividend-in-specie. Pemindahan saham SRC ini telah mengurangkan kerugian operasi Kumpulan 1MDB daripada RM25 juta kepada RM16.2 juta, menurunkan nilai gearing ratio 1MDB daripada 12 kali kepada 9.5 kali dan mengurangkan jumlah jaminan Kerajaan sejumlah RM2.902 bilion kepada Kumpulan 1MDB.
4. PELABURAN DALAM HARTANAH KUMPULAN 1MDB
4.1. Kumpulan 1MDB telah melabur dalam pasaran hartanah domestik untuk mempelbagaikan portfolio pelaburan dengan matlamat untuk menjana pulangan pelaburan jangka masa panjang. Bermula tahun 2010 sehingga bulan September 2015, Kumpulan 1MDB telah membuat perolehan lima aset hartanah, iaitu tanah projek Tun Razak Exchange (TRX); tanah projek Bandar Malaysia; tanah di Air Itam, Pulau Pinang; tanah di Alor Gajah, Melaka dan tanah di Pulau Indah, Selangor. Keseluruhan kos perolehan tanah tersebut berjumlah RM2.111 bilion.
4.2. Projek TRX dirancang bagi membangunkan Kuala Lumpur sebagai pusat kewangan antarabangsa dan projek Bandar Malaysia disasarkan untuk pembangunan semula Lapangan Terbang Sungai Besi Kuala Lumpur sebagai pembangunan bercampur antara perumahan dan komersil. Kos perolehan tanah TRX yang dibeli pada tahun 2010 adalah berjumlah RM302.38 juta. Pada peringkat awal, 1MDB mempelawa pelabur luar negara sebagai rakan pelabur memandangkan projek TRX merupakan satu projek pembangunan berskala besar, berimpak tinggi dan memerlukan pelaburan yang besar. Perjanjian usaha sama antara 1MDB dan Aabar Investments PJS (Aabar) telah ditandatangani pada 12 Mac 2013. Bagaimanapun, pembangunan projek TRX secara usaha sama dengan Aabar tidak direalisasikan dan memberi impak kepada fasa pembangunan projek.
4.3. Selaras dengan usaha pengkomersilan dan penjanaan dana bagi Kumpulan 1MDB, sehingga bulan September 2015, sebanyak lima plot tanah TRX telah dijual dengan harga RM1.358 bilion manakala baki 11 plot tanah dalam proses rundingan dengan cadangan harga jualan berjumlah RM2.592 bilion. Selain itu, Kumpulan 1MDB juga terlibat dalam pembangunan sendiri bagi pembinaan sebuah bangunan yang akan disewakan kepada sebuah institusi perkhidmatan kewangan antarabangsa selama 15 tahun bermula pada tahun 2019 hingga 2033 dengan anggaran pulangan berjumlah RM537.38 juta. Manakala pembangunan secara usaha sama pula dianggarkan memberi pulangan kasar jangka panjang bagi tempoh tahun 2015 hingga 2024 berjumlah RM1.73 bilion. Pengkomersilan projek TRX bagi tempoh tahun 2015 hingga 2033 melalui penjualan plot tanah, pembangunan sendiri dan projek usaha sama dijangka akan memberi pulangan berjumlah RM3.73 bilion setelah mengambil kira jangkaan kos pembangunan infrastruktur berjumlah RM3.569 bilion.
4.4. Bagi menanggung kos pembangunan infrastruktur projek TRX, subsidiari 1MDB iaitu 1MDB Real Estate Sdn. Bhd. (kini dikenali sebagai TRX City Sdn. Bhd.) bergantung sepenuhnya kepada penjualan plot tanah. Bagaimanapun, sejumlah RM1.095 bilion daripada hasil jualan lima plot tanah telah didahulukan kepada 1MDB. Bagi tahun 2016 dan 2017, projek TRX dijangka menghadapi aliran tunai negatif kerana hasil terimaan projek tidak mencukupi untuk menampung kos infrastruktur dan pembinaan. Bagaimanapun, aliran tunai negative akan lebih kecil nilainya jika 1MDB memulangkan pendahuluan yang diambil daripada 1MDB RE. Di samping itu, walaupun KLIFD Sdn. Bhd. iaitu SPV yang diwujudkan bagi membiayai projek TRX telah mendapatkan dana dalam bentuk revolving credit berjumlah RM229.50 juta pada bulan Ogos 2015, dana tersebut tidak digunakan untuk membiayai kos pembangunan projek TRX.
4.5. Projek Bandar Malaysia adalah satu projek jangka panjang untuk tempoh 26 tahun yang meliputi empat fasa pembangunan, iaitu penempatan semula PUKL Sungai Besi, pembangunan reka bentuk Bandar Malaysia, urusan tanah dan pelaksanaan pembangunan. Tanah Bandar Malaysia telah diperoleh dengan kos berjumlah RM368.72 juta dan kos projek pembangunan penempatan semula tapak gantian berjumlah RM2.717 bilion di mana sejumlah RM1.117 bilion telah dibayar oleh Kerajaan dan baki sejumlah RM1.60 bilion akan ditanggung oleh 1MDB. Bagaimanapun, 1MDB telah menggunakan sejumlah RM228 juta daripada peruntukan Kerajaan bagi membayar komitmen faedah hutang Kumpulan 1MDB dan tidak digunakan mengikut tujuan asal peruntukan Kerajaan.
4.6. Keseluruhan pembangunan semula tanah lapangan terbang Sungai Besi ini dijangka selesai sepenuhnya pada tahun 2040 di mana fasa penempatan semula PUKL Sungai Besi akan siap pada akhir tahun 2016. Perbadanan Perwira Harta Malaysia (PPHM) telah dilantik sebagai kontrator utama bagi mereka bentuk, membina dan menyiapkan lapan lokasi penempatan semula melalui kaedah turnkey dengan nlai kontrak keseluruhan berjumlah RM2.103 bilion. Sehingga bulan Ogos 2015, lima daripada lapan lokasi penempatan semula telah lewat daripada perancangan asal antara 132 hari hingga 600 hari. Antara puncanya adalah kelewatan penyerahan ka wasan, penangguhan kelulusan daripada pihak berkuasa tempatan, kelewatan pengesahan oleh pengguna keadaan cuaca dan banjir kilat dalam bulan November dan Disember 2014.
4.7. Selain itu, tunggakan bayaran berjumlah RM396.42 juta kepada PPHM sehingga bulan September 2015 turut menjejaskan kemajuan kerja di tapak binaan. Ini adalah kerana sejumlah RM1.926 bilion (51.3%) daripada pinjaman dan sukuk berjumlah RM3.75 bilion yang diperoleh bagi membiayai kos penempatan PUKL Sungai besi dan pembangunan Bandar Malaysia telah didahulukan kepada 1MDB. Selaras dengan pelan rasionalisasi Kumpulan 1MDB, pada 31 Disember 2015, 1MDB mengumumkan penjualan 60% ekuiti Bandar Malaysia Sdn. Bhd. kepada Konsortium Iskandar Waterfront Holdings Sdn. Bhd. (IWH) dan China Railway Engineering Corporation (M) Sdn. Bhd. (CREC) dengan nisbah kepentingan 60:40. Konsortium IWH-CREC telah menilai 100% tanah Bandar Malaysia pada nilai RM12.35 bilion di mana nilai 60% tanah adalah bersamaan RM7.41 bilion. Urus niaga ini dijangka selesai pada bulan Jun 2016.
4.8. Tanah Air Itam diperoleh bagi tujuan pembinaan perumahan mampu milik dan projek pembangunan lain di Pulau Pinang dalam menangani keperluan perumahan di negeri tersebut. Pemilikan tanah Air Itam oleh Kumpulan 1MDB sebanyak 85.7% kepentingan bahagian untuk lot tanah yang tidak dipecahbahagikan diperoleh daripada pembelian 100% ekuiti dalam syarikat Gerak Indera Sdn. Bhd. dan Farlim Properties Sdn. Bhd. (FPSB) serta tiga lot tambahan daripada Farlim Group (Malaysia) Sdn. Bhd. dengan harga perolehan berjumlah RM1.056 bilion dan perbelanjaan berkaitan berjumlah RM15.25 juta. Kadar purata perolehan tanah Air Itam oleh Kumpulan 1MDB adalah dalam lingkungan kadar purata harga pasaran yang munasabah dan berpatutan untuk tanah di kawasan berkenaan kecuali bagi bahagian kepentingan FPSB yang jauh lebih tinggi berbanding harga pasaran. 1MDB masih belum memiliki 100% kepentingan tanah berikutan persetujuan berhubung pertukaran baki pemilikan 14.3% bahagian tanah belum dimuktamadkan. Pembangunan tanah tersebut juga sukar untuk dilaksanakan jika sokongan penuh Kerajaan Negeri tidak diperoleh dan masalah pendudukan tanah oleh hampir 2,000 setinggan tidak diselesaikan.
4.9. Selaras dengan hasrat 1MDB untuk memperkembangkan sektor tenaga, usaha awal bagi perolehan tanah Pulau Indah, Selangor bagi pembinaan loji jana kuasa tambahan dibuat mulai tahun 2014 dan selesai sepenuhnya pada akhir bulan Jun 2015. Perolehan tanah Pulau Indah dibuat oleh Ivory Merge Sdn. Bhd., sub-subsidiari 1MDB Energy Holdings Limited melalui perolehan 100% ekuiti Tadmax Power Sdn. Bhd., iaitu pemilik berdaftar bagi tanah seluas 318.41 ekar dengan harga belian berjumlah RM344.24 juta. Tanah Pulau Indah pada asalnya dibeli untuk pembangunan Projek 3B. Bagaimanapun, Projek 3B telah dilaksanakan di Port Dickson, Negeri Sembilan kerana tanah di Pulau Indah tidak sesuai untuk pembangunan loji jana kuasa. Pada bulan Julai 2015, Lembaga Pengarah 1MDB telah melantik Savills (Malaysia) Sdn. Bhd. sebagai ejen eksklusif untuk penjualan tanah ini yang dijangka selesai pada bulan Mac 2016.
4.10. Kumpulan 1MDB telah mendapatkan tiga pinjaman domestik berjumlah RM1.58 bilion, satu pinjaman berjangka berjumlah USD150 juta, satu terbitan Nota USD berjumlah USD3 bilion dan satu terbitan sukuk berjumlah RM2.40 bilion bagi membiayai perolehan aset hartanah. Daripada pinjaman domestik dan terbitan sukuk berjumlah RM3.98 bilion, hanya sejumlah RM246 juta digunakan bagi membiayai projek TRX dan projek Bandar Malaysia serta sejumlah RM2.16 bilion telah didahulukan kepada 1MDB. Manakala bagi Nota USD 3 bilion yang diterbitkan untuk tujuan modal pelaburan dalam Abu Dhabi Malaysia Investment Company Limited (ADMIC) dan kegunaan korporat am, hasil terbitan tersebut tidak disalurkan untuk pembangunan projek TRX.
4.11. Pelaburan hartanah Kumpulan 1MDB merupakan projek strategik yang berpotensi menarik pelabur dan membangunkan Malaysia sebagai pusat bandar bertaraf antarabangsa. Bagaimanapun, sejumlah besar sumber pembiayaan yang diperoleh bagi tujuan pembangunan hartanah (projek TRX dan Bandar Malaysia) yang didahulukan kepada 1MDB telah menjejaskan kemajuan projek tersebut.
5. PELABURAN DALAM SEKTOR TENAGA KUMPULAN 1MDB
5.1. Di peringkat awal penubuhannya pada tahun 2009, 1MDB telah mula mengorak langkah dalam pelaburan sektor tenaga menerus usaha sama dengan negara China dan Qatar dalam bidang peleburan aluminium di Sarawak menggunakan sumber tenaga daripada Projek Bakun Hidroelektrik, pelaburan dalam ekuiti GDF Suez SA dan cadangan pembinaan loji re-gasifikasi dan loji jana kuasa berasaskan gas. Bagaimanapun, pelaburan awal ini tidak berjaya dilaksanakan kerana kekangan sumber tenaga dan dasar Kerajaan yang tidak membenarkan pihak selain Petronas untuk membekalkan gas kepada syarikat pengeluar tenaga bebas (IPP).
5.2. Dalam tempoh tahun 2012 sehingga 2014, Kumpulan 1MDB telah membuat pelaburan sejumlah RM12.07 bilion dalam tiga buah syarikat IPP, iaitu Tanjong Energy Holdings Sdn. Bhd. (RM8.50 bilion), Mastika Lagenda Sdn. Bhd. (RM 2.342 bilion) dan Jimah Energy Ventures Sdn. Bhd. (RM1.225 bilion). Perolehan ekuiti ini telah dibiayai melalui pengambilan tiga pinjaman (RM7.47 bilion), dua terbitan Nota USD (RM10.69 bilion) dan pendahuluan (RM625 juta) keseluruhannya berjumlah (RM18.70 bilion). Nilai pembiayaan dan pinjaman yang diperoleh adalah melebihi nilai perolehan ekuiti kerana ia juga telah digunakan untuk tujuan lain termasuk kegunaan modal kerja dan korporat am.
5.3. Lembaga Pengarah 1MDB telah membincangkan dan mendengar taklimat daripada Goldman Sachs dan pihak pengurusan 1MDB bagi perolehan ekuiti Tanjong Energy Holdings Sdn. Bhd. (TEHSB) dan Jimah Energy Ventures Sdn. Bhd (Jimah) sebelum kelulusan perolehan dibuat. Bagaimanapun, bagi perolehan ekuiti Mastika Lagenda Sdn. Bhd. (MLSB), cadangan perolehan tidak diperbincangkan dan dijelaskan dalam mesyuarat dengan terperinci kerana ianya telah dikemukakan melalui resolusi bertulis. Terma dan syarat serta kaedah pembiayaan yang dimaklumkan dalam resolusi adalah hampir sama dengan perolehan yang pertama diluluskan lima bulan sebelumnya. Kertas cadangan bagi perolehan MLSB pada resolusi bertulis bertarikh 10 Ogos 2012 adalah tidak lengkap. Laporan perunding yang dilantik untuk melaksanakan due diligence bagi perolehan MLSB juga tidak dibentangkan dalam mesyuarat kepada lembaga Pengarah sebelum kelulusannya diberi.
5.4. Penetapan harga perolehan atau enterprise value bagi ketiga-tiga ekuiti syarikat IPP yang diperoleh telah dibuat oleh Goldman Sachs selaku perunding kewangan menggunakan kaedah discounted cash flow (DFC). Enterprise value telah dibuat berdasarkan andaian tunai yang dijangka terima pelanjutan tempoh konsesi selama lima tahun. Andaian bagi pengiraan enterprise value TEHSB dan MLSB turut mengambil kira terminal value of existing assets manakala bagi Jimah andaiannya adalah zero terminal value. Kadar diskaun yang digunakan untuk pengiraan DCF bagi TEHSB adalah antara 5% hingga 6% manakala bagi MLSB antara 4.75% hingga 5.25%. Kadar diskaun ini adalah dalam lingkungan kadar kos pinjaman pembiayaan yang diperoleh. Bagaimanapun, bagi pengiraan enterprise value Jimah, Goldman Sachs buat pertama kalinya telah menggunakan dua kadar diskaun yang lebih tinggi berbanding sebelumnya semasa pengiraan DCF iaitu menggunakan WACC pada kadar 8% dan kos ekuiti pada 12% atas margin operasi. Harga perolehan yang diluluskan oleh Lembaga Pengarah 1MDB adalah berdasarkan pengiraan enterprise value pada kadar 12% dan bukannya 8%.
5.5. Secara keseluruhannya, pengiraan enterprise value bagi perolehan Jimah lebih menguntungkan 1MDB berbanding perolehan TEHSB dan MLSB. Ini adalah kerana dengan mengenakan kadar diskaun yang lebih rendah dan terminal value dalam pengiraan DFC di TEHSB dan MLSB, enterprise value yang dihasilkan adalah lebih tinggi nilainya. Terminal value yang telah diambil kira dalam pengiraan enterprise value bagi TEHSB dan MLSB juga adalah tidak wajar kerana aset tersebut tidak lagi bernilai pada akhir tempoh konsesi. Kos loji jana kuasa ini juga sebenarnya telah dibayar balik kepada pengusaha IPP melalui pembayaran capacity payment dalam PPA. Oleh itu, andaian yang digunakan oleh perunding telah mengakibatkan 1MDB perlu membayar harga perolehan yang lebih tinggi bagi TEHSB dan MLSB berbanding Jimah.
5.6. Penyata kewangan Tanjong Power Holdings Sdn. Bhd. (TPHSB), syarikat induk TEHSB bagi tahun berakhir 31 Januari 2013 mencatatkan keuntungan berjumlah RM7.96 bilion (iaitu 93.6% daripada balasan RM8.50 bilion). Keuntungan ini diperoleh selepas mengambil kira nilai buku pelaburan dalam subsidiari berjumlah RM450.99 juta dan kos berkaitan pelupusan berjumlah RM84.56 juta. Penyata kewangan syarikat induk MLSB, berjumlah RM1.89 bilion (iaitu 80.8% daripada balasan RM2.34 bilion) hasil daripada pelupusan keseluruhan kepentingan Genting Bhd. Bagaimanapun, maklumat nilai buku pelaburan bagi penjualan ekuiti MLSB dan tanah tapak loji tidak dinyatakan dalam nota penyata kewangan Kumpulan Genting Bhd.
5.7. Intangible Asset yang direkodkan dalam penyata kewangan Kumpulan 1MDB selepas perolehan ketiga-tiga syarikat IPP berjumlah RM10.75 bilion terdiri daripada Service Concession Agreement berjumlah RM7.45 bilion dan goodwill on acquisition berjumlah RM3.30 bilion. Berdasarkan penyata kewangan Kumpulan 1MDB bagi tahun berakhir 31 Mar 2013, goodwill yang dirosot nilai berjumlah RM1.19 bilion manakala tiada rosot nilai pada tahun kewangan berakhir 31 Mac 2014. Bagaimanapun, pihak pengurusan telah membuat andaian perlanjutan selama lima tahun tempoh konsesi dan nilai jangkaan aliran tunai yang akan diterima berjumlah RM1.96 bilion. Memandangkan Kerajaan telah membuat tawaran secara tender untuk pelanjutan tempoh konsesi mulai tahun 2012, ia bermaksud perlanjutan konsesi tidak diberi secara automatik. Berdasarkan simulasi JAN, sekiranya pelanjutan tempoh konsesi tidak diambil kira, nilai recoverable amount akan berkurang daripada RM10.88 bilion kepada RM8.92 bilion. Dalam keadaan ini, rosot nilai sejumlah RM1.987 bilion akan dikenakan kerana nilai recoverable amount berjumlah RM8.92 bilion adalah kurang daripada carrying amount berjumlah RM10.91 bilion.
5.8. Nilai pinjaman/ pembiayaan yang telah diambil di peringkat awal antara bulan Mei 2012 sehingga Januari 2014 bagi membiayai perolehan syarikat IPP berjumlah RM18.79 bilion. Bagaimanapun sehingga bulan Jun 2015, jumlah pinjaman berkaitan dengan pelaburan dalam syarikat IPP telah meningkat kepada RM31.79 bilion yang mana sejumlah RM13.34 bilion telah dilunaskan sehingga 31 Oktober 2015. Peningkatan ini adalah kerana tiga pinjaman awal daripada keseluruhan lima pinjaman/pembiayaan yang diambil untuk membiayai perolehan syarikat IPP tidak dapat dilunaskan pada tarikh matang. Pinjaman tersebut merupakan pinjaman jangka pendek dengan tempoh matang antara 10 hingga 48 bulan di mana mengikut perancangan asal pihak pengurusan berhasrat untuk melunaskan pinjaman menggunakan dana yang dijangka diterima daripada penyenaraian IPO. Apabila IPO ditangguhkan, 1MDB tidak mempunyai sumber dana lain untuk melunaskan pinjaman. Memandangkan Komitmen Tanjong tidak dapat dilaksanakan, 1MDB terpaksa membiayai semula satu pinjaman dan mengambil tiga pinjaman baru yang mana sebahagian besar daripada jumlah yang diterima telah digunakan untuk melunaskan pinjaman asal perolehan syarikat IPP bagi mengelakkan masalah event of default.
5.9. Daripada jumlah tersebut, sebanyak dua Nota USD berjumlah USD3.50 bilion (RM10.69 bilion) telah diterbitkan bagi membiayai pelaburan sektor tenaga serta kegunaan modal kerja dan korporat am. Penerbitan kedua-dua Nota USD1.75 telah diluluskan tanpa jaminan Kerajaan. Antara kelemahan serta pemerhatian berkaitan pengurusan terbitan Nota USD oleh Goldman Sachs melibatkan 1MDB, IPIC dan Aabar Ltd. adalah seperti berikut:
1MDB dan IPIC telah memberi jaminan bagi kedua-dua terbitan Nota USD bertarikh Mei 2012 dan Oktober 2012. Bagaimanapun, Deed of Guarantee daripada kedua-dua pihak ini tidak dikemukakan untuk semakan JAN.
Jaminan yang diberi oleh IPIC bagi terbitan Nota USD pertama pada bulan Mei 2012 telah dijamin secara back to back guarantee melalui Interguarantor Agreement yang ditandatangani atara 1MDB an IPIC.
Menurut perjanjian tersebut, 1MDB dikehendaki mendapatkan sokongan dan dana secukupnya daripada Menteri Kewangan Diperbadankan (MKD) untuk membayar balik kepada IPIC sekiranya 1MDB gagal membayar kesemua kos, perbelanjaan dan semua tanggungan berkaitan Nota ini.
Sungguhpun jaminan telah diberikan oleh IPIC, 1MDB masih menanggung semua risiko sekiranya berlaku kegagalan membayar semua kos berkaitan pembiayaan Nota USD tersebut.
Interguarantor Agreement tidak tersenarai sebagai dokumen yang diluluskan oleh Lembaga pengarah 1MDB bagi terbitan Nota USD yang kedua (Oktober 2012) sebagaimana telah diluluskan untuk terbitan Nota USD yang pertama (Mei 2002). Pihak JAN juga tidak dapat mengesahkan sama ada Interguarantor Agreement ini turut disediakan bagi terbitan Nota USD1.75 bilion yang kedua pada 17 Oktober 2012.
Menurut Goldman Sachs, sebagai balasan kepada jaminan IPIC bagi kedua-dua terbitan Nota USD, 1MEL dan 1MELL masing-masing akan menyediakan opsyen kepada Aabar Ltd. bagi memperoleh 49% ekuiti dalam 1MESB dan 1MELSB pada harga yang tetap. Bagaimanapun, dokumen Option Agreement bagi terbitan Nota USD yang kedua tidak dikemukakan untuk pengauditan.
Selain daripada opsyen kepada Aabar Ltd., 1MDB juga telah bersetuju untuk memberi credit enhancement dalam bentuk pembayaran tunai (security deposit) kepada Aabar Ltd. Bayaran ini perlu dibuat dalam tempoh tiga hari selepas terimaan terbitan Nota USD sebagaimana ditetapkan dalam Collaboration Agreement for Credit Enhancement bertarikh 21 mei 2012 dan 19 Oktober 2012. Balasan ini diperlukan kerana jaminan IPIC telah membolehkan 1MEL dan 1MELL yang tidak mempunyai rating menerbitkan Nota USD menggunakan rating IPIC. Bagaimanapun, Lembaga Pengarah 1MDB tidak pernah dimaklumkan mengenai credit enhancement yang sebenarnya dipersetujui oleh pengurusan 1MDB yang telah dipertanggungjawabkan untuk memuktamadkan segala urusan berkaitan terbitan Nota USD. Kelulusan khusus daripada Lembaga Pengarah 1MDB tidak diperoleh bagi membolehkan 1MEHL selaku syarikat induk kepada 1MEL dan 1MELL memberi credit enhancement dalam bentuk pembayaran tunai (security deposit).
Collaboration Agreement for Credit Enhancement bertarikh 21 Mei 2012 dan 19 Oktober 2012 yang dikemukakan kepada JAN adalah tidak lengkap.
Jaminan daripada IPIC telah mengakibatkan 1MDB terpaksa memberi dua jenis balasan atau collateral iaitu opsyen dan security deposit.
Bagaimanapun, satu-satunya dokumen yang telah ditandatangani oleh IPIC iaitu Interguarantor Agreement bertarikh 21 Mei 2012, tiada sebarang klausa atau terma dan syarat perjanjian yang menyatakan keperluan 1MDB atau syarikat subsidiarinya yang menerbitkan Nota USD untuk melaksanakan opsyen dan security deposit sebagaimana yang telah dilaksanakan oleh pihak pengurusan 1MDB.
Terimaan bersih kedua-dua Nota USD adalah berjumlah USD3.197 bilion selepas mengambil kira kos transaksi berjumlah USD302.50 juta (8.6%). Daripada jumlah ini, hanya USD1.830 bilion (52.3%) sahaja yang boleh digunakan untuk perbelanjaan pelaburan (perolehan TEHSB dan MLSB), operasi dan modal kerja 1MDB. Ini adalah kerana USD1.367 bilion (39.1%) telah dibayar kepada Aabar Ltd. sebagai security deposit.
Security deposit yang dibayar kepada Aabar Ltd. hanya akan dipulangkan kepada 1MEHL dengan syarat IPO dilaksanakan dalam tempoh 42 bulan dari tarikh terbitan Nota USD pertama yang berakhir pada bulan November 2015. Pembayaran ini akan dibuat dalam tempoh 60 hari selepas IPO.
1MDB telah dinasihatkan oleh Suruhanjaya Sekuriti semasa persediaan untuk IPO, agar tidak meletakkan sebarang encumbrances ke atas saham syarikatnya. Sehubungan itu, Lembaga Pengarah 1MDB pada 22 Mei 2014 telah meluluskan penamatan opsyen yang diberi kepada Aabar Ltd. atas sebab ianya akan mengurangkan nilai IPO.
Pihak pengurusan 1MDB telah menandatangani Relating To Option Agreement (Settlement Agreement) bagi tujuan penamatan opsyen kepada Aabar Ltd. pada 22 Mei 2014. Amaun yang perlu dibayar oleh 1MEHL kepada Aabar Ltd. (dikenali sebagai assignment price) untuk menamatkan opsyen akan dinilai antaranya berdasarkan enterprise value pada tarikh penyenaraian dan expected growth dalam tempoh lapan tahun akan datang untuk Kumpulan 1MDB Energy. Assignment price perlu dibayar dalam dua peringkat, iaitu sejumlah USD300 juta selewatnya pada 30 September 2014 dan bakinya dalam tempoh 45 hari selepas penyenaraian IPO.
Pembayaran penamatan opsyen adalah tidak selaras dengan syarat dalam Settlement Agreement. Pihak pengurusan 1MDB telah membuat bayaran penamatan opsyen kepada Aabar Ltd. berjumlah USD1.968 bilion melibatkan tiga pembayaran pada bulan Mei 2014 (USD250 juta), September 2014 (USD725 juta) dan Disember 2014 (USD993 juta) sedangkan hanya USD300 juta yang perlu dibayar sebelum pelaksanaan IPO. Lembaga Pengarah 1MDB juga telah membuat teguran apabila dimaklumkan pada 20 Disember 2014 bahawa pembayaran penamatan opsyen telah dibuat menggunakan terimaan penebusan SPC yang telah dicagarkan kepada Deutsche Bank kerana beranggapan ianya hanya akan dibayar selepas IPO. Pihak pengurusan 1MDB tidak menjelaskan kepada Lembaga Pengarah 1MDB kegunaan dua pinjaman dari Deutsche Bank AG, Singapura berjumlah USD250 juta yang diambil pada bulan Mei 2014 dan USD975 juta pada bulan September 2014 bagi tujuan penamatan opsyen.
Dengan mengambil kira security deposit berjumlah USD1.367 bilion dan pembayaran penamatan opsyen kepada Aabar Ltd. berjumlah USD1.968 bilion, kos pembiayaan terbitan Nota USD yang sebenarnya ditanggung oleh 1MDB adalah lebih tinggi daripada kadar faedah 5.99% (terbitan pertama) dan 5.75% (terbitan kedua).
Sungguhpun demikian, 1MDB tetap bersetuju dengan terma pembiayaan yang memihak kepada IPIC dan Aabar kerana ingin melabur dalam sektor tenaga dan tiada pilihan sumber dana yang lain. Sekiranya pihak pengurusan memaklumkan kepada Lembaga Pengarah 1MDB berhubung impak IPO tidak dilaksanakan, risiko kewangan boleh diminimumkan.
Terdapat tiga pihak yang terlibat dengan transaksi terbitan dua Nota USD iaitu IPIC, Aabar Investments PJS (Aabar) dan Aabar Investments PJS Limited (Aabar Ltd.). Aabar adalah subsidiari IPIC yang ditubuhkan di Abu Dhabi manakala Aabar Ltd. telah ditubuhkan di British Virgin Island dengan alamat korporatnya di BVI. Bagaimanapun, penyata kewangan Kumpulan IPIC bagi tahun berakhir 31 Disember 2013 dan 31 Disember 2014 hanya menyenaraikan Aabar sahaja sebagai subsidiari IPIC. 1MDB telah mengemukakan salinan Sijil Incumbency bagi Aabar Ltd. tetapi JAN tidak dapat mengesahkan dengan pihak berkuasa berkaitan.
5.10. Bagi tahun kewangan 2013 hingga 2015, keuntungan selepas cukai berjumlah RM2.388 bilion yang diperoleh pada peringkat syarikat operasi, iaitu Kumpulan Powertek, Mastika Legenda dan Jimah tidak dapat menampung kos pinjaman dan pembiayaan berjumlah RM3.36 bilion yang ditanggung oleh subsidiari 1MDB yang mengambil pinjaman bagi membiayai perolehan tersebut.
5.11. Selepas membuat perolehan tiga syarikat IPP, 1MDB berusaha untuk menambahkan nilai syarikat melalui pelaburan dalam projek pembinaan loji jana kuasa baru. Tiga projek loji jana kuasa baru telah ditawarkan kepada Kumpulan 1MDB iaitu Projek 3B bagi pembinaan loji jana kuasa arang batu 2,000MW (Februari 2014), projek jana kuasa tenaga solar fotovoltaik 500MW (Mac 2014) dan tawaran bersyarat bagi Projek Alor Gajah – pembinaan loji jana kuasa gas 2,000MW (Ogos 2014). Bagaimanapun, Kumpulan 1MDB menghadapi masalah pembiayaan projek menyebabkan terpaksa menjual Projek 3B kepada TNB pada bulan Julai 2015 dengan harga RM46.98 juta, iaitu bersamaan 56.1% daripada keseluruhan perbelanjaan pembangunan berjumlah RM83.68 juta. Manakala projek Alor Gajah dan projek solar sedang dalam peringkat pelaksanaan dan pembangunan.
5.12. Cadangan awal penyenaraian 1MDB dalam IPO telah dibentangkan oleh Goldman Sachs mulai bulan Februari 2012 sebagai kaedah pembayaran balik pinjaman yang akan diambil untuk membiayai perolehan syarikat IPP. Syarikat mengenai pelaksanaan IPO termaktub dalam pelbagai dokumen perjanjian pinjaman antaranya pinjaman dengan Maybank Berhad, perjanjian Komitmen Tanjong, perjanjian opsyen kepada Aabar Ltd, dan Collaboration Agreement for Credit Enhancement dan Relating to Option Agreement (Settlement Agreement). Bagaimanapun, pihak pengurusan 1MDB telah menangguhkan rancangan IPO yang pada awalnya dijadualkan pada suku tahun pertama 2013. Penangguhan telah dibuat sebanyak dua kali, iaitu pada penghujung tahun 2013 dan pada tahun 2014 kerana ingin menunggu pengambilalihan sebuah lagi syarikat IPP dan keputusan tender bagi Projek 3B. Ini kerana kedua-duanya berpotensi meningkatkan nilai syarikat dan terimaan IPO. Permohonan IPO akhirnya berjaya dikemukakan kepada Suruhanjaya Sekuriti pada bulan November 2014 selepas 1MDB Energy Group Sdn. Bhd. dan Edra Energy Global Berhad ditubuhkan tetapi telah ditarik balik oleh 1MDB pada 27 Februari 2015.
5.13. Sehingga 31 Oktober 2015, Kumpulan 1MDB telah membelanjakan lebih daripada RM18.25 bilion untuk perolehan loji, tanah dan kos pinjaman/pembiayaan serta kos lain berkaitan pelaburan sektor tenaga termasuk kos pinjaman yang perlu ditanggung untuk security deposit dan kos transaksi terbitan Nota USD. Menerusi pelan rasionalisasi 1MDB, penjualan Kumpulan Edra kepada CGN Group pada 23 November 2015 adalah pada harga RM9.83 bilion berdasarkan tarikh penilaian pada 31 Mac 2015. Pengiraan pulangan bersih atas penjualan Kumpulan Edra sewajarnya mengambil kira harga penjualan Kumpulan Edra berbanding keseluruhan kos pelaburan Kumpulan 1MDB berkaitan sektor tenaga.
5.14. Dengan pelupusan aset di bawah Kumpulan Edra, Kumpulan 1MDB akan kehilangan sebahagian sumber pendapatannya dan akan menjejaskan keupayaan Kumpulan 1MDB untuk menampung bayaran komitmen pnjamannya, iaitu dua nota USD1.75 bilion berjumlah RM10.92 bilion dan tiga pinjaman berjumlah RM7.47 bilion yang tidak dilupuskan bersama-sama aset Kumpulan Edra. Ini adalah kerana obligasi bagi pinjaman ini masih ditanggung oleh Kumpulan 1MDB.
6. KEDUDUKAN KEWANGAN KUMPULAN 1MDB
6.1. Berdasarkan penyata kewangan bagi tahun berakhir 31 Mac 2014, kedudukan baki pinjaman dalam dan luar negara Kumpulan 1MDB tidak termasuk inherited loans adalah berjumlah RM33.71 bilion yang merangkumi lapan pinjaman/pembiayaan dalam negara dan tiga pembiayaan luar negara. Selain itu, 1MDB turut mengambil alih 11 inherited loans sedia ada berjumlah RM8.15 bilion yang perlu ditanggung daripada perolehan dua syarikat IPP pada tahun 2012 dan 2014. Ini menjadikan kedudukan baki pinjaman/pembiayaan sehingga tahun kewangan berakhir 31 Mac 2014 adalah RM41.86 bilion.
6.2. Dari segi kedudukan aset pula, sebanyak 363% peningkatan telah direkodkan iaitu daripada RM9.53 bilion pada tahun 2012 kepada RM44.14 bilion pada tahun 2013. Peningkatannya disebabkan oleh perolehan dua syarikat IPP, penilaian semula pelaburan hartanah, peningkatan baki bank dan wang tunai, deposit kepada Aabar Ltd. dan perkhidmatan konsesi serta pajakan belum terima. Mengikut penyata kewangan tahun 2014, kedudukan aset telah meningkat sebanyak 16% kepada RM51.41 bilion disebabkan perolehan sebuah lagi syarikat IPP dan pelaburan dalam pengurus dana portfolio.
6.3. Analisis aliran tunai bagi penyata kewangan tahun 2010 sehingga 2014 juga menunjukkan terbitan modal saham 1MDB secara tunai hanya berjumlah RM1 juta. Terbitan saham modal yang kecil ini menunjukkan ketidakstabilan syarikat kerana ia perlu meminjam bagi memperoleh 17 pinjaman/pembiayaan (tidak termasuk inherited loans) dengan nilai nominal RM42.88 bilion dan terimaan tunai berjumlah RM39.17 bilion. Bagaimanapun, aktiviti yang dibiayai melalui pinjaman/pembiayaan tersebut tidak menjana aliran tunai yang sepadan untuk membayar balik pinjaman tersebut.
6.4. Sehingga 31 Oktober 2015, baki prinsipal pinjaman/pembiayaan Kumpulan 1MDB berjumlah RM55 bilion berbanding aset berjumlah RM58.60 bilion. Sejumlah RM20.31 bilion daripada pinjaman/pembiayaan tersebut mendapat jaminan dan bantuan Kerajaan Persekutuan.
6.5. Berasaskan andaian pelan rasionalisasi dilaksanakan dan tiada pinjaman baru dibuat selepas bulan Oktober 2015, dianggarkan sejumlah RM42.26 bilion diperlukan bagi membayar kos prinsipal dan faedah pinjaman yang matang antara bulan November 2015 hingga bulan Mei 2039. 1MDB perlu menyediakan dana yang besar untuk melunaskan bayaran komitmennya yang tinggi pada tahun 2016 sejumlah RM4.88 bilion, pada tahun 2023 sejumlah RM14.74 bilion dan pada tahun 2039 sejumlah RM5.14 bilion. 1MDB juga memerlukan dana sekurang-kurangnya RM1.52 bilion setiap tahun dari bulan November 2015 hingga Mei 2024 untuk membayar balik pinjaman.
6.6. Bagi tempoh tahun 2016 hingga 2023, kos pinjaman yang perlu ditanggung oleh Kumpulan 1MDB berjumlah RM9.08 bilion. IMTN yang diterbitkan pada tahun 2009 dijangka matang pada tahun 2039 (30 tahun) dengan kadar bayaran pembiayaan berjumlah RM287.50 juta setahun. Komitmen Kumpulan 1MDB bagi IMTN dari bulan November 2015 hingga tahun 2039 berjumlah RM11.90 bilion yang merangkumi RM5 bilion prinsipal dan RM6.90 bilion kos pembiayaan.
6.7. Baki pinjaman Kumpulan 1MDB dijangka berjumlah RM28.21 bilion manakala kedudukan aset Kumpulan 1MDB berjumlah RM27.01 bilion. Sebahagian aset hartanah akan dibangunkan untuk menambah nilainya dan memberi pulangan di masa hadapan.
7. TADBIR URUS KORPORAT DAN KAWALAN DALAMAN
Amalan terbaik tadbir urus korporat dapat membantu syarikat mempertingkatkan kecekapan, ketelusan dan akauntabiliti dalam mencapai objektifnya serta membolehkan operasi syarikat diurus dengan teratur. Secara keseluruhannya, aspek berkaitan tadbir urus korporat dan kawalan dalaman Kumpulan 1MDB adalah kurang memuaskan. Sebahagian tindakan pengurusan 1MDB dan keputusan oleh Lembaga Pengarah 1MDB didapati dibuat secara tidak teratur. Antaranya seperti berikut:
a. Dalam tempoh tahun 2009 hingga 2015, beberapa keputusan pelaburan penting dengan nilai pelaburan yang tinggi dibuat melalui resolusi Lembaga Pengarah 1MDB tanpa perbincangan dan penilaian secara terperinci. Beberapa pertimbangan berhubung pelaburan dibuat dalam tempoh yang singkat dan berisiko tinggi. Bagaimanapun, Pengerusi Lembaga Pengarah 1MDB telah memaklumkan dalam Mesyuarat Jawatankuasa Kira-kira Wang Negera (PAC) pada 19 Januari 2016 bahawa perbincangan ada dibuat sebelum kelulusan diberi melalui resolusi.
b. Dalam beberapa keadaan, pengurusan 1MDB telah membentangkan maklumat yang tidak lengkap/tidak tepat kepada Lembaga Pengarah 1MDB sebelum sesuatu keputusan penting dibuat malah telah mengambil tindakan tanpa kelulusan Lembaga Pengarah 1MDB.
c. Terdapat juga keadaan di mana pengurusan 1MDB memberikan maklumat yang tidak tepat atau berbeza kepada pihak yang berkepentingan.
d. Pengurusan 1MDB mengambil tindakan yang bertentangan atau tanpa mengikut sepenuhnya keputusan Lembaga Pengarah/pemegang saham dalam beberapa peristiwa berkaitan pelaburan.
e. Pengurusan penyelenggaraan fail dan rekod 1MDB adalah tidak sistematik dan kurang memuaskan.
FROM SARAWAK REPORT: Money Paid by 1MDB in 2014 to bogus Aabar Limited BVI Company and Circulated Back to Singapore Account Meant to Con Parliament and the Auditors 14 Jul 2016 6:47 AM (9 years ago)
Special Purpose Con Job?
- 14 July 2016
Documents released by Sarawak Report led DAP Finance Spokesperson Tony Pua to state yesterday that he suspects that much of the money paid by 1MDB in 2014 to the bogus Aabar Limited BVI company was in fact circulated back through 1MDB’s Brazen Sky bank account in Singapore, in an attempt to con Parliament and the auditors that cash had been “redeemed” from the so-called Special Purpose Vehicle (SPV), which had allegedly invested US$2.3 billion in the Cayman Islands.
“it occurred to me that the 1MDB Financial Statements for the year ending 31 March 2014 were signed off by the auditors, Deloitte coincidentally on 4 November 2014, when 1MDB GIL also made a payment of US$222 million to Aabar (BVI).” says Pua.“At that point in time, there was increasing concern over 1MDB’s US$2.318 billion investment in an obscure investment fund based in Cayman Islands. The Board of Directors minutes have shown that the Management were repeatedly instructed to redeem the investment and repatriate the proceeds back to Malaysia throughout 2014. The company was under immense pressure because the authenticity of the investment was being publicly questioned…. The accounts were finally signed off by Deloitte when 1MDB was able to “show” the auditors that US$1.22 billion have been redeemed. The money was however, not repatriated to Malaysia.”
It is a shocking suggestion, because it would mean that two Swiss banks, BSI and UBS, would have been involved in helping shift these suspicious transactions through their Singapore branches – in some cases turning round hundreds of millions of dollars in one day, according to the figures.
This is because BSI managed the Brazen Sky account and UBS managed the bogus Aabar Limited account.
This is because BSI managed the Brazen Sky account and UBS managed the bogus Aabar Limited account.
Chapter 2 Item 8 of the AG Report confirms suspicious nature of SPV transactions
The Auditor General’s own analysis of this alleged ‘redeeming’ and ‘repatriation’ of the SPV cash (see full excerpt beneath) and the figures in his report lend weight to Pua’s suspicions, even though the AG complains he cannot reach a solid conclusion on the matter, because of the incomplete and limited information provided to him by the company.
“JAN [Audit Dept] was unable to verify 1MDB GIL’s subsequent payments or how the funds redeemed from the (SPC portfolio) funds were used because important documents such as bank statements and payment vouchers were not handed by 1MDB for JAN’s verification despite five requests being made between May and October 2015. Documents such as bank statements should be readily available to bank clients.” [8.12]
Such criminal obstruction of its own ought to demand severe action against managers, whom the Public Accounts Committee have called for the police to investigate.
What emerges from Chapter 2 item 8 on the Cayman SPV and supposed repatriation of the cash is yet again a litany of appalling bad practice at 1MDB, changing stories and missing money.
“The issues that were uncovered depict a company which had made unwise business decisions, took high risks and was not in line with 1MDB’s status as a Government-owned strategic development company to help develop the country.”[8.29] the Auditor General angrily concludes.
‘Round-Tripping’?
The figures from Chapter 2 item 8, make very interesting reading when compared to the bank transfer documents we publicised earlier in the week, which showed payments from 1MDB Energy and 1MDB Global to the Singapore UBS account of Aabar Limited during the relevant period in 2014.
The AG shows the transfers allegedly made from the Cayman Island SPV to 1MDB’s Brazen Sky account at BSI Bank Singapore from Sept-December 2014. These were claimed by 1MDB to be ‘cash’ allegedly ‘redeemed’ from selling off the various portfolios that had been managed in the Caymans through Bridge Partners.
First look at the money that the Auditor General records as having arrived into Brazen Sky’s account (bearing in mind he complains he was not given any of the bank statements of the company to prove the origin of the cash):
“Difficulties in obtaining important documents such as the Brazen Sky bank statements and 1MDB GIL statements resulted in JAN not being able to verify the transfer of funds or payment of Aabar’s termination of option and interest payments” [AG Rpt 8.26.g]
The money allegedly arriving in Brazen Sky from the SPV in the Caymans, according to figures provided to the Auditors Deloittes and later the Auditor General
Second, look at Sarawak Report’s table of money flows from 1MDB Energy and 1MDB Global into the UBS fake Aabar Limited account, published from bank transfer documents earlier this week.
Sarawak Report’s summary of the information provided by the 9 transfer documents submitted to the auditor
Finally, combine the two tables to see how virtually identical over-all sums were sent to the fake Aabar by 1MDB Energy and later 1MDB Global to those which arrived back just a few days later in the Brazen Sky Singapore account – and were then forwarded straight on/back to 1MDB Global.
On two occasions the same multi-million sums left 1MDB Global to fake Aabar and then arrived back there (via Brazen Sky) on the very same day:
US$255,500,000 on October 23rd and then US$222,222,000 on November 4th. Tony Pua would seem to have a point!
US$255,500,000 on October 23rd and then US$222,222,000 on November 4th. Tony Pua would seem to have a point!
Round-Tripping?
As Pua points out it was on November 4th, after the key figure of US$1.22 billion was flushed through Brazen Sky, that the auditors Deloittes finally agreed to sign off the belated accounts for that year on the basis that this money had been ‘redeemed’ from the Cayman Islands.
Except, the AG points out that instead of being repatriated to Malaysia to pay 1MDB’s pressing debts, as had been demanded again and again of management by the Board, this money was sent on to 1MDB Global’s BSI bank account in Lugano instead.
Or should we say it was SENT BACK to 1MDB Global’s BSI bank account in Lugano from where it had come in the first place?
The PetroSaudi black hole
In fact, all the evidence already forces the conclusion that there was never any money in the Caymans to be sent back in the first place, so this was nothing more than a desperate cover-up and an audit con-job that went to extraordinary lengths.
Indeed, once the money had been ‘redeemed’ to Lugano 1MDB management made sure to write it off straight away, claiming the money had been immediately spent on terminating options and paying off loans.
As everyone who has followed 1MDB knows, the original US$1.83 billion PetroSaudi investment (which was to go through no less than four different ‘investment strategies’ in as many years, to the Auditor General’s major disapproval) was actually stolen right from the start.
Jho Low’s Good Star Limited snaffled US$700 million on Day One, then a further US$330 million later in 2011. US$260 million was siphoned into the buy out of UBG in 2010 and the remainder went to PetroSaudi itself in return for its services in “acting as a front”.
The formerly two-bit company bought itself a drill ship and purchased a lucrative drilling concession in Venezuela on the proceeds of its “joint venture”.
The formerly two-bit company bought itself a drill ship and purchased a lucrative drilling concession in Venezuela on the proceeds of its “joint venture”.
So, when 1MDB claimed in 2012 that it had ‘cashed in’ its share of the PetroSaudi venture for a fancy profit of US$2.3 billion they were defying the laws of mathematics and common sense. Who would have paid such money for an empty shell?
Hence began the series of twisted and turning shadowy tales about the supposed Special Purpose Vehicles, conveniently hidden in the Caymans with off-shore bank accounts, allegedly ‘investing’ in ‘portfolios’ that it was claimed could be translated back into solid cash.
No one believed Shahrol Halmi at the time and they will believe him even less now that they have seen how the money circulated round 1MDB in late 2014, with the help of the friendly off-shore fake Aabar and compliant Swiss bankers in Singapore.
The Auditor General was outrageously denied the full information he was owed to explain exactly what happened here, but what all the evidence suggests is that 1MDB started pumping money it had borrowed for its Energy and Global subsidiaries through the fake Aabar, so that it could then be sent on to Brazen Sky posing as cashed in profits from the separate Cayman Island portfolios.
No wonder that during this very November 2014 the management had started drafting resolutions to explain why 1MDB Global might need to pay money to Aabar – the remaining US$1.5 billion from their 2013 Tun Razak Exchange loan was about the only significant remaining ready cash available in the group.
Hence the agreement to ‘extend the Aabar guarantee’ to this loan as well, in order to find an excuse to pay for the privilege. Aabar’s parent company IPIC have confirmed they knew nothing of the deal – the money went to the fake Aabar of course.
Hence the agreement to ‘extend the Aabar guarantee’ to this loan as well, in order to find an excuse to pay for the privilege. Aabar’s parent company IPIC have confirmed they knew nothing of the deal – the money went to the fake Aabar of course.
So, while the AG was not given the statements to prove this is what happened, his remarks could not have delivered a clearer official verdict of utter condemnation that nothing that was done was done correctly or honestly by 1MDB (see below). No wonder the Public Accounts Committee notified the police.
Remaining US$993 million
There was of course the alleged remainder of the SPV/Cayman money that the Board had called on 1MDB to return no less than 9 times for over a year:
The AG listed the occasions the Board had asked for the PetroSaudi/Cayman Islands money to be returned without success
The remaining money was US$993 and 1MDB had explained to the Board it would need to be used to pay off yet more options to the fake Aabar, for which purpose it was allegedly also paid to the Brazen Sky account.
Except, there turned out to be no money here either as the AG details in painful stages. First 1MDB had claimed they had sold the remaining SPV to fake Aabar again, because it was “as good as cash” although the market apparently was not keen on buying the SPV notes at that particular time.
Then the deal was reversed into an alleged cash sale, which turned out to be merely notes. The Auditor established that there was no cash in the BSI account, which was plainly why 1MDB had had to borrow real cash from Deutsche Bank to pay its mounting obligations, based on the supposed collateral which turned out to be notes not cash.
When the truth became known in April 2015, Deutsche Bank pulled its loan and 1MDB had to pull its favours with the corrupt Aabar officials, who dragged IPIC into a bail out.
The Auditor provides a useful further insight into the terms of that secretive ‘Term Sheet’ with IPIC, which finally expired on June 30th with 1MDB having failed to fulfil its obligations to the Abu Dhabi fund, sparking legal action and a demand of US$6.5 billion, now facing the Malaysian taxpayer.
The Auditor provides a useful further insight into the terms of that secretive ‘Term Sheet’ with IPIC, which finally expired on June 30th with 1MDB having failed to fulfil its obligations to the Abu Dhabi fund, sparking legal action and a demand of US$6.5 billion, now facing the Malaysian taxpayer.
Many had asked what assets 1MDB had promised Aabar in return for its loan, as referred to in that binding term sheet. The answer, found the auditor, was that no one at 1MDB or Aabar actually seemed to know – even a year later.
Because 1MDB had yet to demonstrate what were genuine assets and what were fake.
Because 1MDB had yet to demonstrate what were genuine assets and what were fake.
Read the Chapter 2 item 8 Translation
Expand text
| Board Meeting Number | Date of Meeting | Instruction |
| 3/2013 | 20/05/2013 | Prepare plan and schedule of for redeeming of funds in stages |
| 5/2013 | 19/08/2013 | Prepare plan and schedule of for redeeming of funds in stages |
| 6/2013 | 11/11/2013 | Liquidate investments in stages and return funds to Malaysia |
| 1/2014 | 27/01/2014 | Opportune moment to redeem investments in view of high value of USD |
| Special | 27/02/2014 | Management to take immediate action in redeeming funds and returning it to Malaysia |
| 3/2014 | 22/04/2014 | Redeem funds as soon as possible although there are no needs for cash in the near term. Funds could be used in local institutions. |
| 4/2014 | 10/06/2014 | Redeem at least 1/3 of the portfolio investments on Sept 30, 2014 or all on March 31, 2015. |
| 5/2014 | 21/07/2014 | Redeem 1/3 of the portfolio investment on Sept 30, 2014 and all March 31, 2015. Management is instructed to redeem funds on those dates |
| 6/2014 | 18/08/2014 | Redeem everything before or on Dec 31, 2014. |
| Clause | Condition |
| 20.2 (b) | Brazen Sky shall ensure that the Brazen Sky net worth will not at any time be less than USD1,500,000,000. |
| 22.2 (b) | With effect from the date which is six momths from the utilisation date, the borrower and Brazen Sky shall ensure that, at all times thereafter, the amount standing to the credit of Brazen Sky Account is at least equal to the Brazen Sky Required Balance.Note:Brazen Sky Account – Bank Account in Hong KongBrazen Sky Required Balance – a cash amount of USD600 mil up to a maximum of USD1,170 mil; USD500 mil plus aggregate of each Accordion Increase Amount x 1.2 [?] |
| Transactions | In (USD) | Out (USD) | |
| 11/09/2014 | Portfolio C2 | 110,000,000.02 | |
| 12/09/2014 | 1MDB GIL | 94,420,000.00 | |
| 07/10/2014 | Portfolio C2 | 146,518,719.52 | |
| Portfolio C1 | 228,481,280.48 | ||
| 1MDB GIL | 375,000,000.00 | ||
| 14/10/2014 | Portfolio B2 | 280,045,600.00 | |
| Portfolio C1 | 104,954,400.00 | ||
| 1MDB GIL | 340,000,000.00 | ||
| 23/10/2014 | Portfolio A2 | 27,099,840.00 | |
| Portfolio B1 | 198,247,200.00 | ||
| Portfolio B2 | 30,152,960.00 | ||
| 1MDB GIL | 255,500,000.00 | ||
| 31/10/2014 | Portfolio A1 | 93,292,800.00 | |
| 31/10/2014 | Dividends | 131,707,200.00* | |
| 04/11/2014 | 1MDB GIL | 222,000,000.00 | |
| 14/11/2014 | Portfolio A2 | 125,000,000.00 | |
| 1MDB GIL | 125,000,000.00 | ||
| 24/11/2014 | Portfolio A2 | 48,500,000.00 | |
| 26/11/2014 | 1MDB | 43,168,213.17* | |
| 08/12/2014 | 1MDB GIL | 5,500,000.00 | |
| TOTAL | 1,392,292,800.02 | 1,417,420,000 | |
| Statement | Source | |
| 12/01/2015 | Mr Arul updated the Board that the balance of USD939,874,085 had been redeemed and had been held as cash since Dec 31, 2014. | Special Board Meeting |
| 07/02/2015 | Mr Arul: “The cash is in our accounts and in US dollars. I can assure you (about that) … I have seen the statements”. | The Business Times, Singapore, Feb 7, 2015. |
| 23/02/2015 | Mr Arul informed the Board that, per the terms of the Deutsche Bank loan taken out in Sept 2014, there is a need for the USD975 million loan to be cash-collateralised at USD1.20 for every USD1.00 of the loan, by March 2, 2015. He therefore recommended, and that Board agreed, that the loan be repaid from the remaining USD939 million cash proceeds from the redemption of the investment portfolios held by Brazen Sky Limited, and the balance from the proposed Government of Malaysia loan. | Board meeting No 1/2015 |
| 03/03/2015 | Mr Arul updated the Board that further to the Board decision on Feb 23, 2015 he had instructed the CFO to utilise the proceeds of Brazen Sky Limited redemption to repay in full the USD975 million Deutsche Bank loan on March 2, 2015. However, the CFO informed him today that BSI apparently declined to apply the proceeds in that manner until they received a suitably worded indemnity from Deutsche Bank to release BSI from any liability in relation to application of the funds in that manner. | Special Board mee |
PART V: FROM SARAWAK REPORT- 'Options' And 'Security Deposits' Or Straight Thefts? 10 Jul 2016 7:22 AM (9 years ago)
'Options' And 'Security Deposits' Or Straight Thefts?
- 9 July 2016
FROM SARAWARK REPORT
Sarawak Report has now examined the Auditor General’s analysis of the so-called power purchase agreements in 2012, for which 1MDB raised US$3.5 billion through Goldman Sachs. His broad conclusions [see base of article] are contained in Section 5 of his Executive Summary and once again they represent a shocking indictment of the company and its advisors.
Sarawak Report has now examined the Auditor General’s analysis of the so-called power purchase agreements in 2012, for which 1MDB raised US$3.5 billion through Goldman Sachs. His broad conclusions [see base of article] are contained in Section 5 of his Executive Summary and once again they represent a shocking indictment of the company and its advisors.
If someone had planned from the start to set up an instrument to siphon borrowed public money into a private off-shore fund, they could not have done it more methodically than 1MDB management through their power purchase deals.
Since it has been revealed that the private fund in question, the bogus Aabar Investments PJS Limited, later channelled money directly into Red Granite Productions, owned by Najib Razak’s stepson, the reasons for making the AG’s findings secret are ever more apparent.
Section 5 of the Executive Summary details billions siphoned to fake Aabar from 1MDB’s power deals
In keeping with 1MDB’s earlier PetroSaudi deals, the AG highlights a pattern of management acting without the permission of the Board; then belatedly and only partially informing the Board of the actions taken or acting in total contravention of decisions by a Board, that seemed willing in the end to let matters pass.
Ex-CEO Shahrol Halmi – criminal investigations were recommended, but not so far launched
He complains once more that his audit team was presented with limited and incomplete documentation by the company, on deals involving billions.
Nevertheless it can again be seen that contracts were signed by management that were highly disadvantageous to the company, usually involving commitments to pay huge and unnecessary sums of money.
And, as with the earlier PetroSaudi ventures, those sums of money were diverted to a destination other than the ones officially stated.
In the case of PetroSaudi it was Jho Low’s Good Star, which had siphoned off the payments: in the power purchase deals it was the bogus Aabar Investments PJS Limited BVI that got the money.
Goldman Sachs
The Auditor General also refers to the pervasive presence of the bankers Goldman Sachs throughout all stages of these power purchase deals.
It was Goldman which provided the original consultancy that validated 1MDB’s decision to invest in the power plants, as well as Goldman which raised the bonds to finance the deal.
Goldman’s role under its top Asia banker Tim Leissner has raised further queries about the world’s most powerful bank
Also, from the very start it was Goldman which had presented a proposal (back in February 2012) suggesting that the whole enterprise could subsequently be paid off by an eventual public offering of the companies.
The bank’s representatives gave presentations to the Board to recommend their strategy, the Auditor records.
This means that Goldman Sachs was therefore integral to the series of decisions that were soon to tie the company up in knots, as vastly expensive commitments kicked into play on the basis of plainly flawed and unnecessary agreements, supported by the bank.
Included in the “weaknesses” of these agreements, identified by the AG, was the commitment to pay for IPIC to lend its credit rating to issue bonds, because the power purchase subsidiaries of 1MDB did not hold their own credit rating.
Given that the Ministry of Finance was placed as the ultimate guarantor anyway, a less disadvantageous way of raising money could surely have been identified by Goldman on behalf of its 1MDB clients?
Moreover, the reader is left wondering why the handsomely paid experts at the international bank had seemingly failed to notice during the drafting of these agreements that the recipient company for the planned payments (the bogus BVI Aabar Limited) was not actually listed within the IPIC Group of companies?
Decisions that led to disaster
Co-conspirator? Former IPIC CEO Khadem Al Qubaisi was the Director of the false Aabar subsidiary – however the BVI concern had no official connections with the Abu Dhabi fund
What the Auditor describes in his summary report is a series of agreements that resulted in 1MDB paying more than the entire sum of money that it had raised through its power purchase bond issues over to a bogus off-shore subsidiary of Aabar/IPIC in the BVI.
The two bond issues totalled US$3.5 billion, which had produced only a net receipt of USD3.197 billion, explained the Auditor, after deducting the extremely high transaction costs of USD302.5 million (8.6%) [5.9.h.]
Yet by the end of 2014 a whopping US$3.335 billion had been paid over to the fake Aabar Investments PJS Limited BVI, thanks to self-inflicted terms and conditions agreed by 1MDB.
So, 1MDB paid out ruinously more than it had borrowed, before even investing one ringgit in the intended power projects. No surprise, therefore, that far more borrowing was entailed in 1MDB’s power purchase history than was raised by these initial bond issues.
In point 5.8 of the Executive Summary, the AG explains that the RM18.79 billion initially borrowed to purchase RM12.07 worth of assets had by mid-2015 ballooned to a RM31.79 billion debt.
“Weaknesses”
The Auditor lists 1MDB’s key failings over these disastrous deals under the heading of “weaknesses.. regarding the issuance of the USD Notes by Goldman Sachs” in a table of 15 major points (a-o). The unfolding list presents an evolving horror story of mismanagement by any standards.
From the partial documentation available (all he was able to acquire from the company), the AG managed to deduce that these notes were primarily supported through an “Interguarantor Agreement” signed by IMDB and Abu Dhabi’s sovereign wealth fund IPIC for each of the US$1.75 billion bonds raised on May 18th and October 17th 2012.
But, he complains that this joint guarantee was of little real worth to the Malaysian side, because the terms specified that the ultimate responsible party was still the Malaysian Ministry of Finance, the owner of 1MDB.
“Although the guarantee was given by IPIC, 1MDB still bears all the risks in the event of a default.” [5.9.c]
Not much use then. So, what was the point of all this dealing one might ask?
The most obvious purpose appears to have been to tie 1MDB into a series of very expensive commitments, in order to justify the ludicrous later payments to the bogus subsidiary company Aabar Investments PJS Limited.
Options
The Auditor General writes that Goldman Sachs explained to him [5.9.d] that in return for this ultimately valueless IPIC guarantee, 1MDB committed to prepare ‘options’, which gave the bogus Aabar Limited the right to acquire a 49% equity in the power subsidiaries they were about to purchase (although the AG complains the documents were never produced for audit).
Note how the AG significantly points out at this juncture that those options were signed over specifically to the fake Aabar Limited, which was of course a bogus company unrelated to the IPIC/Aabar Group in whose name the options were being issued:
“According to Goldman Sachs, in return for IPIC’s guarantee on the two USD Notes, 1MEL and 1MELL [1MDB’s Power Purchase subsidiaries] would prepare options for Aabar Ltd to acquire a 49% equity in 1MESB and 1MELSB at a fixed price. However, the Options Agreement for the issuance of the two USD Notes was not presented for audit.”
Credit Enhancement
Quite separate from this options promise to the bogus entity and also from the original Guarantor Agreement was another form of document, which shortly after floated into the mix, according to the Auditor.
This was a so-called “Collaboration Agreement for Credit Enhancement” attached to each of the bonds, dated May 21, 2012 and Oct 19, 2012, which the Auditor says was agreed to by 1MDB management, but was significantly not signed by the main Abu Dhabi party to the Guarantor Agreement, IPIC [5.9.e].
This Collaboration Agreements provided for a cash payment/’Security Deposit’ to be made once again to the fake Aabar Limited, explains the Auditor (although he complains he never received proper copies).
The justification offered was that this was a consideration in return for allowing 1MDB to piggy back IPIC’s credit rating:
“Apart from the option to Aabar Ltd., 1MDB also agreed to provide a “credit enhancement” in the form of a cash payment (security deposit) to Aabar Ltd. The payment would have to be made within three days of the receipt of the USD Note, as stipulated in the Collaboration Agreement for Credit Enhancement dated May 21, 2012 and Oct 19, 2012.
This quid pro quo was necessary because 1MEL and 1MELL did not have the requisite credit rating to issue the USD Note and had used IPIC’s rating.However, the Board was never informed of this “credit enhancement” which was agreed to by the management, who were tasked with finalising all matters concerning the issuance of the USD Notes. Approval from the Board to allow 1MEHL, the parent company of 1MEL and 1MELL, to give a “credit enhancement” in the form of cash payment (security deposit) was not sought. [5.9.d]
So, not only was IPIC kept in the dark about this extra commitment, which had been tagged on after the main agreement, but so was the Board of 1MDB!
Within days of signing the main agreements, the Auditor has thus explained, 1MDB management had encumbered themselves with two lots of secret related commitments, which were shortly to evolve into vast financial demands on the company by a bogus third party, namely Aabar Investments PJS Limited.
Could this have been other than a calculated and deliberate self-entrapment on the part of management? You only have to judge what happened next, as the AG goes on to list the huge sums paid out for these ‘mistakes’ totalling more than the money raised in the first place.
Remember, the Auditor confirms that IPIC itself had not signed these extra agreements, which corroborates the letters sent by IPIC managers to complain they had no idea whatsoever that there were any “options” or “deposits” added to their ‘Inter-guarantor Agreement':
“IPIC’s guarantee resulted in 1MDB having to provide two things in return or as collateral – options and the security deposit. However, the only document signed by IPIC was the Interguarantor Agreement dated May 21, 2012, which does not contain any clause, terms or conditions stipulating such options and security deposits on the part of 1MDB or its subsidiaries issuing the USD Note.. “[5.9.g.]
The AG explains exactly how much was paid by 1MDB management to the bogus Aabar Limited for the covertly added “Security Deposit” – no less than US$1.367 billion, which was 39% of the entire capital raised:
“The net receipt of the two USD Notes amounted to USD3.197 billion after deducting the transaction cost of USD302.5 million (8.6%). From this amount, only USD1.83 billion (52.3%) could be used for investments (acquisition of TEHSB and MLSB), operations and working capital. This is because USD1.367 billion (39.1%) was paid to Aabar Ltd as security deposit. [5.9.h.]
How to make a ‘deposit’ into a permanent payment!
It would appear that the last thing 1MDB management were wanting was a situation where that ‘deposit’ might have to be returned by the bogus Aabar Limited. Otherwise, they would surely not have signed up to such disadvantageous terms as those next identified by the AG.
What they agreed was that if 1MDB failed to launch its projected IPO before a period of 42 months had expired (i.e. by November 2015) then the fakeAabar Limited would be permitted to keep the lot!
“The Security Deposit paid to Aabar Ltd would only be returnable to 1MEHL if the projected IPO had been completed within 42 months from the day of the first USD Note (i.e. End of Nov 2015). The repayment (by Aabar Ltd) was to be made within 60 days of the IPO.” [5.9.i]
As everyone knows the date for the IPO kept slipping back and eventually was dropped. According to the above agreement the bogus Aabar Limited BVI is therefore no longer obliged to repay that US$1.367 billion that it was given as security, in return for a guarantee from somewhere else!
Cashing in the Options
Meanwhile, the ‘reckless’ 1MDB management was also turning those separate options into cash for very same fake Aabar Limited.
Apparently, Malaysia’s Companies Commission had informed these executives that in order for the prized IPO to successfully go ahead it would be wise to terminate the third party interest in the company.
1MDB executives agreed with alacrity, says the AG and proceeded to come to a “Settlement Agreement”, whereby they would pay an “Assignment Price” of US$300 million up front to the bogus Aabar Limited, in order to release the options – with a commitment to pay a balance of a further amount only after the floatation had taken place.
That further amount would be calculated according to the worth of the offering, according to this agreement:
“The management had signed a document titled Relating to Option Agreement (Settlement Agreement) for the purpose of Aabar Ltd’s termination of the option on May 22, 2014. The amount which it required that 1MEHL pay to Aabar Ltd (known as the Assignment Price) for this termination of the option would be valued based on the enterprise value on the day of the listing and the expected growth of the 1MDB Energy Group over eight years. The Assignment Price was to be paid in two stages – USD300 million by Sept 30, 2014 and the balance [to be determined] within 45 days of the IPO.” [5.9.k.]
But, of course, this is not what the management actually did. Once again, in defiance of an outraged Board, they actually paid the bogus Aabar Limited a staggering US$1.968 billion UP FRONT to terminate those options, IN ADVANCE of any IPO:
“The termination of option payment was not in line with the conditions in the Settlement Agreement. What the management actually paid Aabar Ltd was USD1.968 billion in three payments – May 2014 (USD250 mil), Sept 2014 (USD725 mil) and Dec 2014 (993 mil) – although the only payment which had been agreed before the IPO was USD300 mil.” [5.9.l]
Perhaps, “If the management had told the Board about the impact of the IPO not taking place, the financial risks could have been minimised”, the AG notes wryly. But, of course, they did not!
Added to the payments for the ‘Security Deposit’ these terminations of ‘Options’ resulted in a total of US$3.335 billion being paid out to the fake Aabar subsidiary.
Aabar Investments PJS Limited BVI
So, finally to the key nub of this whole problem, which is the bogus off-shore Aabar Limited which was the recipient of all this cash. For months 1MDB has attempted to argue the toss about this fake third party, which was used to siphon off the cash.
However, if there is one over-riding reason why this report has been made a secret, then surely it would be the Auditor General’s own official confirmation that this was a third party company outside the of the power purchase deals.
From his detailed account it can be seen that this outsider was acting exactly in the same way that Good Star Limited had operated in siphoning the cash from the 1MDB PetroSaudi Joint Venture:
“There are three parties involved in the issuance of the two USD Note – IPIC, Aabar Investment PJS (Aabar) and Aabar Investments PJS Limited (Aabar Ltd). Aabar is a subsidiary of IPIC, which was incorporated in Abu Dhabi. Aabar Ltd is incorporated in the British Virgin Islands with a BVI corporate address. However, IPIC Group’s financial statements for the year ending Dec 31, 2013 and Dec 31, 2014 only lists Aabar as its subsidiary. 1MDB had presented the Incumbency Certificate for Aabar Ltd but JAN was unable to verify it with the relevant authorities.” [5.9.o]
Failed IPO
There had been a plan for burying this enormous heist, as the Auditor General goes on to consider. Goldman Sachs had proposed a glorious IPO (Initial Public Offering on the Malaysian Stock Market) for all these purchased power plants right from the very start.
The government company would buy them with this inflated loan and would then launch the whole offering onto an unsuspecting public, whose eager investment would pour in the necessary cash to ….. well, cover any shortfalls.
It didn’t work, because by the time that IPO was planning to be launched (early 2014) public trust had evaporated in 1MDB and the credibility of this debt-ridden company was at rock bottom.
The man in charge, Najib Razak, is blaming ‘critics’ and ‘journalists’ for this failure of crucial confidence….. we leave our readers to judge the factual evidence provided by Malaysia’s top auditor.
TRANSLATED EXCERPT OF SECTION 5 BELOW
SCROLL DOWN TO READ MORE
Executive Summary
- Investments in Energy Sector by 1MDB Group [pg xix – xxv]
5.1. In the early stages in 2009, 1MDB began investing in the energy sector by establishing joint ventures with China and Qatar in the aluminium smelting field in Sarawak by using energy from the Bakun Hydroelectric Project, equity investments in GDF Suez SA and the proposed construction of a regasification plant and gas-based power plant. However, this investment could not be implemented because of energy source constraints and the government policy of prohibiting anyone other than Petronas in supplying natural gas to independent power producers (IPP).
5.2. Between 2012 and 2014, the 1MDB Group had invested RM12.07 billion in three IPPs – Tanjong Energy Holdings Sdn Bhd (RM8.5 billion), Mastika Lagenda Sdn Bhd (RM2.342 billion) and Jimah Energy Ventures Sdn Bhd (Rm1.225 billion). The acquisition of equity was financed through three loans (RM7.47 billion), two USD Notes (RM10.69 billion) and advance/downpayment (RM625 million), all amounting to RM18.79 billion. The amount loaned was more than the value of the equity because the monies were also used for working capital and general purposes.
5.3. The Board had discussed and heard briefings from Goldman Sachs and 1MDB management on the acquisition of Tanjong Energy Holdings Sdn Bhd (TEHSB) and Jimah Energy Ventures Sdn Bhd (Jimah) before approving the acquisition. However, for the acquisition of Mastika Lagenda Sdn Bhd (MLSB), the acquisition proposal was not discussed or explained in detail during meetings because it was presented through written resolution. The terms and conditions and method of finance described in the written resolution was very similar to the first method of finance and acquisition that was approved five months earlier. The proposal for the acquisition of MLSB was on a written resolution dated Aug 10, 2012 and was incomplete. The report by an independent consultant to conduct due diligence for the MLSB acquisition was not presented during the Board meeting before an approval was given.
5.4. The enterprise value of the equity of all three IPP was performed by Goldman Sachs as the Financial Consultant through the use of the discounted cash flow (DCF) method. Enterprise value was determined based on the assumption the long-term cash receivable during the remainder of the concession. In the case of MLSB, the valuation also includes the five-year concession extension. […]
5.5.
5.6.
5.7.
5.8. The value of the loans which were employed in the early stages – between May 2012 and Jan 2014 – to acquire the IPPs amounted to RM18.79 billion. However, by June 2015, the loans relating to the investments in the IPPs had increased to RM31.79 billion of which RM13.34 billion had been repaid as of Oct 31, 2015. This increase was because the three initial loans, out of the five total taken for the acquisition, could not be repaid by the maturity date. The loans were short term loans due to mature between 10 to 48 months. According to the original plan by the management, the loans were to be repaid through the IPO [Initital Public Offering]. When the IPO was suspended, 1MDB did not have the funds to repay the loans. Because the Tanjong commitment could not be honoured, 1MDB was forced to refinance the loan and take out three further loans, of which a large portion of the amount received was used to repay the original loans raised to acquire the IPPs to avoid default.
5.9. From the (new loans), two USD Notes amounting to USD3.5 billion were issued to finance the energy sector investments, working capital and general matters. The issuance of the two USD1.75 billion note was approved without government guarantee. Among the weaknesses and observations regarding the issuance of the USD Notes by Goldman Sachs, involving 1MDB, IPIC and Aabar Ltd. are as follows:
a) IPIC and 1MDB had guaranteed the issuance of the two USD Notes – dated May 2012 and Oct 2012. However, the Deed of Guarantee from both companies were not given to JAN for inspection.
b) The guarantee by IPIC for the first USD Note on May 2012 was a “back to back guarantee” through an “Interguarantor Agreement” that was signed between 1MDB and IPIC. According to the agreement, 1MDB is required to obtain the support and sufficient funds from Ministry of Finance Inc (MKD) to repay IPIC should 1MDB fail to pay for all cost, expenditure and all obligations regarding this Note. Although the guarantee was given by IPIC, 1MDB still bears all the risks in the event of a default.
c) The Interguarantor Agreement was not listed as a document which was approved by the Board for the issuance of the second USD Note (Oct 2012), unlike the approval for the first USD Note (May 2012. JAN also was unable to verify if the Interguarantor Agreement was prepared for the issuance of the USD1.75 billion second Note on Oct 17, 2012.
d) According to Goldman Sachs, in return for IPIC’s guarantee on the two USD Notes, 1MEL and 1MELL would prepare options for Aabar Ltd to acquire a 49% equity in 1MESB and 1MELSB at a fixed price. However, the Options Agreement for the issuance of the two USD Notes was not presented for audit.
e) Apart from the option to Aabar Ltd., 1MDB also agreed to provide a “credit enhancement” in the form of cash payment (security deposit) to Aabar Ltd. The payment would have to be made within three days of the receipt of the USD Note, as stipulated in the Collaboration Agreement for Credit Enhancement dated May 21, 2012 and Oct 19, This quid pro quo was necessary because 1MEL and 1MELL did not have the requisite credit rating to issue the USD Note and had used IPIC’s rating. However, the Board was never informed of this “credit enhancement” which was agreed to by the management, who were tasked with finalising all matters concerning the issuance of the USD Notes. Approval from the Board to allow 1MEHL, the parent company of 1MEL and 1MELL, to give a “credit enhancement” in the form of cash payment (security deposit) was not sought.
f) The Collaboration Agreement for Credit Enhancement, dated May 21, 2012 and Oct 19, 2012, which was presented to JAN was incomplete.
g) IPIC’s guarantee resulted in 1MDB having to provide two things in return or as collateral – options and the security deposit. However, the only document signed by IPIC was the Interguarantor Agreement dated May 21, 2012, which does not contain any clause, terms or conditions stipulating such options and security deposits on the part of 1MDB or its subsidiaries issuing the USD Note, in contrast to the actions of the management.
h) The net receipt of the two USD Notes amounted to USD3.197 billion after deducting the transaction cost of USD302.5 million (8.6%). From this amount, only USD1.83 billion (52.3%) could be used for investments (acquisition of TEHSB and MLSB), oeprations and working capital. This is because USD1.367 billion (39.1%) was paid to Aabar Ltd as security deposit.
i) The Security Deposit paid to Aabar Ltd would only be returnable to 1MEHL if the projected IPO had been completed within 42 months from the day of the first USD Note (i.e. End of Nov 2015). The repayment (by Aabar Ltd) was to be made within 60 days of the IPO.
j) 1MDB was advised by the Companies Commission during the preparatory stage of the IPO to not place any encumbrances on the company’s shares. In compliance with this, the Board on May 22, 2014 had approved the termination of option to Aabar Ltd on grounds that it would reduce the value of the IPO.
k) The management had signed a document titled Relating to Option Agreement (Settlement Agreement) for the purpose of Aabar Ltd’s termination of the option on May 22, 2014. The amount which it required that 1MEHL pay to Aabar Ltd (known as the Assignment Price) for this termination of the option would be valued based on the enterprise value on the day of the listing and the expected growth of the 1MDB Energy Group over eight years. The Assignment Price was to be paid in two stages – USD300 million by Sept 30, 2014 and the balance [to be determined] within 45 days of the IPO.
l) The termination of option payment was not in line with the conditions in the Settlement Agreement. What the management actually paid Aabar Ltd was USD1.968 billion in three payments – May 2014 (USD250 mil), Sept 2014 (USD725 mil) and Dec 2014 (993 mil) – although the only payment which had been agreed before the IPO was USD300 mil. The Board also voiced criticisms when told on Dec 20, 2014 that the payments for the termination of the option was made using funds redeemed from the SPC, which was used as collateral to Deutsche Bank on grounds that it would be repaid during the IPO. The management did not explain to the Board that the two loans from Deutsche Bank AG, Singapore amounting to USD250 million (May 2014) and USD975 million (Sept 2014) were used for the termination of option.
m) When taking into consideration the security deposit (USD1.367 billion) and the payment for the Aabar Ltd termination of option (USD1.968 billion), the cost of financing the USD Note by 1MDB is much higher than the interest rate of 5.99% (first note) and 5.75% (second note).
n) Despite this, 1MDB had agreed with the terms which were favourable to IPIC and Aabar because of the desire to invest in the energy sector with no choice of other source of funding. If the management had told the Board about the impact of the IPO not taking place, the financial risks could have been minimised.
o) There are three parties involved in the issuance of the two USD Note – IPIC, Aabar Investment PJS (Aabar) and Aabar Investments PJS Limited (Aabar Ltd). Aabar is a subsidiary of IPIC, which was incorporated in Abu Dhabi. Aabar Ltd is incorporated in the British Virgin Islands with a BVI corporate address. However, IPIC Group’s financial statements for the year ending Dec 31, 2013 and Dec 31, 2014 only lists Aabar as its subsidiary. 1MDB had presented the Incumbency Certificate for Aabar Ltd but JAN was unable to verify it with the relevant authorities.
5.10. For the financial year 2013 until 2015, the profit after tax of RM2.38 billion for the operational companies – Powertek, Mastika Lagenda and Jimah – was not able to finance the borrowing cost amounting to RM3.36 billion incurred on 1MDB subsidiaries which borrowed to finance the acquisition of the companies.
5.11. After acquiring the three IPPs, 1MDB attempted to increase the value in the three companies through investments in a new power plant. The three projects offered to the 1MDB Group are: Projek 3B involving the construction of a 2,000MW coal power plant (Feb 2014), 500MW solar plant (Mar 2014) and the conditional offer for the 2,000MW gas power plant aka Alor Gajah Project (Aug 2014). However, 1MDB couldn’t finance the project and sold Projek 3B to TNB in July 2015 at RM46.98 million, or 56.1% of the RM83.68 million of the development cost. The Alor Gajah and solar projects are being implemented and developed.
5.12. The early proposal to list 1MDB through IPO was presented by Goldman Sachs beginning in Feb 2012 as a means of repaying the loans that will be taken to finance the acquisition of the IPPs. The condition to implement the IPO was included in several documents: Agreemnt with Maybank Bhd, Tanjong agreement document, options agreement to Aabar Ltd. and Collaboration Agreement for Credit Enhancement and Relating to Option Agreement (Settlement Agreement). However, the 1MDB management had postponed the IPO plan which was originally scheduled for the first quarter of 2013. There were two further postponements – End-2013 and in 2014 – in order to complete the acquisition of another IPP and the bid for Projek 3B. Both (IPP and Projek 3B) had the potential to increase the value of the company and its reception during the IPO. An application for the IPO was finally submitted to the Companies Commission on Nov 2014 after 1MDB Energy Group Sdn Bhd and Edra Energy Global Bhd was established. However, the application was withdrawn by 1MDB on Feb 27, 2015.
5.13. As of Oct 31 2015, 1MDB Group had spent more than RM18.25 billion for the acquisition of power plants, land, financing cost and other costs involving their energy sector investments, including the cost of borrowing for the security deposit and the transaction cost for the issuance of USD Notes. Based on the rationalisation plan, the sale of Edra Group to CGN Group on Nov 23, 2015 was priced at RM9.83 billion based on the valuation on Mar 31, 2015. The calculation for the net returns on the sale of Edra’s should take into account […] the entire cost of 1MDB Group’s investment in the energy sector.
5.14. By disposing of Edra Group, 1MDB Group will lose a portion of income and it will negatively affect 1MDB Group’s ability to repay its financial commitments – the two USD1.75 billion Notes and three loans amounting to RM7.47 billion – which were not disposed as part of Edra Group’s assets. This is because the obligation for the loan still falls on 1MDB Group.
PART IV: From SARAWAK REPORT- Damning Summary By The Auditor General On 1MDB's PetroSaudi Ventures 10 Jul 2016 4:15 AM (9 years ago)
Damning Summary By The Auditor General On 1MDB's PetroSaudi Ventures
- 8 July 2016
- 41
http://www.sarawakreport.org/2016/07/damning-summary-by-the-auditor-general-on-1mdbs-petrosaudi-ventures/
The Auditor General’s report into 1MDB is written in professional and dispassionate language. However, no one could fail to miss the stark criticism and disapproval contained within those paragraphs of factual analysis.
Preceding over 330 pages of tight scrutiny of the evidence made available to him (which he points out was not nearly as much as he would have wished or expected) the AG provides the usual ‘Executive Summary’ for such reports, focusing on the key information and points to be made.
From this Executive Summary we today translate his analysis of the fate of the original US$1.83 billion investment into the PetroSaudi Joint Venture and the next follow up investment into the 1MDB subsidiary SRC International, using money primarily borrowed from the public pension fund KWAP.
His task was made considerably more difficult he says, owing to the fact that 1MDB failed to provide much of the normal documentation an auditor would expect to perform their task:
“JAN [Auditor’s Department] faced limitations while performing this audit in view of the fact that some original or important documents were either submitted late or were not provided by 1MDB for the purpose of verifying transactions or as evidence for the audit.….The limitations resulted in a significant impact on the audit process in terms of verification of the actual financial position, operations and related transactions. Among important documents that were not submitted were the 1MDB Group’s Management Account for the year ending March 31, 2015 and bank statements from foreign lenders. [The audit team] was unable to access computers, notebooks and servers at 1MDB in order retrieve data and information for cross reference and analysis…”
Executive Summary
The AG sets off by laying out his task, required both by the Cabinet and the Public Accounts Committee, to examine the performance of 1MDB.
He notes the company was originally set up as a sovereign wealth fund, based on Terengganu’s oil reserves, but that the management under CEO Shahrol Halmi fell out with the shareholders in the Terengganu state government almost immediately, because Halmi went ahead with issuing a RM5 billion Islamic Medium Term loan (ITMN) through AmBank, without gaining the appropriate consent of Terengganu.
On July 31st, therefore, the fund was re-launched as 1MDB entirely under the purview of the Ministry of Finance. The AG notes [2.1.3.] that the Sultan and MB of Terangganu had complained of “malpractice” and “non-compliance” and had accused AmBank of “unauthorised issuance” of the bonds during its dispute with Halmi.
The AG also informs [2.1.4.] that the bond appeared to have been raised from its anonymous lenders at a very punishing rate – those lenders only paid RM87.92 for every RM100 in nominal value “to ensure the issuance of the IMTN was fully subscribed”, he said.
He adds that “the coupon rate is 5.75% per annum with effective rate of returns to be 6.68% annually”. To raise this RM5 billion will cost a total of RM11,90 billion to pay back at these punishing rates the Auditor has noted:
The IMTN issued in 2009 will mature in 2039 with coupon payments amounting to RM287.50 per annum. 1MDB Group’s commitment for the IMTN from November 2015 until 2039 amounts to RM11.90 billion – RM5 billion principle and RM6.90 billion in interest.[6.6 – Executive Summary]
These expensive terms for the loan are known to have been a source of controversy at the time and 1MDB has throughout its existence followed a pattern of such apparently unnecessarily expensive borrowing, which has added considerably to its financial problems and has never been properly explained by the Finance Minister.
PetroSaudi Venture
After outlining such an unpromising start Auditor General, Ambrin Buang, proceeds to outline the first venture in 1MDB’s stated “goal of pioneering investment opportunities abroad”, which was the joint venture with PetroSaudi, signed 28th September 2009.
The AG sums up his disapproval in the following terms:
“The decision to invest in this JV company was made in a period of eight days, without a detailed evaluation process and before issues/conditions raised by the 1MDB Board of Directors were resolved. There were four different companies registered with the name PetroSaudi but the investment proposal paper tabled to the 1MDB Board of Directors did not state this fact.” [2.2.1.]
The Auditor continues with a withering dismissal of the “valuation” of the company provided by a pal of PetroSaudi Director Patrick Mahony, namely the CitiGroup Executive Ed Morse, who was paid US$100,000 for a few hours work:
“The assets valuation report prepared by Edward L Morse was presented on Sept 29, 2009, which is the same date that he was confirmed in his appointment to perform the job by the 1MDB CEO, and the report was received one day after the JV was signed…. The valuation was conducted on assets owned by PetroSaudi International Ltd although the JV agreement clearly states that the company which owned all rights and interests on the agreed assets for the JV project was PetroSaudi International Cayman.” [2.2.2.]
Wow! They valued the wrong company – how come?
The AG goes straight on to complain that this agreement “includes clauses that insufficiently provide for the interest of the company [1MDB]”.
Among these disadvantageous provisions he names the US$700 million “loan”, which was tagged onto the subsidiary that PetroSaudi injected into the joint venture just a couple of days before the deal was signed, on the understanding that the joint venture would then pay it back!
“The payment of USD700 million to the other company was performed without the approval of the 1MDB Board of Directors” confirms the AG [2.2.3.]
Murabahah Notes
Just six months after all this song and dance the whole investment arrangement was altered, writes the AG (you can visualise his eyebrows raising).
1MDB jacked in the whole investment in return for US1.2 billion worth of “notes”, guaranteed by PetroSaudi itself.
This was followed by further ‘Murababaha’ (Islam-friendly) borrowing of US$500 million and then US$330 million – a total of US$1.83 billion [2.2.4.].
All change again!
This arrangement lasted barely two years the AG continues, before 1MDB altered its investment again.
This time it converted its borrowing back into shares directly in PetroSaudi, buying a 49% stake in its subsidiary PetroSaudi Oil Services Ltd (PSOSL):
“The swapping of Murabahah Notes for equity in PSOSL was performed without detailed study to determine (PSOSL’s) liability, ability to generate funds and its past financial performance”, notes the AG with a dry sigh [2.2.5.],
This was despite the fact that knowledge of PSOSL’s operations in Venezuelan waters was subjected to restrictions/sanctions by the US and that the company’s drilling contracts were expiring.
Naturally, the plainly unwise investment was done in advance of any kind of Board approval:
“Moreover, the approval by the Board of Directors and 1MDB shareholders to swap the Murabahah Notes for equity in PSOSL was signed on June 20, 2012, but the 1MDB CEO had signed five documents regarding the deal on June 1, 2012. This shows that the 1MDB CEO took action even before seeking the board’s approval” [2.2.6.]
Ooops! change again!
It took only 45 days for 1MDB to change its mind about this investment, continues the AG. He details how the fund cashed out its PSOSL shares Sept 12 2012 in a deal with the little known fund managers Bridge Partners.
Bridge Partners were supposed to pay a handsome price of US$2.3 billion for these shares, according to the ‘sale purchase agreement’, which was advertised by 1MDB as a successful profit on its original US$1.83 billion investment into this series of PetroSaudi related enterprises.
But, in the end the expectation of much needed cash (1MDB’s other investments were causing major cash flow issues by this stage) was replaced by ‘notes’.
An “Investment Management Agreement” made on the same day with Bridge Partners allowed for its ‘payment’ to 1MDB to be converted into an investment into its own Segregated Portfolio Company (SPC) in the Cayman Islands. This, says the AG, “was funded through promissory notes in lieu of cash”.
Given that the advertised material relating to this Cayman Island Fund warns investors that they could easily lose all of their investment, these “promissory notes” would appear to be a very poor bargain for the hard currency profit boasted of in 1MDB press releases and Ministry of Finance statements.
The AG adds with a note of utter exasperation:
“This Investment was made through Bridge Global Absolute Return Fund SPC (Bridge Global SPC), which was a month-old company, without a fund managing license and without experience in managing large sum of funds” [2.2.8.].
The words criminally irresponsible come to mind, although they would not be uttered by any auditor in such a context, and indeed the chaps in charge of the fund’s ultimate controllers Avestra, were soon facing criminal charges over the management of this fund in Australia.
Credibility Crisis
By this stage of his synopsis the Auditor General records that 1MDB’s own Board had concluded that they had a massive PR problem on their hands, owing to such a lamentable investment history at the fund.
The Board wanted the cash brought back to Malaysia says the AG, but the management (as usual) refused to play ball:
“[2.2.8.] The Board of Directors on May 20, 2013 agreed that the investment be redeemed in stages in order to improve public perception on the credibility of 1MDB’s investments. The Board of Directors had issued nine instructions between May 2013 and August 2014 to the management to prepare a plan, schedule and redemption of portfolio funds from the SPC either through stages or as a whole. However, no immediate action was taken by the 1MDB management.
Eventually, on 20th December 2014, Buang confirms the Board were told at a meeting that USD1.392 billion had been redeemed from this Cayman SPC. The remainder, they were informed (US$993 million) would be used to ‘terminate options with Aabar’.
But, again, says the AG, the management did not do what they had agreed to with the money:
“In reality, all of those remaining funds from the SPC portfolio were used as collateral for Beutsche Bank for a loan amounting to USD975 million, for which an approval from the Board of Directors was not obtained. Apart from this, the USD1.392 billion which had been transferred to the account of Brazen Sky Ltd was forwarded to 1MDB Global Investment Limited (1MDB GIL). This act contravened the instructions of the Board of Directors who demanded that the SPC portfolio funds be brought back to Malaysia.” [2.2.9]
It really is as breath-taking stuff as you are likely to read from a crusty Auditor’s Report into a government owned company. Najib for one had plainly expected a bland whitewash, along the lines of 1MDB’s own purchased audits.
As we all know by now, the AG has also pointed out in related papers that no proof was ever produced by the rogue management of the company that any hard cash in reality ever returned from the Caymans. There were simply no bank accounts or documents produced by 1MDB to substantiate its various claims.
To the contrary, it is already known that most of the money (US$1.03 billion) “invested” in PetroSaudi disappeared on Day 1 into Jho Low’s outfit, Good Star Limited. and a further US$260 million went into the buy out of UBG, so how could US$2.3 billion have been realised. And don’t forget the interest payments!
SRC International
The Auditor General had the same experience of negligent behaviour when he examined the controversial SRC International, he said, a company that was rapidly pulled out of 1MDB and place under the Ministry of Finance, away from the scope of this enquiry:
For example:
“The SRCI board approved USD45.50 million for investment in the coal industry in Mongolia without providing a feasibility study on the matter ..” [3.3]
In conclusion, writes the exasperated AG [2.2.12] “for the period of four years since 1MDB was established… this investment instrument was changed four times.” He sums up the present situation:
“6.3 An analysis of the cash flow on the financial statements from year 2010 to 2014 have shown that 1MDB’s paid-up capital was only RM1 million. This small amount showed that the company was not (financially) stable because it required to borrow for its activities. Throughout financial year 2010 until 2014, 1MDB obtained 17 loans (not inclusive of inherited loans) at a nominal value of RM42.88 billion but received cash amounting to RM39.17 billion.However, (the company’s) activities which were funded by loans did not generate the necessary cash flow to repay the loans……
“1MDB needs to prepare large sums to fulfil its obligations – RM4.88 billion in 2016, RM14.74 in 2023 and RM5.14 billion in 2039. 1MDB also requires to have at least RM1.52 billion annually from Nov 2015 to May 2024 to repay its loans.”
For this outrageous situation the AG blames the management, whose controls were “less than satisfactory” and which operated “without due process”.
“Several important investment decisions involving large sums were made .. without any discussion and proper detailed valuation. Several investments were decided on short notice and were high risk.” he says.
Moreover:
“In several situations, the 1MDB management had presented incomplete or inaccurate information to the Board of Directors before an important decision was to be made. In fact, the management sometimes took action without approval from the Board”
In short the Auditor General’s report confirms, after a professional and objective examination, all the criticisms that have been made of 1MDB’s financial mayhem and worse.
The decision to make it an official secret can therefore only be described as a disgraceful cover-up to protect the criminal negligence and misappropriations of the parties concerned.
See excerpts from the EXECUTIVE SUMMARY (click here)
PART III: FROM SARAWAK REPORT - EXECUTIVE SUMMARY by the Auditor General on 1MDB 10 Jul 2016 2:54 AM (9 years ago)
ATTORNEY GENERAL REPORT EXECUTIVE SUMMARY
Executive Summary (extract)
1. Introduction
1.1 Background
Cabinet had decided on March 4, 2015 that the National Audit Department (JAN) were to verify the accounts of 1Malaysia Development Bhd (1MDB) and its relevant report ought to be handed to the Public Accounts Committee (PAC). Prior to this, on Feb 27, 2015 PAC had also made a request to the JAN to perform an audit on 1MDB.With regard to this, JAN initiated an audit on March 10, 2015. The auditthat took place between March 10 and June 15, 2015 was an interim auditand the relevant report was submitted to the PAC on July 9 and July 10, 2015. This interim report discussed the analysis of the financial statements and investments in a joint-venture with PetroSaudi; the issuance of Murabahah Notes and the Segregated Portfolio Company (SPC).
Following this, the audit was continued until Jan 31, 2016 and a final report was prepared, containing the analysis of the financial statements and financial position of the 1MDB Group based on financial statements ending March 31, 2014 and financial information received up until Oct 31, 2015.
Apart from this, an analysis was also performed on the performance of the equity investments, Murabahah notes, financial portfolio / Portfolio of Funds / Fund Portfolio, SRC Group, real estate sector and energy sector.
This final report includes issues covered in the interim report and discussions at the PAC level.
1.2 Audit Objectives
This audit was performed based on the mandate from the Cabinet and PAC to verify the financial statements of the 1MDB Group, which have been audited, and to evaluate the financial performance and activities of
the 1MDB Group in order to determine if the objectives of establishing the company had been achieved.
1.3 Scope and Methodology
JAN’s had performed checks on the 1MDB Group’s audited financial statements for the financial period ending March 31, 2010 until March 31, 2014. The financial statements for the year ending March 31, 2015 was not prepared by 1MDB for this audit. However, JAN was able to perform an audit based on documents obtained from 1MDB including discussions with (1MDB’s) management. JAN faced limitations while performing this audit in view of the fact that some original or important documents were either
submitted late or were not provided by 1MDB for the purpose of verifying transactions or as evidence for the audit.
1.4 Limitations
The limitations resulted in a significant impact on the audit process in terms of verification of the actual financial position, operations and related transactions.
Among important documents that were not submitted were the 1MDB Group’s Management Account for the year ending March 31, 2015 and bank statements from foreign lenders. [The audit team] was
unable to access computers, notebooks and servers at 1MDB in order retrieve data and information for cross reference and analysis.
1.5 Formation of 1MDB
Finance Ministry Incorporated (MKD) has taken over Terengganu Investment Authority Berhad (TIA) which was established by Menteri BesarmTerengganu Incorporated (MBI Terengganu) on Feb 27, 2009. The original objective of establishing TIA was to create a sovereign wealth fund with a capital of RM11 billion. The funds were to be obtained from oil royalty owed (to Terengganu) amounting to RM6 billion and bond issuance from the local and foreign financial markets with a proposal for the Federal Government to provide a guarantee of RM5 billion based on Terengganu’s future oil revenue. The Federal Government decided to take over TIA and this process was completed on July 31, 2009 and the company was
renamed 1MDB on Sept 25, 2009. After the takeover, 1MDB was no longer a sovereign wealth fund but a strategic development company whollyowned by MKD with an approved capital of RM1 billion and paid-up capital of RM1,000,002. Subsequently, 1MDB was involved in the following investments:
1.JV with PetroSaudi Holdings (Caymans) Ltd;
2.Investment in Segregated Portfolio Company (SPC);
3.Investment in SRC Group;
4.Investment in real estate sector; and,
5.Investment in energy sector.
1.6 Management Structure and Organisation in 1MDB
1.6.1. The management structure was divided into three levels - Advisory Board, Board of Directors and Senior Management. The Advisory Board was tasked with providing guidance and advice on investments and business.
1.6.2. In 2009 and 2010, 1MDB had only one subsidiary and was involved in equity and real estate investments. 1MDB Group’s structure expanded following its involvement in the energy sector through the acquisition of three independent power producers with local and foreign networks, following which the amount of companies in the 1MDB Group had
increased to 96 in 2014.
2. 1MDB Group’s Investments
2.1. Islamic Medium Term Notes
2.1.1. TIA had proposed to issue Islamic Medium Term Notes (IMTN) amounting to RM5 billion as initial funding. On April 1, 2009, the Federal Government agreed to act as guarantor for TIA to raise the RM5 billion from the domestic and foreign financial markets through IMTN for investment purposes in accordance to the Loans Guarantee (Bodies Corporate) Act 1965. This guarantee encompasses the repayment of the
principle and interest for a period of 30 years. This was followed by an approval from the TIA’s Board of Directors on April 15, 2009. The agreement was signed on May 15, 2009 between TIA (issuer) and
AmInvestment Bank Bhd (AmBank) as the lead arranger, lead manager and facility agent. On the same day, the Federal Government provided a guarantee for the issuance of the IMTN.
2.1.2. However, the signing of the agreement and facilitation of the government guarantee was not in accordance to the terms and plans by MBI Terengganu and this had dissatisfied MBI Terengganu as the TIA
shareholder. The TIA Board of Directors through a resolution dated May 22, 2009 ordered the suspension of the issuance of the IMTN until a corporate management structure and best practices were realised.
The TIA chief executive officer was instructed to take immediate action to terminate and suspend all actions involving the issuance of the IMTN. However, he had already signed the Subscriber Agreement with AmBank on May 25, 2009 and the Aqad Agreement, Murabahah Purchase Agreement and Murabahah Sales Agreement on May 26, 2009.
2.1.3. The TIA CEO’s act of pursuing the issuance of the IMTN resulted in him being removed as a company director through a shareholders resolution dated May 27, 2009. On the same date, a TIA Board of Directors resolution signed by Datuk Ismee and Shahrol Azral [Halmi] to proceed with the issuance of the IMTN and reappoint Shahrol Azral as a TIA director. The issuance of the IMTN [...] had resulted in MBI Terengganu issuing a written warning to AmBank on May 29, 2009. The bank was accused of malpractice and non-compliance by issuing the IMTN. Moreover, Cabinet was informed on June 3, 2009 that the DYMM Sultan of Terengganu had sought a report on the “Unauthorised Issuance of IMTN by TIA”.
2.1.4. On May 29, 2009, TIA received the net amount from the IMTN totalling RM4.385 billion from the full value of RM5 billion, which is at a price of RM87.92 for every RM100 in nominal value with a discount rate of 12.08% in view of AmBank as the lead arranger to ensure the issuance of the IMTN was fully subscribed. The coupon rate is 5.75% per annum with effective rate of returns to be 6.68% annually.
2.1.5. During the 1MDB Board meeting on Oct 10, 2009, the chief executive officer informed that the IMTN was issued based on the urgings of the TIA special advisor for the purpose of developing Pulau Bidong in cooperation with Mubadala (a company). Apart from this, in June 2015, the former 1MDB CEO said the issuance of the IMTN had proceeded because the agreement signed on May 15, 2009 was a “bought deal” in which AmBank as the lead arranger and primary subscriber had obtained secondary market subscribers for the issuance of the bond.
2.2 Equity Investments, Murabahah Note and Fund Portfolio
2.2.1. 1MDB Group’s joint-venture with foreign companies began in 2009 with the goal of pioneering investment opportunities abroad. The first JV project was finalised between 1MDB, PetroSaudi Holdings (Cayman) Ltd. and 1MDB PetroSaudi Ltd. (joint-venture compay) on Sept 28, 2009.1MDB held 40% equity with a contribution of USD1 billion while PetroSaudi Holdings (Cayman) Ltd. held 60% equity in form of assets worth approximately USD1.5 billion. The decision to invest in this JV company was made in a period of eight days, without a detailed evaluation process and before issues/conditions raised by the 1MDB Board of Directors were resolved. There were four different companies registered with the name
PetroSaudi but the investment proposal paper tabled to the 1MDB Board of Directors did not state this fact.
2.2.2. The assets valuation report prepared by Edward L Morse was presented on Sept 29, 2009, which is the same date that he was confirmed in his appointment to perform the job by the 1MDB CEO, and the report was received one day after the JV was signed. The valuation report took into consideration the exploration rights and oil production in Turkmenistan and Argentina. The valuation was conducted on assets owned by PetroSaudi International Ltd although the JV agreement clearly states that the company which owned all rights and interests on the agreed assets for the JV project was PetroSaudi International Cayman.
2.2.3. In addition, the JV agreement includes clauses which insufficiently provides for the interest of the company [1MDB]. Among others, the loan received by 1MDB PetroSaudi Ltd. amounting to USD700 million from its parent company, PetroSaudi Holdings ( Cayman) Ltd. on Sept 25, 2009 must be paid back in full on or before Sept 30, 2009. On Sept 30, 2009, a total of USD1 billion (RM3.487 billion) was transferred by 1MDB to two separate accounts - USD300 million to the account of the JV company and
USD700 million to the account of another company for the purpose of repaying the loan received by the JV company. The payment of USD700 million to the other company was performed without the approval of the
1MDB Board of Directors.
2.2.4. Six months after the JV was signed, 1MDB disposed all of its 40% equity stake amounting to USD1 billion in the JV company in return received USD1.20 billion through the subscription of Murabahah Notes.
The Murabahah Notes provide returns of 8.67% annually and mature on March 31, 2021 and were supported by a corporate guarantee by PetroSaudi International Ltd. On Sept 14, 2010, an additional subscription of Murabahah Notes amounting to USD500 million (RM1.57 billion) was made and a total of USD330 million (RM1.02 billion) was paid between May 20 and Oct 25, 2011. A portion of the funds to finance the additional subscription of Murabahah ntoes were made through loans from financial institutions.
2.2.5. After investing 27 months in the Murabahah Notes, on June 1, 2012, 1MDB redeemed the Murabahah Note, including profits yet to be received, amounting to USD2.22 billion (RM6.8 billion) through an asset swap arrangement in which 1MDB’s subsidiary, 1MDB International Holdings Ltd
(1MDB-IHL), acquired a 49% equity stake in PetroSaudi Oil Services Ltd (PSOSL), a PetroSaudi International Ltd subsidiary. 1MDB-IHL also ratified a “call and put option” with PetroSaudi International
Ltd to acquire the remaining 51% stake in PSOSL at an option price of USD10. The swapping of Murabahah Notes for equity in PSOSL was performed without detailed study to determine (PSOSL’s) liability, ability to generate funds and its past financial performance. Although knowledge of POSL’s operations in Venezuelan waters was subjected to restrictions/sanctions by the US and drilling contracts were expiring, the decision to invest in PSOSL was continued. Moreover, the approval by the Board of Directors and 1MDB shareholders to swap the Murabahah Notes for equity in PSOSL was signed on June 20, 2012, but the 1MDB CEO had signed five documents regarding the deal on June 1, 2012. This shows that the 1MDB CEO took action even before seeking the board’s approval.
2.2.6. 45 days after 1MDB swapped the Murabahah Note for an equity stake in PSOSL, the 1MDB CEO had sought to dispose of the equity stake in PSOSL because Venezuela was facing sanctions by the US. In relation to this, the 1MDB Board of Directors approved the disposal of 1MDB-IHL’s 49% equity stake in PSOSL to Bridge Partners International Investment Ltd (Bridge Partners) for a consideration of not less than USD2.22 billion hich to be managed by a licensed fund manager. This decision was made through a resolution by the Board of Directors and 1MDB shareholders.
2.2.7. On Sept 12, 2012 the sale and purchase agreement to dispose of 1MDB-IHL’s entire stake (in PSOSL) was ratified between 1MDB and Bridge Partners. In return, Bridge Partners issued six promissory notes, without interest, valued at USD2.318 billion, which must be paid in one month. On the same date, Brazen Sky Ltd, ratified an “Investment Management Agreement” with Bridge Global Absolute Return Fund SPC (Bridge Global SPC) and Bridge Partners Investment Management (Cayman) Ltd. to invest the USD2.318 billion. This investment was funded through promissory notes in lieu of cash and was later invested in various investment portfolios through a Segregated Portfolio Company (SPC) in the Cayman Islands. This Investment was made through Bridge Global Absolute Return Fund SPC (Bridge Global SPC), which was a month-old company, without a fund managing license and without experience in managing large sum of funds.
2.2.8. The Board of Directors on May 20, 2013 agreed that the investment be redeemed in stages in order to improve public perception on the credibility of 1MDB’s investments. The Board of Directors had issued nine instructions between May 2013 and August 2014 to the management to prepare a plan, schedule and redemption of portfolio funds from the SPC either through stages or as a whole. However, no immediate action was taken by the 1MDB management.
2.2.9. On Dec 20, 2014 the Board of Directors was informed that the latest funds to have been redeemed from the SPC portfolio stood at USD1.392 billion and the balance of USD939.87 million would be redeemed at the end of December 2014. From this amount, USD993 million was paid to Aabar to terminate options. In reality, all of those remaining funds from the SPC portfolio were used as collateral for Beutsche Bank for a loan amounting to USD975 million, for which an approval from the Board of Directors was not obtained. Apart from this, the USD1.392 billion which had been transferred to the account of Brazen Sky Ltd was forwarded to 1MDB Global Investment Limited (1MDB GIL). This act contravened the instructions of the Board of Directors who demanded that the SPC portfolio funds be brought back to Malaysia.
2.2.10. An Asset Sale Agreement was signed on Jan 2, 2015 between Brazen Sky Ltd and Aabar Investments PJS Limited (Aabar Ltd) to ensure the balance of the SPC portfolio funds amounting to USD939.87 could be redeemed before March 31, 2015, as sought by the Board of Directors. However, the agreement was signed without the knowledge of the Board of Directors and 1MDB shareholders. In relations to this, the Board of Directors agreed on March 25, 2015 to terminate the Asset Sale Agreement and replaced it with a Share Sale Agreement in which the all equity in Brazen Sky Ltd was to be sold to Aabar Ltd at a consideration price of USD1.20 billion. However, the Share Sale Agreement was never finalised.
2.2.11. On May 28, 2015, a Term Sheet for Settlement Arrangements(Binding Term Sheet) was signed between 1MDB Group, Finance Ministry Incorporated (MKD), International Petroleum Investment Company (IPIC) and Aabar Investments PJS Groups (Aabar). Among the important terms in the Binding Term Sheet is that IPIC will pay 1MDB USD1 billion before or on June 4, 2015 and takeover the payment obligations for the interest and principle for two USD Notes which respectively amounts to USD1.75 billion. As for 1MDB, during a meeting on June 14, 2015, the Board of Directors was informed that among assets which would be transferred to IPIC/Aabar was the balance from the SPC portfolio amounting to USD939.87.
2.2.12. In conclusion, for the period of four years since 1MDB wasestablished, the initial investment by 1MDB through funds from the issuance of IMTN amounted to RM5 billion and this investment instrument
was changed four times. This started with the investment of USD1 billion (RM3.49 billion) in 2009 in a JV with a subsidiary of PetroSaudi International Ltd, followed by the investment of Murabahah Note
amounting to USD830 million (RM2.59 billion) in 2011 and 2012 until it was transformed into investment in the SPC Portfolio amounting to USD2.318 billion (RM7.18 billion) in Cayman Islands in September 2012. The repatriation of a portion of the investment in the SPC Portfolio in 2014 was used to fund various company commitments and investments. In the end, the investment was left with a balance of USD939.87 in the form of investment units in the SPC Portfolio on March 31, 2015.
3. Investments in SRC Group
3.1. An early proposal for the establishment of a Strategic Resource Company was presented by 1MDB to the prime minister on Aug 24, 2010. The Economic Planning Unit (EPU) had studied the proposal and
approved the establishment of the company after several conditions were fulfilled. Based on the Memorandum and Articles of Association (M&A), SRC’s objective was to identify and invest in projects involving drilling, extraction, processing and trade in conventional energy, renewable natural
resources and minerals, including the acquisition of company shares, stocks and securities. According to SRC’s business plan for 2011 to 2015, SRC will supply coal for the long term needs of the country by the fourth year of operation (2014).
3.2. As a subsidiary of 1MDB, SRC received funds from a government development grant amounting to RM15 million from the RM20 million approved by the EPU and a loan of RM2 billion from Retirement Fund
Incorporated (KWAP). The RM2 billion was received on Aug 29, 2011 which was meant to be repaid over 10 years. The loan was guaranteed by the Government which includes principle and interest, amounting to RM2.902 billion.
3.3. A JV project between SRC’s subsidiary SRC International (Malaysia) Ltd (SRCI) and Aabar Investments PJS (Aabar) on Nov 3, 2011 resulted in the establishment of Aabar-SRC Strategic Resources Limited (ASRC). ASRC’s initial capital amounts to USD120 million, with each side providing USD60 million. The SRCI board had approved USD45.50 million for investment in the coal industry in Mongolia without providing a feasibility study on the matter which will be undertaken by ASRC through Gobi Coal
& Energy Limited (GCE). SRC also invested in PT ABM Investama TBK,Indonesia amounting to USD120 million (RM366.68 million) through published share prices listed on the Indonesian Stock Exchange. During a meeting on Feb 14, 2012, the SRC CEO had reported that the estimated gains on the investment was USD4 million.
3.4. On Feb 15, 2012 1MDB’s ownership of SRC was relinquished to Finance MInistry Incorporated (MKD) by means of share transfer through dividend-in-specie interim payments. The transfer of SRC shares also reduced 1MDB Group’s operational loss from RM25 million to RM16.2 million, reduced the 1MDB’s gearing ratio from 12 times to 9.5 times and reduced the government’s guarantee by RM2.902 million to 1MDB Group.
4. Real Estate Investments
5. Energy Sector Investments
6. Financial Position of 1MDB Group
6.1 Based on the financial statements for the year ending March 31, 2014,
1MDB Group’s outstanding debt, both foreign and domestic, stood at RM33.71 billion. This does not include inherited loans. Eight of the loans involve domestic lenders and three from foreign lenders. Apart from this, 1MDB had 11 inherited loans, from two independent power producers in 2012 and 2014, involving RM8.15 billion which must be serviced. Thus 1MDB’s position in loan balance up until financial year ending March 31, 2014 stands at RM41.86 billion.
6.2 In terms of asset positions, a 363% rise (in value), from RM9.53 billion in 2012 to RM44.14 billion in 2013, was recorded. This increase resulted from the acquisition of two independent power producers, revaluation of real estate investments, an increase in cash on hand, deposits to Aabar Ltd, concession agreements and leases which have not been received. According to the 2014 financial statements, the value of assets increased by another 16% to RM51.41 billion following the acquisition of another IPP and investment in a portfolio fund manager.
6.3 An analysis of the cash flow on the financial statements from year 2010 to 2014 have shown that 1MDB’s paid-up capital was only RM1 million. This small amount showed that the company was not (financially) stable because it required to borrow for its activities. Throughout financial year 2010 until 2014, 1MDB obtained 17 loans (not inclusive of inherited loans) at a nominal value of RM42.88 billion but received cash amounting to RM39.17 billion. However, (the company’s) activities which were funded by loans did not generate the necessary cash flow to repay the loans.
6.4. Up until Oct 31, 2015, the total amount repayable by 1MDB Group stood at RM55 billion while its assets were valued at RM58.60 billion. Government guaranteed or assisted loans stood at RM20.31 billion.
6.5. Based on the assumption that the rationalisation plan is implemented nd no new loans are taken after Oct 2015, it is estimated that RM42.26 billion is required to repay the loans which will mature between November 2015 and May 2039. 1MDB needs to prepare large sums to fulfil its obligations - RM4.88 billion in 2016, RM14.74 in 2023 and RM5.14 billion in 2039. 1MDB also requires to have at least RM1.52 billion annually from Nov 2015 to May 2024 to repay its loans.
6.6 For the period of 2016 until 2023, the borrowing cost which must be borne by 1MDB Group amounts to RM9.08 billion. The IMTN issued in 2009 will mature in 2039 with coupon payments amounting to RM287.50 per annum. 1MDB Group’s commitment for the IMTN from November 2015 ntil 2039 amounts to RM11.90 billion - RM5 billion principle and RM6.9 billion in interest.
7. Corporate management and Internal Controls
[...] Overall, the management and internal controls in 1MDB Group was “less than satisfactory”. Some management decisions and decisions by the Board of Directors were made without due process. Among others:
1.Between 2009 and 2015, several important investment decisions involving large sums were made through written resolutions by the Board of Directors without any discussion and proper detailed valuation. Several investments were decided on short notice and were high risk. However, the Board of Directors have told the PAC on Jan 19, 2016 that discussions were held before approvals were given through written resolutions.
2.In several situations, the 1MDB management had presented incomplete or inaccurate information to the Board of Directors before an important decision was to be made. In fact, the management sometimes took action without approval from the Board.
3.There were also situations in which the 1MDB management had presented information that was inaccurate or did not correlate with other interested parties.
4.The 1MDB management took actions which were against, or did not fully comply with, Board/shareholder decisions. 1MDB’s record keeping and filing methods were not systematic and less than satisfactory..
- AUDITOR GENERAL'S REPORT ON 1MDB
PART II:FROM SARAWAK REPORT - Bank Negara Malaysia's Damning Letter To The Parliamentary Accounts Committee 7 Jul 2016 7:06 PM (9 years ago)
7 July 2016
We continue our examination of Malaysia's secret Audit Report into 1MDB.....
Bank Of Malaysia's Damning Letter To The Parliamentary Accounts Committee
- 7 July 2016
- 24 comments
Signed by the Deputy of the Bank Negara
Appended to the Auditor General’s report and pivotal to his findings is a damning letter from the Bank Negara (BNM) sent to the PAC, which explains in detail the disgraceful circumstances surrounding the removal of US$1.83 billion from 1MDB under the guise of a joint venture with the firm PetroSaudi between 2009 and 2011.
Written by the Deputy Governor of the Bank BNM on 23rd March, the letter outlines why the bank had issued its demand to 1MDB to return the entire amount.
We attach the English translation below.
It has to be read in the light of a second letter from the Bank sent on 6th April, which has already been reported, confirming that the sole beneficial owner of Good Star Limited was indeed Jho Taek Low, who was acting as Prime Minister Najib Razak’s official advisor to 1MDB. A huge chunk of the ‘public investment’ was therefore siphoned into Low’s private company, as has long been argued by Sarawak Report.
False and inadequate information was provided to BNM
Of key note in this crucial letter from the bank are the points that 1MDB failed in its duty to provide full and accurate information to the Bank to explain the purpose for its removal of these public funds abroad.
The letter says that there were three separate applications to export cash “(Sept 29, 2009 (first permission), Sept 6, 2010 (second permission) and May 20, 2011 (third permission)” and it alleges that 1MDB essentially lied to the bank or withheld information in order to get that permission to send the money abroad:
“BNM can conclude that 1MDB had received permissions … amounting to USD1.83 billion, without providing complete material information, or through misrepresentation of relevant information, for the purpose of [influencing] BNM’s evaluation of 1MDB’s application.”
This is a damning indictment of 1MDB’s deceitful and criminal tactics, which is dealt with in full by the letter below.
However, it also raises questions about the controls within the Bank itself and why it accepted half-baked and unsubstantiated excuses of this nature?
Were the supposedly independent guardians of the nation’s wealth themselves overly influenced and swayed by the political clout of the man managing the fund – ie Najib himself?
YB Dato,Information Regarding Cancellation of Permission to 1MDB Under Exchange Controls Act 1953We refer to your letter dated March 18, 2016 regarding the above mentioned matter.
- Applications for permission under the Exchange Controls Act 1953 (AKPW) (which has been abolished and replaced with the Financial Services Act 2013 [APK]) requires the applicant to present the application to BNM alongside information, supporting documents, detailed explanations regarding the transaction and purpose of transaction. All considerations on applications under AKPW or APK requires BNM to always demand for information and comprehensive information from the applicant.
- For applications for foreign investments, the applicant is not only required to complete the relevant documentations (Form 6b, 9A and 9C) online, but the applicant is also required to provide relevant documents and information regarding the proposed investment. Normally, BNM will contact and deal directly with the applicant to obtain the details and purpose of the investment either before or after the application is made. This ensures that BNM has a complete understanding of the proposed investment before a permission can be granted. It also allows BNM to exercise its mandate to protect Malaysia’s balance of payment and value of our currency.
- On your question, raised in the letter dated March 18, 2016, […] based on information received from 1MDB following the issuance of instructions under APK and information voluntarily supplied by foreign institutions and authorities, BNM can conclude that 1MDB had received permissions on Sept 29, 2009 (first permission), Sept 6, 2010 (second permission) and May 20, 2011 (third permission) for the purpose of investments abroad, amounting to USD1.83 billion, without providing complete material information, or through misrepresentation of relevant information, for the purpose of [influencing] BNM’s evaluation of 1MDB’s application.
- Details of the 3 permissions to 1MDB and information received by BNM can be summarised as follows:
- The First Permission was granted to 1MDB to invest, using foreign currency, to acquire a 40% stake in 1MDB PetroSaudi Limited, British Virgin Island (JV Co), amounting to USD1 billion, for the purpose of investments in the energy, agriculture, real estate and tourism sector. BNM had given this permission based on information provided by 1MDB that the funds will be used by the JV Co for the purpose of investments in those sectors and that the investment will bring Malaysia economic benefits.
1MDB had declared to BNM that the USD1 billion was used to acquire a 40% stake in JV Co which would be remitted by 1MDB to the JV Co’s account, maintained with Banca dela Svizzrera Italiana SA, Geneva and that the USD1 billion was a portion of a working capital of USD2.5 billion which will be invested by the JV Co in the abovementioned sectors. On Sept 30, 2009, 1MDB informed BNM in writing that the funds will be remitted to the JV Co’s account maintained in another bank – JP Morgan (Suisse) SA and RBS Coutts Bank Ltd. BNM acknowledged the change in a letter on the same day. However, BNM was informed by Duetsche Bank Malaysia Bhd on the change in recipient of funds to PetroSaudi, BNM stressed that the change must not go against the original purpose of the investments which have been given permission.BNM realised that USD700 million from the USD1 billion funds that was given permission was remitted by 1MDB to an account owned by Good Star Limited (GSL) at RBS Coutts Bank Ltd and not the account belonging to the JV Co in Switzerland or PetroSaudi’s account. The transfer of funds to GSL was made by 1MDB on behalf of the JV Co to repay the JV Co’s debt of USD700 million which was advanced to the JV Co by 1MDB’s JV partner which is PetroSaudi Holdings (Cayman) Ltd. This material information was not communicated by 1MDB to BNM during the application for the First Permission although 1MDB had prior knowledge and was informed of the JV Co’s debt and had an intention of using a large portion of the funds to repay the debt before the application for the permission was made through BNM.Apart from the change of recipient of the remittance (from the JV Co) to GSL, 1MDB has hitherto failed to provide any documentary evidence or source documents to demonstrate that the JV Co has invested in the energy, agriculture, real estate and tourism sector, which was the purpose of the First Permission by BNM. During the material time, BNM was persuaded by 1MDB to believe that the funds will be used for the purpose of investments in the energy, agriculture, real estate and tourism sector through the JV Co and will benefit the JV Co.Based on information voluntarily provided by foreign authorities, the ultimate beneficial owner of GSL is an individual who has no relations to PetroSaudi International Ltd, which is the shareholder of PetroSaudi Holdings (Cayman) Ltd. On May 28, 2015 the Malaysian Anti-Corruption Commission (MACC) and BNM had written to the Attorney-General’s Chambers to seek Mutual Legal Assistance from Switzerland for the purpose of obtaining evidence.
- The Second Permission was for 1MDB to provide loans in foreign currency to the JV Co through the subscription of Murabaha Note that was issued by the JV Co amounting to USD500 million (equivalent of RM1.6 billion). The bank had given this permission based on information provided by 1MDB in which the funds amounting to USD500 million will be used by the JV Co to finance a portion of the cost of acquiring a 4% equity stake in a public listed company in France (French Company) which is involved in the generation and distribution of energy. In their application, 1MDB informed BNM that the investment was in line with the strategic mandate given by the Government of Malaysia to 1MDB for the development of the nation’s energy sector.
However, 1MDB has since confirmed that the USD500 million was not used by the JV Co to finance a portion of the cost of acquiring a 4% equity stake in the French Company, as stated by 1MDB to BNM during the application for the Second Permission. In a letter dated May 29, 2015, 1MDB had told BNM that the JV Co had an absolute right to use all funds received from 1MDB. This is a material information that was not revealed by 1MDB to BNM during its application for the Second Permission.
- The Third Permission was for 1MDB to provide an additional loan in foreign currency to the JV Co through the subscription of Murabaha Notes that were issued by the JV Co amounting to USD330 million. BNM had provided permission based on information supplied by 1MDB to the Bank, that the USD330 million will be used by the JV Co to finance its oil and gas projects.
However, the funds amounting to USD330 million was transferred to GSL and not the JV Co as previously stated by 1MDB to BNM. 1MDB did not inform the bank of this material information although 1MDB had prior knowledge that the funds will be channeled to GSL and not the JV Co, which is before the application was made to BNM. 1MDB has hitherto not provided any documents and source documents to demonstrate that the JV Co has invested in the oil and gas sectors with the funds agreed by BNM.The above explanation is our feedback regarding the questions raised by you. We are always ready to provide further explanations regarding the above matters if needed.Thank you.Sincerely,Nor Shamsiah Yunus
Deputy Governor
Did BNM succumb to overwhelming pressure?
Zeti – Did the Governor of the independent Bank Negara have insufficient powers to hold 1MDB accountable?
This frank and detailed account raises questions about the robustness of BNM’s own internal checks, when faced with what was clearly an overwhelming political pressure from the Minister of Finance himself.
Clearly, on a number of accounts the bank proceeded owning to deliberate misinformation by 1MDB, including the understanding there would be an injection of a further US$1.5 billion from PetroSaudi into the joint venture as well.
Neither was the “material information” that US$700 million had been tagged as a loan by PetroSaudi onto the subsidiary which it then injected into the joint venture (with a provision for an immediate repayment) communicated to the bank or to the Board of 1MDB. Again, at the time the second permission was granted, BNM was informed that 1MDB was investing in a French power generation company, which was false.
However, there is no indication that papers were supplied to support the bogus claim by 1MDB nor that once this problem was discovered the matter was actively pursued by the bank until the scandal broke in the media and investigations were launched last year.
Likewise, with regard to the loan for US$330 million, which went straight to Jho Low’s Good Star Limited, supposedly to purchase oil and gas projects, which again never materialised.
Bank Negara documents do show that efforts were made by its regulators to pursue 1MDB for updates on these projects.
However, their communications were arrogantly ignored or sidelined for many months by the powerfully protected management, who under the secret Section 117 of the company considered themselves to be working solely and directly to the Minister of Finance, Najib Razak.
The letter below:
PART I: SARAWAK REPORT UNVEILS THE AUDITOR-GENERAL'S REPORT ON 1MDB KEPT SECRET UNDER OSA BY PM NAJIB ABDUL RAZAK. 7 Jul 2016 6:59 PM (9 years ago)
The Shocking Truth About 1MDB - We Unlock The Officially Secret AG Report
- 6 July 2016
- 33 comments
Sarawak Report has now gained extensive access to the Auditor General’s report into 1MDB, along with key accompanying documents from the enquiry.
This report was originally commissioned to shed light on the disappearance of billions of dollars, but was later declared an ‘Official Secret’ by Najib Razak.
In charge – Najib Razak
Our review has made it abundantly clear why Najib decided that the findings could not be released, since he wishes to remain Prime Minister – after all he is also the Finance Minister and sole shareholder responsible for decision-making at 1MDB and the conclusions are damning.
What the Auditor General encountered, according to the documents, was chaos and confusion in an organisation where senior executives were unable to provide convincing or consistent explanations for vast payments made to a bogus subsidiary of Abu Dhabi’s sovereign fund Aabar and to a separate false subsidiary of an earlier venture partner, PetroSaudi.
A grand total of US$7 billion is calculated as having gone missing and conflicting and unbelievable explanations were given about why the payments were made.
The AG lamented that the justifications provided for retrospective Board ratifications of those payments (which had already been made months earlier by management without prior permission) changed from one year to the next: furthermore, multi-billion dollar payments were made for the same advertised purpose two times over.
The AG even complained that management would provide one story to his enquiry on one occasion and then completely re-write their own version of events the next time they met.
There was never sufficient proof according to his data, to back up the stories being told. In particular, bank statements were not provided to substantiate many of the simply enormous sums that 1MDB management alleged were being invested in various funds or in ‘refundable deposits’ or ‘terminations of options’ with the bogus Aabar Investments PJS Limited, based in the British Virgin Islands.
Arul Kanda – last minute new versions of the truth!
On one case the AG was plainly so incensed by the variable and inconsitent claims by 1MDB management (headed by CEO Arul Kanda), that he described their final version of events as “suspicious” and “unsubstantiated” and therefore refused to accept the documents 1MDB had provided as reliable evidence.
This matter related to a purported US$1.392 billion, that had supposedly been redeemed from 1MDB’s Cayman Island fund, and was originally recorded as having been spent on the termination of options owed to Aabar ($993 million), plus the repayment of loans.
That is what the Board was informed in December 2014 and what was recorded in the Annual Report (even though the AG records there was insufficient proof this was how the money was spent).
The AG – unimpressed
Then as late as February 2016, to the AG’s disbelief, he was presented with a series of papers ratified by the Board on November 26th 2015 which a year on provided an entirely separate story for how the money was used.
Based on an alleged agreement signed by management in October 6th 2014 (after most of the money had already been paid), the Board on November 26th 2015 retrospectively ratified a series of payments to Aabar Ltd totalling US$1.15 billion saying they had been for the ‘extension of guarantees’ for loans (see our previous story).
The AG complained that there had been no mention of this belated new explanation when he had previously met with 1MDB in December, although it had all been supposedly signed off the previous month:
a. Although this resolution was approved on Nov 26, 2015 it was only presented to the JAN [AG enquiry] on Feb 2016. This important information was not raised during (JAN’s) discussions with 1MDB’s management held on Dec 16, 2015. This raises doubts on the veracity of the information and documents which were presented.b. This also showed that the 1MDB management had made payments without prior knowledge or approval from the Board. The information is also in conflict with information that was given by the 1MDB management during the Board meeting on Dec 20, 2014 – that USD1.392 billion from the redeeming of SPC funds had been used to pay for Aabar’s Termination of Options amounting to USD993 million and the USD399 million used for interest payments for the USD Note(s). However, JAN was unable to verify both payments. [Addendum Document to AG’s Report]
It gets worse, thundered the AG in his addendum to his report, explaining why he had rejected the belated material from his enquiry, on the grounds that it was simply too suspicous:
Although the agreement was signed on Oct 6, 2014, the document was only presented to JAN on Feb 2016 and this important information was not acknowledged or raised during meetings with 1MDB’s management on Dec 16, 2015. This raises doubts on the veracity of the information and documents that were presented.4. Remittance Slip regarding payments to Aabar and Aabar LtdThere are 9 remittance slips regarding payments to Aabar (1) and to Aabar Limited (8) which were presented to JAN on Feb 2016. This important information was not acknowledged or raised during meetings with 1MDB’s management on Dec 16, 2015. The veracity of the format of documents was suspicious as it does not include written instructions to the bank nor bank statements as supporting documents.[Addendum Document to AG’s Report]
Double payment meant 1MDB bought out Aabar’s ‘options’ for more than its guaranteed power plants were even worth!
The AG continues by saying that according to the original data provided by 1MDB the ‘options to Aabar’ were terminated twice over with near identical payments totalling over US$1.8 billion – more than the total value of the 49% of the company Aabar was supposed to be guaranteeing.
Indeed it seems clear that the decision to alter the reason given for these payments was only taken after this outrageous double payment had been spotted and reported upon in the press over a year later. The AG wasn’t buying it:
5. Funds from the Duetsche Bank loan (USD250 mil and USD975 mil), a total of USD855 mil was used for Aabar’s termination of option from May to Sept 2014. According to the Board’s minutes on Dec 20, 2014, a total of USD993 mil was also paid between Sept and Dec 2014. This means that the total amount paid for the termination of option was USD1.848 billion. The total termination of options payment amounting to USD855 million was only changed to Top Up Collateral (Security Deposit) a year later through the Ratification of IPO Variation Payment Made to IPIC on Nov 26, 2015. This demonstrated that the original intention of 1MDB was to pay a total of USD1.848 billion to Aabar Ltd, in contrast with the total stated in the Agreement Relating to Option Agreement (Settlement Agreement) amounting to USD300 mil (refer to Chapter 5, para 7.3.3.4. Pg 189). [Addendum Document to AG’s Report]Apart from this, the USD1.848 billion amount exceeded the 49% equity value in 1MDB Energy Sdn Bhd (1MESB), which amounts to RM1.225 billion, and RM862.40 million in 1MDB Energy Langat Sdn Bhd (1MELSB) which amounts to RM2.09 billion in total (refer to Chap 5, para 7.3.2. Pg 182).
Slack?
That a government fund could be run in such a negligent fashion, with such an apparent slip-shod attitude towards the dispensing of billions of dollars of public money, would under normal circumstances defy belief.
Ex-CEO Shahrol Halmi – protected by his dear friends Najib and Rosmah
Scanning through the AG’s forensic analysis, readers are consequently led to one glaring conclusion, which is that no one, from 1MDB’s management to the Board, considered it to be their job to worry about the genuine custody and investment of all this cash.
In other words, the fund was plainly a front behind which money was being siphoned out by the man in charge (the sole shareholder/Finance Minister/Prime Minister).
No one could conclude otherwise from the narrative and criticism laid out in the AG’s 300 page plus report and analysis, as we shall show over coming articles.
No wonder the Prime Minister, who had a year before assured Malaysians that their concerns would be put to rest about the loss-making fund through this audit, has decided to make it a secret instead.
Changing Options
This was how the Auditor General in the main body of his report referred to how the Board was informed about the supposed second payment of options to Aabar, made from money lent by Deutsche Bank, based on a promise that there was a collateral cash holding of a billion dollars in BSI Bank Singapore (untrue).
“8.9 The Board of Directors [of 1MDB] were informed on Dec 20, 2014 that Deutsche Bank AG, Singapore had agreed that the USD993 million be used to pay for Aabar’s termination of options from redeeming the SPC funds amounting to USD1.392 billion. Tthe balance of USD399 million were to be used to pay interest off loans in USD Notes.8.10 However, details about the payment of USD993 million to Aabar for the termination of options and the interest payments on the USD Notes amounting to USD399 could not be verified by JAN. The Board of Directors had also sought details on the payments on Dec 20, 2014, but checks by JAN have established that the matter was not raised again during subsequent Board of Directors meetings. During their meeting on Feb 23, 2015, the Board of Directors had raised the issue of payments for Aabar’s termination of options, and that they were informed only after the payment was made. This showed that the payment for Aabar’s termination of options was made without the Board of Director’s approval.”
In other words, neither the Auditor nor the Board of Directors were ever able to get any proof out of 1MDB management that the money had existed in the first place or had been utilised in the manner being claimed!
A pattern of activity, whereby the Board failed to be consulted by management and was just expected to sign off vast payments retrospectively, is confirmed time and again in this report.
Bogus Guarantees
The AG also deals with the whole frustrating story of the supposed ‘security deposits for guarantees’, which we now also know were in fact never part of the formal agreements with Aabar/IPIC when the Abu Dhabi fund agreed to guarantee the US$3.5 billion raised in two ‘power purchase’ loans in May and October 2012.
He confirms that nevertheless a total of US$1.367 billion was paid in the name of such guarantees to the bogus Aabar Limited in BVI:
Chap 5 – Energy Sector.Item 7 “Funding for 1MDB Group’s Energy Sector”7.3.2.2. Collaboration Agreement for Credit Enhancement7.3.2.2. (f) Checks by JAN [AG Department] found that the security deposit amounting to USD1.367 billion (RM4.468 billion) was paid by 1MEL (1MDB Energy Ltd) and 1MELL (1MDB Energy [Langat] Ltd) to Aabar Ltd and was recorded as a security deposit in the financial statements of 1MEHL (1MDB Energy Holdings Ltd) for the year ending May 31 2013 and 2014. However, the security deposit payments were made without the approval of the Board of Directors. The responsibility of payment for the security deposit for the issuance of the first USD Notes was transferred to 1MEHL because 1MEHL had acquired 1MEL from 1MDB. This is based on the Assumption for Obligations Agreement dated Nov 1, 2012 between 1MEHL and 1MEL. Details are as follows:Table 5.27 – Security Deposit Payments to Aabar Ltd [pg 184]
Date Payee Total USD mil Total RM mil 22/05/2012 1MEL 576.94 1,885.73 19/10/2012 1MELL 790.35 2,583.63 TOTAL 1,367.29 4,468.99 Source: Agreement and Deloitte papers
Note: BNM exchange rates = May 2012 (RM3.18) and Oct 2012 (RM3.06)
Total of US$7 billion missing!
The above dodgy payment, it should be noted, joins a number of others which the AG said 1MDB failed to substantiate with any concrete evidence such as bank statements.
Accompanying the report is a chart produced by the AG’s department detailing the unsatisfactory and unproven payments identified by his enquiry, with total up to the US$7 billion, which the AG concludes has effectively gone missing from 1MDB:
INVESTMENTS WHICH COULD NOT BE VERIFIED[GRAND TOTAL $6.87 bn]
The culpability and deliberate deceit behind all this mismanagement is summed up by the Auditor in his addendum document about the bogus ‘Top-Up Security Deposit’.
His final paragraph states that the then CEO and present Board Member Shahrol Halmi, knew perfectly well there were no payments owing to Aabar for its guarantees on the loan.
This was because the AG had a copy of the original agreement signed between Halmi and IPIC/Aabar in May 2012.
IPIC was happy to rely on the promise of a Malaysian Ministry of Finance obligation to 1MDB (ie the taxpayer was liable).
IPIC and 1MDB had signed another agreement known as Interguarantor Agreement on May 21, 2012. This agreement was signed by Shahrol Azral on behalf of 1MDB and Khadem Al-Qubaisy for IPIC. Checks by JAN showed that the agreement did not state a need for 1MDB or its subsidiaries to issue USD Notes to implement the “option and credit enhancement” to Aabar Ltd in return for a guarantee from IPIC. (emphasis theirs).According to the main condition of this agreement, 1MDB must continue to be wholly owned by MKD (Finance Ministry Inc). 1MDB also needs to receive sufficient support and funds from MKD to repay IPIC, should 1MDB fail to repay all the cost, expenditure and all obligations regarding this note [USD Notes?]. Although a guarantee was given by IPIC, 1MDB still bears all the risks should there be any failure to pay for all the cost regarding the servicing of the USD Note.
Following the AG’s report and parallel Public Accounts Committee report the Inspector General of Police publicly notified that he would be investigating this former CEO and Board Member of 1MDB over suspected criminal behaviour.
Secret no longer.
However, a month later and no such moves have been made, although numerous critics of 1MDB (all vindicated) have been harassed, persecuted and charged on apparently trumped up charges.
Halmi, on the other hand, has let it be known that he considers himself protected by the power of the Prime Minister/Finance Minister and the kind and gracious support which he is receiving from his wife, Rosmah Mansor.
SR wishes readers a Happy Eid with hopes for better things to come.
More on the details of the AG report later this week.
MALAYSIA: IGP's Company Is Flogging Guns In Kuala Lumpur 22 Apr 2016 3:36 PM (9 years ago)
FROM SARAWAK REPORT, 22 APRIL 2016
A company owned by Malaysia's top policeman, the Inspector General of Police Khalid Abu Bakar, is selling guns for which only he can issue permits, according to its own website!
She could recommend us a Glock, said the assistant at Nilai Arms & Ammunition this week.
The KL company boasts online that it can offer the “best selection” of guns available, and we had explained we were looking for something suitable for our ‘bodyguard’.
Niloh displays an array of weapons for sale, both of the sort used for hunting and of the sort that gangsters use to kill.
Lethal weapons – take your pick
As its name suggests, Nilai also sells ammunition. “Out of ammo?” it advertises with a catchy American ring, “call NAA”. Displayed are cartridges and deadly bullets.
Shotgun cartridges… as well as deadly bullets!
Need a permit?
In Malaysia, of course, the use and ownership of guns is highly restricted. In fact, as the site helpfully points out, you need to acquire a permit signed not only by your district police chief, but also the state police chief and indeed the national police chief (the IGP) as well.
It’s quite a lot to organise.
Google translation of the section of the police website on guns linked to by the Nilai website
– http://www.rmp.gov.my/pelesenan-senjata-api/pengenalan
However, Sarawak Report was drawn to Nilai arms by disgruntled people, who got in touch, because it has become a known thing, they said, that if you want to get that permit without excessive fuss and bother, then you had better go through this particular company to buy your weapon.
” Applicants for import / usage license, when they failed to get the permits, they will resort to appoint NAA, which will smooth the application” was how one person contacting Sarawak Report explained the situation.
How come?
Sarawak Report pulled the company records for Nilai Arms & Ammunition Sdn Bhd, which is registered in KL, and found some exceedingly interesting ownership details. The majority of the shares belong to a young woman, born in 1984.
Juwiza Binti Khalid is the second daughter of the Inspector General of Police (IGP), Khalid Abu Bakar.
IGP’s 32 year old daughter is the majority owner of the company, set up in 2012 just before Abu
Bakar was appointed
Bigwigs in Malaysia are no strangers to conflict of interest, of course, but this example of it is surely one of the most breath-taking!
The fact that the man, who is supposedly in charge of keeping law and order on the streets, to which end a tight control over guns means that only he can sign permits, actually owns a company which sells these weapons and can assist in “smoothing the application” for his signature, simply defies belief.
Office in KL
It would appear that Abu Bakar spends his day job catching dangerous criminals, only to go home to sign off lucrative permits to allow their weapons (sold by his own private company) to be made available on the streets.
As one KL observer remarked bitterly to Sarawak Report “the police have an interest in the town becoming more dangerous for middle class folk. It means they have to live in compounds and hire former police officers to be their bodyguards”.
One can forgive the cynicism.
Because Khalid stands to get richer the more dangerous the streets become and his retired colleagues will thank him for the increase in bodyguard positions!
What about those who cannot afford a bodyguard, but who pay the taxes that fund the IGP and all his men?
This is why it is so supremely important that people in public positions avoid all such conflicts of interest, whether they hold the shares themselves or put them in the names of their young daughter.
When we started to press for further help and information on getting our Glock (and permit) the shop assistant gave us the phone number for her “boss”, whom she told us was Haji Mohd Isa. He was the one to talk to.
Other shareholder is the village head from IGP’s home town, born in the very same year!
The boss she was referring to, of course, is none other than the other shareholder in the company, Mohd Isa bin Hussin.
Mohd Isa is the village chief of Kampung Gebok, Mantin, Negeri Sembilan, the same region as Nilai.
Should we consider it a coincidence that IGP Khalid Abu Baker was born in Kg Gebok, Mantin, Negeri Sembilan in the same year of 1957 as this village chief?
One can only assume that these two village lads went to school together, were probably friends and went hunting together as well!
[update – SR has now been informed that the relationship is even closer. That Mohd Isa bin Hussin is the IGP’s brother in law!]
But we could not check because Mohd Isa wasn’t picking up the phone.
The current IGP was appointed in May 2013, a year after he opened his company, and has proved extremely controversial, having focused his activities on persecuting civil rights activists and freedom of speech, in line with the present government’s apparent priority of protecting the position of the Prime Minister over any other consideration.
No doubts about it
Khalid has opened a special five man unit to scour Tweets for ‘seditious tendencies’ and only last week he arrested one opposition MP on the steps of Parliament, for saying he had read a secret document that showed corruption at 1MDB.
He has also been condemned for supporting the unlawful shooting by a police officer of a 15 year old boy, shot 21 times by pursuing cops.
What’s more, he remains, together with the handpicked AG, the most important champion of the current Prime Minister, who is drowning in evidence of corruption over 1MDB.
So, what chance is there of action against this ‘bit of business on the side’ by IGP Khaled Abu Bakar?
One victim of the situation commented to Sarawak Report today:
“A country that if free and clear of any governance and policing of money launderers is prone to become a handy trading hub for organised crime and terrorism and this is one example of what is happening on a very big scale in Malaysia” said Pascal Najadi, whose father was gunned down on the streets of KL by a hired assassin whom the police refused to prosecute in 2013.
-SARAWAK REPORT
Complete List of PEOPLE Named in the Panama Papers 7 Apr 2016 5:44 AM (9 years ago)
Heads of state
- Argentina Mauricio Macri, President of Argentina
- Saudi Arabia Salman, King of Saudi Arabia
- United Arab Emirates Khalifa bin Zayed Al Nahyan, President of the United Arab Emirates and Emir of Abu Dhabi
- Ukraine Petro Poroshenko, President of Ukraine
Former heads of state
- Qatar Hamad bin Khalifa Al Thani, former Emir of Qatar
- Sudan Ahmed al-Mirghani, former President of Sudan
- Heads of government
- Iceland Sigmundur Davíð Gunnlaugsson, Prime Minister of Iceland (resigned April 5, 2016)
Former heads of government
- Georgia (country) Bidzina Ivanishvili, former Prime Minister of Georgia
- Iraq Ayad Allawi, former Acting Prime Minister of Iraq
- Jordan Ali Abu al-Ragheb, former Prime Minister of Jordan
- Qatar Hamad bin Jassim bin Jaber Al Thani, former Prime Minister of Qatar
- Ukraine Pavlo Lazarenko, former Prime Minister of Ukraine
- Moldova Ion Sturza, former Prime Minister of Moldova
Other government officials
- Algeria -Abdeslam Bouchouareb, Minister of Industry and Mines
- Andorra -Jordi Cinca, Minister of Finance
- Angola -José Maria Botelho de Vasconcelos, Minister of Petroleum
- Argentina – Néstor Grindetti, Mayor of Lanús
- Botswana- Ian Kirby, President of the Botswana Court of Appeal and former Attorney General
- Brazil – Joaquim Barbosa, former President of the Supreme Federal Court,Eduardo Cunha, President of the Chamber of Deputies,Edison Lobão, Member of the Senate and former Minister of Mines and Energy,João Lyra, Member of the Chamber of Deputies
- Cambodia – Ang Vong Vathana, Minister of Justice
- Chile -Alfredo Ovalle Rodríguez, intelligence agency associate
- Democratic Republic of the Congo,,Jaynet Kabila, Member of the National Assembly
- Republic of the Congo – Bruno Itoua, Minister of Scientific Research and Technical Innovation and former Chairman of the SNPC
- Ecuador – Galo Chiriboga, current Attorney General,Pedro Delgado, cousin of President of Ecuador Rafael Correa, and former Governor of the Central Bank
- France – Patrick Balkany, Member of the National Assembly and Mayor of Levallois-Perret,Jérôme Cahuzac, former Minister of the Budget,Jean-Marie Le Pen, former president of the National Front and father of current party leader Marine Le Pen
- Greece – Stavros Papastavrou, advisor of former Prime Ministers Kostas Karamanlis and Antonis Samaras
- Hungary – Zsolt Horváth, former Member of the National Assembly
- Iceland -Bjarni Benediktsson, Minister of Finance,Júlíus Vífill Ingvarsson, Member of Reykjavík City Council (resigned April 5, 2016),Ólöf Nordal, Minister of the Interior
- India -Anurag Kejriwal, former President of the Lok Satta Party Delhi Branch, Anil Vasudeva Salgaocar, A Goa-based mining baron and former MLA
- Kenya -Kalpana Rawal, Deputy Chief Justice of the Supreme Court
- Malta -Konrad Mizzi, Minister of Energy and Health
- Nigeria -James Ibori, former Governor of Delta State
- North Korea -Kim Chol Sam, Daedong Credit Bank representative based in Dalian and presumed high official
- Palestine -Mohammad Mustafa, former Minister of National Economy
- Panama – Riccardo Francolini, former chairman of the state-owned Savings Bank
- Peru -César Almeyda, Director of the National Intelligence Service
- Poland -Paweł Piskorski, former Mayor of Warsaw
- Rwanda -Emmanuel Ndahiro, brigadier general and former chief of the intelligence agency
- Saudi Arabia -Muhammad bin Nayef, Crown Prince and Minister of the Interior of Saudi Arabia
- Sweden -Frank Belfrage, former State Secretary for Foreign Affairs
- United Kingdom -Michael Ashcroft, retired member of the House of Lords,Tony Baldry, former Conservative MP for Banbury,Michael Mates, former Conservative MP for East Hampshire,Pamela Sharples, Member of the House of Lords
- Venezuela -Victor Cruz Weffer, former commander-in-chief of the army,Jesús Villanueva, former Director of PDVSA
- Zambia -Atan Shansonga, former Ambassador to the United States
Relatives and associates of government officials
- Argentina – Daniel Muñoz, aide to former presidents Cristina Fernández de Kirchner and Néstor Kirchner
- Azerbaijan – Mehriban Aliyeva, Leyla Aliyeva, Arzu Aliyeva, Heydar Aliyev and Sevil Aliyeva, family of President Ilham Aliyev
- Brazil -Idalécio de Castro Rodrigues de Oliveira, potential briber of the Brazilian President of the Chamber of Deputies Eduardo Cunha and a Portuguese entrepeneur
- Canada -Anthony Merchant, husband of Senator Pana Merchant.
- China -Patrick Henri Devillers, French business associate of Gu Kailai, convicted murderer and wife of former Minister of Commerce and Member of the Politburo Bo Xilai,Deng Jiagui, brother-in-law of President Xi Jinping,Jasmine Li, granddaughter of former Member of the Politburo Jia Qinglin,Li Xiaolin, daughter of former Premier Li Peng
- Ecuador -Javier Molina Bonilla, former advisor to Director of the National Intelligence Secretariat Rommy Vallejo
- Egypt -Alaa Mubarak, son of former President Hosni Mubarak
- France -Frédéric Chatillon, business associate of Marine Le Pen, leader of the National Front,Arnaud Claude, former law partner of former President Nicolas Sarkozy,Nicolas Crochet, accounting associate of Marine Le Pen, leader of the National Front
- Ghana – John Addo Kufuor, son of former President John Kufuor
- Guinea- Mamadie Touré, widow of former President Lansana Conté
- Honduras -César Rosenthal, son of former Vice President Jaime Rosenthal
- Ireland -Frank Flannery, political consultant and Fine Gael’s former Director of Organisations and Strategy
- Italy -Giuseppe Donaldo Nicosia, convicted of bribery alongside former Senator Marcello Dell’Utri
- India -Jehangir Soli Sorabjee, son of former attorney general Soli Sorabjee and a honorary consultant physician at Bombay Hospital,Harish Salve, India’s leading lawyers and son of N. K. P. Salve, member of the Indian National Congress party,Rajendra Patil, son-in-law of veteran Congressman and Karnataka Horticulture Minister Shamanuru Shivashankarappa and a businessman
- Ivory Coast -Jean-Claude N’Da Ametchi, associate of former President Laurent Gbagbo
- Kazakhstan -Nurali Aliyev, grandson of President Nursultan Nazarbayev
- Malaysia -Mohd Nazifuddin Najib, son of Prime Minister Najib Razak and his cousin
- Mexico -Juan Armando Hinojosa, “favourite contractor” of President Enrique Peña Nieto
- Morocco -Mounir Majidi, personal secretary of King Mohammed VI
- Pakistan -Maryam Nawaz, Hasan Nawaz Sharif and Hussain Nawaz Sharif, children of Prime Minister Nawaz Sharif
- Russia -Sergei Roldugin, Arkady Rotenberg and Boris Rotenberg, friends of President Vladimir Putin
- Senegal -Mamadou Pouye, friend of Karim Wade, himself the son of former President Abdoulaye Wade
- South Africa – Khulubuse Zuma, nephew of President Jacob Zuma
- South Korea -Ro Jae-Hun, son of former President Roh Tae-woo
- Spain -Pilar de Borbón, sister of former King Juan Carlos I,Micaela Domecq Solís-Beaumont, wife of Miguel Arias Cañete, European Commissioner for Climate Action and Energy and former Spanish Minister of Agriculture, Food and Environment,Oleguer Pujol, son of Jordi Pujol i Soley, former President of Catalonia
- Syria- Rami and Hafez Makhlouf, cousins of President Bashar al-Assad
- United Kingdom -Ian Cameron, father of Prime Minister David Cameron
- United Nations -Kojo Annan, son of former Secretary-General Kofi Annan
Sports personalities
- Juan Pedro Damiani, Uruguayan member of the FIFA Ethics Committee
- Eugenio Figueredo, Uruguayan American former president of CONMEBOL and vice president and member of the ethics committee of FIFA
- Gianni Infantino, Swiss-Italian president of FIFA
- Hugo and Mariano Jinkis, Argentine businessmen also implicated in the 2015 FIFA corruption case
- Michel Platini, French former president of UEFA
- Jérôme Valcke, French former secretary general of FIFA
- Mattias Asper, Valeri Karpin, Nihat Kahveci, Tayfun Korkut, Darko Kovačević, Gabriel Schürrer and Sander Westerveld had accounts created by Real Sociedad and its president(s) principally Iñaki Otegui, under the leadership of José Luis Astiazarán, Miguel Fuentes, María de la Peña, Juan Larzábal and Iñaki Badiola
- Gabriel Heinze, Argentine former footballer, account (with his mother) during Manchester United years
- Lionel Messi, footballer for Barcelona and the Argentine national team
- Brian Steen Nielsen, Danish former footballer and sports director of Aarhus Gymnastikforening
- Marc Rieper, Danish retired footballer
- Clarence Seedorf, Dutch former footballer
- Leonardo Ulloa, Argentine footballer
- Iván Zamorano, Chilean retired footballer, account during Real Madrid years
- Àlex Crivillé, Spanish former Grand Prix motorcycle road racer
- Nico Rosberg, German Formula 1 driver at Mercedes AMG Petronas
- Jarno Trulli, Italian former Formula 1 driver
- Tomas Berdych, Czech professional tennis player on the ATP World Tour, currently ranked world number seven
- Nick Faldo, English professional golfer on the PGA European Tour, now mainly an on-air golf analyst
Entertainment personalities
- Agustín Almodóvar, Spanish film producer and younger brother of filmmaker Pedro Almodóvar
- Pedro Almodóvar, Spanish film director, screenwriter, producer and former actor
- Amitabh Bachchan, Indian actor
- Aishwarya Rai Bachchan, Indian actress and former Miss World.
- Jackie Chan, Hong Kong actor
- Franco Dragone, Italian Belgian theatre director, known for his work for Cirque du Soleil
- David Geffen, Hollywood mogul, co-founder of DreamWorks
- Vinod Adani, Indian businessman, elder brother of Gautam Adani, Adani Group
- Bank Leumi’s representatives and board members.
- Hollman Carranza, son of Colombian emerald mogul Víctor Carranza
- Rattan Chadha, Indian-born Dutch businessman, founder of Mexx clothing
- Jacob Engel, Israeli businessman active in the African mining industry.
- Luca Cordero di Montezemolo, Italian businessman and politician
- Anthony Gumbiner, British businessman, chairman of Hallman Group
- Solomon Humes, Bahamian bishop of a small denomination
- Soulieman Marouf, British Syrian businessman Nakash family members
- Idan Ofer, London-based Israeli business magnate and philanthropist, founder of Tanker Pacific.
- Igor Olenicoff, American billionaire
- Marianna Olszewski, American financial author and life coach.
- K P Singh, Indian businessman
- Frank Timiș, Romanian-born Australian businessman
- Dov Weissglass, Israeli lawyer and business man who has been closely linked with the Middle East peace process, particularly under Prime Minister Ariel Sharon.
- Teddy Sagi, a London-based Israeli billionaire businessman founder of Playtech and the majority shareholder of Market Tech Holdings, which owns London’s Camden Market, and of two AIM-listed technology companies.
- Jacob Weinroth, an Israeli attorney, founder partner of Dr. J. Weinroth & Co. Law Office and owner and director of Sapir Holdings.
- Benjamin Wey, Chinese American financier and president of New York Global Group Main shareholders of Anheuser-Busch InBev
- Mallika Srinivasan,Chairman and Chief Executive Officer of TAFE – Tractors and Farm Equipment Limited and Indira Sivasailam (died in December 2008)
- Abdul Rashid Mir, founder and CEO of Cottage Industries Exposition Limited (CIE) & Tabasum Mir
- Zavaray Poonawalla, Brother of billionaire Cyrus S. Poonawalla and heads the managing committee of Royal Western India Turf Club (RWITC)
- Mohan Lal Lohia, Father of Sri Prakash Lohia, founder and chairman of Indorama Corporation
- Onkar Kanwar, Chairman & MD of Apollo Tyres
- Garware family, family of Abasaheb Garware, was a pioneering industrialist from Maharashtra state in India
- Shishir K Bajoria, promoter of SK Bajoria Group, which has steel refractory units
- Mario Vargas Llosa, Peruvian writer, winner of the Nobel Prize in Literature
Others
- Marllory Chacón Rossell, Guatemalan drug trafficker.
- Jorge Milton Cifuentes-Villa, Colombian drug trafficker, head of the Cifuentes-Villa Drug Trafficking Organization and partner of Joaquín “Chapo” Guzmán.
- Rafael Caro Quintero, Mexican drug trafficker and one of the founders of the now-disintegrated Guadalajara Cartel.
- Iqbal Mirchi[73] (died 14 August 2013), right-hand man of India’s most wanted criminal, Dawood Ibrahim
- Gonzalo Delaveu, head of global corruption watchdog Transparency International’s Chile branch (resigned 4 April 2016)
How 1MDB's Stolen Money Funded Top UK Private Schools 5 Apr 2016 4:45 AM (9 years ago)
FROM SARAWAK REPORT
4 APRIL 2016
One of the clients of the off-shore incorporations firm Mossack Fonseca, exposed in the so-called Panama Papers this week, was PetroSaudi’s Tarek Obaid.
Using a web of off-shore vehicles, he and fellow director Patrick Mahony secretly invested some of the millions they obtained in illegal backhanders from Malaysia’s Development fund in a private education company that bought up some of the UK’s poshest private schools.
Documents acquired by Sarawak Report reveal that the two men are the secret funders behind the self proclaimed entrepreneur, Marwan Naja, who acts as Chairman of Bellevue Education, a fast growing business, which has acquired 12 lucrative schools since 2010.
The Bellevue Education Group, previously named The Really Great Education Company Limited, is officially run from Geneva, although its UK registered company address is the PetroSaudi headquarters in Curzon Street.
In fact, the business is primarily owned by two vehicles named Plato One and Plato Two based in Hong Kong, which are in turn controlled by Mahony together with an off-shore company owned by Obaid called Maplehill Property Limited (BVI).
In the course of setting up the complex ownership structure in 2010 Marwan (who has just one share) reported he had:
“taken specific tax advice from a firm of internationally recognised accountants which has confirmed to him in writing that no Tax will be payable.. as a result of any dividends, distributions or other returns..whether during the Investment or following an exit from the Investment”
“Passionate about education” – Mark Malley has cashed in on his passion
The revelations will be an embarrassment to the high profile educationalist, Mark Malley, who set up the company, after what he claims was a highly successful stint as a headmaster, turning around failing schools.
He is the Chief Executive of Bellevue Education Group and owns shares in the fast expanding venture, which plainly seeks to cash in on a perceived burgeoning market for private early years schools in and around London.
The re-structuring and re-branding of Bellevue took place in late 2010, after a major initial injection of five and a half million pounds from the new secret investors, who engaged Marwan Naja to represent their interests, according to documents obtained by Sarawak Report.
The two PetroSaudi directors agreed to make available more cash when needed to expand the project and we have evidence they raised over £20 million (RM110 million) in share capital and lending over the course of the next few months.
Patrick Mahony –
The cash flow became available not long after both men received large sums of money directly into their private JP Morgan Suisse bank accounts from the now fugitive Malaysian businessmen Jho Low, which was termed as a payment for their role in “brokering” the billion dollar 1MDB PetroSaudi joint venture in September 2009 – from which Low siphoned out US$700 million into his private company Good Star Limited.
Tarek Obaid received US$85 million in this initial backhander, of which bank accounts show US$33 million was passed on to Mahony.
Neither man had been previously wealthy, however the injection of a further US$300 million into their company PetroSaudi, combined with further later backhanders from 1MDB via Low transformed their fortunes.
Avoiding tax on stolen cash
Sarawak Report has already reported how, within a month of receiving his pay out for ‘fronting’ Jho Low’s theft from 1MDB, Mahony had bought a £6 million town housein London’s swanky Notting Hill.
Tarek Obaid, was transformed from a cash hungry youth in Geneva to the head of a ‘philanthropist family foundation’ by his involvement in the 2009 PetroSaudi heist.
He went to considerable lengths, hiring advisors and setting up another set of complex off-shore companies, in order to register the ownership as ‘non-domicile’, thereby to again avoid paying tax.
The money has, of course, been lost to Malaysia’s own development opportunities, in the name of which these public funds were originally borrowed.
Sarawak, which faces a state election at the end of the month, still suffers from an appallingly low education provision for its indigenous rural communities, many of whom are forced to send their very young children to boarding schools, situated days away from their homes.
The shocking conditions of these premises and low educational attainment of pupils has been a constant issue, which the BN government has for decades promised to address, particularly at elections – however, the money has always disappeared.
Development money could have helped these disadvantaged children,
whose plight caused outrage in Sarawak
whose plight caused outrage in Sarawak
The irony will not be lost on these communities that in this case Malaysia’s development cash has been invested in further milking the parents of privileged western children, by the tax evading ‘entrepreneurs’, who stole it together with crony political operators, including Jho Low.
In the name of Plato
Documents, which Sarawak Report has passed on to British crime agencies, clearly show the covert methods used by Mahony and Obaid to privately invest stolen millions in a promising education business in the UK, while avoiding tax.
Managing the operation was Marwan Naja, who had left his position as private equity manager at the Swiss private Pictiet Bank in order to concentrate on his own private investment business Manixer in 2010… an interest he had apparently run in parallel to his official banking role for over a decade.
Same address as PetroSaudi in Geneva
His close links with PetroSaudi are illustrated by the fact that his office for this company resides in the very same building as PetroSaudi’s office at 86 Rue du Rhone in Geneva.
Jho Low went to top private school, Harrow
The connection with the actual investors behind this company Chairman is further emphasised by the fact that Bellevue’s London office is registered at PetroSaudi’s 1 Curzon Street address in Mayfair.
Patrick Mahony is also listed as a Director of Bellevue Group in the UK company records, along with Malley and Marwan Naja.
The documents setting up the private investment deal between Malley, Marwan and PetroSaudi show that Marwan used his former Pictiet Bank as the vehicle for launching the arrangement in Hong Kong.
First the bank set up a Hong Kong company called Mercer & Spring, in which Naja held one share. Then it established a wholly owned Hong Kong subsidiary named Plato One, in which Obaid and Mahony were invited to invest.
British company records show that Plato One is a shareholder of Bellevue Education Group International Limited, which in turn is the owner of Bellevue Education Group.
Bellevue Education Group International Limited – slice of the shares
for Malley but who owns Plato One and Two?
for Malley but who owns Plato One and Two?
Research by Sarawak Report shows that shares in Plato One were offered to Mahony and Maplehill property group at £10 each on the basis Plato would acquire a share of Mr Malley’s company. Maplehill (Obaid) subscribed to around 2/3 of these for £2,650,000 – Mahony took the rest.
The eventual investment in the then Really Great Education Company, at that point 100% owned by Malley, was projected to be £8 million according to the proposal put forward by Naja.
Deal on Plato One 20th September 2010
Emails from Marwan Naja seen by Sarawak Report show that a further £1.5 million was raised less that a week later to invest in the venture.
Email from Marwan Naja to PetroSaudi’s legal team
Hong Kong company records also show that Plato Two, incorporated a year later and now the larger shareholder of Bellevue, also largely belongs to Mahony and Maplehill:
Plato Two – Hong Kong company directory
By the time Plato Two was incorporated in November 2011, the two investors were ready to buy in deeper, investing no less than £15 million in the venture, according to the articles of association of the company and a resolution made at PetroSaudi’s Mayfair Offices. The majority of the money was put in by Tarek’s Maplehill Property (see above).
Another £15 million invested in UK private schools.
There is no doubt as to who the sole shareholder and director of Maplehill was at this time, because he signed a resolution for the company on 11th October 2010 in his capacity as sole director and shareholder, agreeing to the investment in Mark Malley’s eduction company.
However documents and emails from the PetroSaudi database show that the investment was done through the London office of that company using PetroSaudi staff and lawyers.
Tarek Obaid signed as sole director and shareholder in October 2010
These revelations about owners of Bellevue and their stolen cash is likely to spark further concerns over a controversial acquisition by the company of a former state school premises in London, which has been backed by the Department of Education in London, but which campaigners say has taken away potential funds from less privileged state education facilities.
It seems that even in the UK, Mahony and his fellow thieves are using their illegitimate gains to disadvantage less privileged children, in order to make themselves richer.
1MDB SCANDAL: THE PLOT THICKENS..... 3 Apr 2016 7:19 AM (9 years ago)
FROM THE SARAWAK REPORT
Luxembourg Pours Shivering Cold Water Onto Sarawak's Election Campaign Launch
- 1 April 2016
- 11 comments
After months of dithering and of playing hot and cold over his Federal BN masters, the Chief Minister has finally announced that the Sarawak state election will be held at the end of the month – almost the last legally available date.
Adenan did so after a strong show of support for Najib, thereby dismissing the widespread concerns about corruption nationally as well as locally. Nothing has been done to end the Taib family’s control of the economy during Adenan’s period in office, nor the grip of the crony timber and plantation companies.
So, the CM has definitively nailed PBB’s colours to BN’s mast, just as the ship looks ready to sink – it signals a choppy campaign.
Luxembourg prosecutor’s statement deciphered
Within hours of that development, yet more confirmation of the 1MDB corruption scandal started pouring out from international law enforcers.
Amidst a welter of new detail on Najib’s SRC funded credit card spending, Sarawak Report disclosed that the United States has landed an extradition request against the ex-Aabar CEO, Mohamed Al Husseiny, in Abu Dhabi. It marks the first international arrest over 1MDB.
Then Reuters published a devastating new statement by the Luxembourg State Prosecutor, confirming that the state has joined the US, UK, Switzerland, Hong Kong and Singapore in launching a judicial inquiry into money it says was misappropriated from 1MDB and processed through their jurisdiction.
Sarawak Report can decode the messages in that statement, which there is little doubt refers to money laundering already reported in this blog, namely the half billion dollars which passed through an account owned by the former Aabar Chairman, Khadem Al Qubaisi at the Luxembourg branch of Edmond de Rothschild, Banque Privee (BPERE):
Statement from Luxembourg carried by Reuters and reported in UK Daily Mail
The detail in the statement above makes it clear that the Luxembourg authorities are referring to five payments, which Sarawak Report has earlier reported were made into Al Qubaisi’s Vasco Trust account at Edmond de Rothschild Banque Privee (BPERE) in 2012/3, by two BVI companies Blackstone Asia Real Estate Partners Limited and Good Star Limited.
Payments recorded in a statement on Khadem Al Qubaisi’s Vasco
Trust account at BPERE Luxembourg – 4 in 2012 from Blackstone
and 1 in 2013 from Good Star totalling half a billion dollars
Trust account at BPERE Luxembourg – 4 in 2012 from Blackstone
and 1 in 2013 from Good Star totalling half a billion dollars
Sarawak Report has revealed that both these companies (now closed) were owned by Jho Low, whose deputy Seet Li Lin was been registered as the signatory for both.
We have also revealed that it was Good Star Limited, which received much of the money from 1MDB (US$1,03 billion), siphoned out of the early PetroSaudi deals.
And further reported that Blackstone Asia Real Eastate Partners Limited separately paid US$170 million into Najib’s own personal accounts between 2011-12, an allegation corroborated by ABC Australia’s Four Corners programme earlier this week.
Power purchase bond deals
Mystery billionaire – KAQ’s wealth developed in months
The Luxembourg prosecutor’s statement also makes clear where the authorities suspect this money arriving in Khadem’s accounts at BPERE originated from, in that it refers to its suspicion that “sums paid upon the issuance of two bonds in May and October 2012″were misappropriated from off-shore accounts held by the Malaysian government .
The only likely reference is to the two power purchase deals conducted by 1MDB in 2012, which raised US$1.75 billion for the purchase Tanjung Energy in May 2012, followed by another US$1.75 billion for Energy Langat in October 2012.
Both these deals, which were drawn up by Goldman Sachs, are now known to have leaked huge sums of money, thanks to a complicated arrangement involving a ‘co-guarantee’ from the Abu Dhabi Aabar fund, of which Al Qubaisi was Chairman.
1MDB agreed to pay a total of US$2.4 billion for the guarantees on the two bonds, plus for the termination of various options allowed on the deal to Aabar.
However, those payments never arrived at the actual IPIC subsidiary.
Instead, investigations by the Wall Street Journal have established that much of the money went to a similarly named, but privately owned BVI company called Aabar PJS Limited, which Sarawak Report has learnt was incorporated by Khadem Al Qubaisi and his side-kick, Mohamed Al Husseiny – the man now detained in Abu Dhabi.
The money trail begins to emerge
Incorporated in November 2010 Blackstone laundered hundreds of
millions before its closure shortly after the malaysian election
millions before its closure shortly after the malaysian election
Given its statement, Luxembourg has clearly concluded that some of this money was later transferred into Khadem’s BPERE accounts from Blackstone Asia Real Estate Partners.
So, it appears international regulators now believe that the money trail went from Goldman Sachs to Aabar PJS Limited, then to Blackstone Asia Real Estate Partners Limited and finally on to Khadem Al Qubaisi’s personal VASCO Trust account at BPERE.
This is what the Luxembourg statement implies and the dates certainly match.
After all, the Tanjung Energy bond was raised 11th May 2012 and the first whopping US$158 million dollar payment (see above) pitched up in the BPERE account from Blackstone on 29th May 2012. There was another payment in August again from Blackstone.
The 1MDB Energy Langat bond was later raised in October and the next payments were subsequent to that – one from Blackstone to Khadem on 31st October, one in December.
A final US$20 million came in early in 2013 from Good Star, another Jho Low concern,
The danger to Najib
The daily further revelations about these 1MDB money trails mean that the difficulty of the questions facing Najib is escalating by the hour.
This is not least because the companies caught paying money into Khadem’s BPERE accounts, which the regulators are now publicly linking to 1MDB, have also been paying money into Najib’s accounts.
Namely Blackstone Asia Real Estate Partners, which has been cited in a letter from a mysterious Saudi Prince and also an account in the name of Prince Faisal bin Turkey bin Bandar Alsaud:
‘Prince Faisal bin Turkey Bin Bandar AlSaud’, who was revealed
as a sender account to Najib, also sent money to Khadem (above)
in Luxembourg
Yesterday Putrajaya issued a self-crucifying statement, in which it welcomed the publication by ABC Four Corners of a supposed letter from the unidentified ‘prince’, claiming it was a vindication of Najib’s claims that he had received money from a royal Saudi donor.
in Luxembourg
Yesterday Putrajaya issued a self-crucifying statement, in which it welcomed the publication by ABC Four Corners of a supposed letter from the unidentified ‘prince’, claiming it was a vindication of Najib’s claims that he had received money from a royal Saudi donor.
In that letter the ‘prince’ said that some of his future ‘donations’ would come from what he called his company, Blackstone Asia Real Estate Partners Limited. Transfer documents seen by Four Corners further confirm the payments.
This means that the Prime Minister’s Office have now officially acknowledged, on behalf of Najib, that he did receive payments from Blackstone – a company which is now the subject of money-laundering investigations by the Luxembourg authorities, specifically on the suspicion that it was handling money misappropriated from 1MDB.
Oh dear.
MALAYS MUST RECLAIM THEIR MALAYNESS AND THEIR MALAY CULTURE FROM BEING ARABISED. 3 Apr 2016 6:57 AM (9 years ago)
The Arabisation of the Malays, which promotes divisiveness and intolerance, has not gone unnoticed. That is why the "titah" of the Sultan of Johore, was a welcome speech for Malaysians, especially the silent Malay majority.
Clearly worried by the erosion of Malay culture, the Sultan warned Malays not to abandon their own traditions and culture, in exchange for Arabisation.
The Sultan was annoyed that the traditional Malay "Hari Raya Puasa" greeting had been cast aside and the Arabic "Eid al-Fitr", used instead. He said that Malays no longer "buka puasa" but performed "iftar", to break the fast, during Ramadan.
The Johore ruler criticised the Public Works Department (PWD) for preaching religion, instead of focusing on their responsibilities of repairing roads and other civil engineering duties. He was commenting on the Batu Pahat PWD notice, warning women to cover their hair, lest they be punished in the after- life.
Conscious of the importance of reaching out to all his citizens, as a Sultan, he dismissed as petty jealousy, the criticisms of a band of people who had blown-up the insignificant matter, of the crown prince shaking hands with a woman.
He urged Malays not to forget their own culture and the practice of "salam", the traditional greeting of the Malays.
He said that he was born a Malay, and is proud to uphold the Malay culture. He suggested that the Malays, who are keen on being mock Arabs, should live in Saudi Arabia.
Few realise that the Arabisation of Malaysia has its roots in a number of sources.
One of these routes is via Saudi Arabian petro-dollars. Saudi Arabia throws money into charities, mosques and madrassahs, around the world, especially in Southeast Asia.
Money acts like a drug, and even religious institutions cannot have enough of it. The Saudis wormed their way into government policy, much like the recent RM2.6 billion donation, which was used to influence GE13. Jakim may deny this, but Malaysians know that the Saudis export a strict brand of Islam, which has no place in multi-cultural Malaysia.
The Dakwah (missionary) movement took off in the late 1970s, in the run-up to the Iranian revolution of 1979. The Dakwahs sought to apply economic and social justice under Islam. They spread by word of mouth, and networks formed via discussion groups, prayer activities and peer pressure.
With the Islamic revival of the 1980s, former PM Dr Mahathir Mohamad knew that PAS was a serious contender for Malay votes. He had to make Umno more religious. Anwar Ibrahim, a charismatic and influential student leader, of the Islamic movement ABIM, caught Mahathir's eye.
In 1982, Anwar was invited into government, and then he and Mahathir, sought to create a more Islamic Umno to rival PAS.
The other contributory factor in Arabisation was the return of Malaysian students, sent to the Middle East to study. They started to implement many of the ideas and ways of life, to which they had been exposed in the Middle East.
Arabisation is an unnecessary scourge on multi-cultural Malaysia. Adopting Arab dress, speech, practices and architecture, divide us further. It is not just Malay against non-Malay, or Muslim against non-Muslim.
The strict form of Islam which accompanies the Arabisation of Malay culture, pits conservative Malays against secular and liberal Malays, pits conservative Muslims against Sunnis, Muslims of other Islamic sects, and also non-Muslims.
Today, Muslim women think that wearing a tudung is optional.
In a few years’ time, Malay women may not be allowed out of the house, unless accompanied by a male relative. Perhaps, Malay women will not be allowed to drive.
Already, some politicians are suggesting that some people should be whipped in public. How much more Arabisation do we need?
Today, those who are behind the Arabisation of Malaysia, work on your mind.
In future, Arabisation will lead to further controls on your physical freedom. It happened in Afghanisatan and Pakistan. What makes you think it will not happen here?
- MARIAM MOKHTAR
%20for%20preaching%20religion,%20instead%20of%20focusing%20on%20their%20responsibilities%20of%20repairing%20roads%20and%20other%20civil%20engineering%20duties.%20He%20was%20commenting%20on%20the%20Batu%20Pahat%20PWD%20notice,%20warning%20women%20to%20cover%20their%20hair,%20lest%20they%20be%20punished%20in%20the%20after-%20life.%3C/span%3E%3C/div%3E%0A%3Cdiv%3E%0A%3Cspan%3EConscious%20of%20the%20importance%20of%20reaching%20out%20to%20all%20his%20citizens,%20as%20a%20Sultan,%20he%20dismissed%20as%20petty%20jealousy,%20the%20criticisms%20of%20a%20band%20of%20people%20who%20had%20blown-up%20the%20insignificant%20matter,%20of%20the%20crown%20prince%20shaking%20hands%20with%20a%20woman.%26nbsp;%3C/span%3E%3C/div%3E%0A%3Cdiv%3E%0A%3Cspan%3EHe%20urged%20Malays%20not%20to%20forget%20their%20own%20culture%20and%20the%20practice%20of%20%22salam%22,%20the%20traditional%20greeting%20of%20the%20Malays.%3C/span%3E%3C/div%3E%0A%3Cdiv%3E%0A%3Cspan%3EHe%20said%20that%20he%20was%20born%20a%20Malay,%20and%20is%20proud%20to%20uphold%20the%20Malay%20culture.%20He%20suggested%20that%20the%20Malays,%20who%20are%20keen%20on%20being%20mock%20Arabs,%20should%20live%20in%20Saudi%20Arabia.%3C/span%3E%3C/div%3E%0A%3Cdiv%3E%0A%3Cspan%3EFew%20realise%20that%20the%20Arabisation%20of%20Malaysia%20has%20its%20roots%20in%20a%20number%20of%20sources.%26nbsp;%3C/span%3E%3C/div%3E%0A%3Cdiv%3E%0A%3Cspan%3EOne%20of%20these%20routes%20is%20via%20Saudi%20Arabian%20petro-dollars.%20Saudi%20Arabia%20throws%20money%20into%20charities,%20mosques%20and%20madrassahs,%20around%20the%20world,%20especially%20in%20Southeast%20Asia.%26nbsp;%3C/span%3E%3C/div%3E%0A%3Cdiv%3E%0A%3Cspan%3EMoney%20acts%20like%20a%20drug,%20and%20even%20religious%20institutions%20cannot%20have%20enough%20of%20it.%20The%20Saudis%20wormed%20their%20way%20into%20government%20policy,%20much%20like%20the%20recent%20RM2.6%20billion%20donation,%20which%20was%20used%20to%20influence%20GE13.%20Jakim%20may%20deny%20this,%20but%20Malaysians%20know%20that%20the%20Saudis%20export%20a%20strict%20brand%20of%20Islam,%20which%20has%20no%20place%20in%20multi-cultural%20Malaysia.%26nbsp;%3C/span%3E%3C/div%3E%0A%3Cdiv%3E%0A%3Cspan%3EThe%20Dakwah%20(missionary)%20movement%20took%20off%20in%20the%20late%201970s,%20in%20the%20run-up%20to%20the%20Iranian%20revolution%20of%201979.%20The%20Dakwahs%20sought%20to%20apply%20economic%20and%20social%20justice%20under%20Islam.%20They%20spread%20by%20word%20of%20mouth,%20and%20networks%20formed%20via%20discussion%20groups,%20prayer%20activities%20and%20peer%20pressure.%3C/span%3E%3C/div%3E%0A%3Cdiv%3E%0A%3Cspan%3EWith%20the%20Islamic%20revival%20of%20the%201980s,%20former%20PM%20Dr%20Mahathir%20Mohamad%20knew%20that%20PAS%20was%20a%20serious%20contender%20for%20Malay%20votes.%20He%20had%20to%20make%20Umno%20more%20religious.%20Anwar%20Ibrahim,%20a%20charismatic%20and%20influential%20student%20leader,%20of%20the%20Islamic%20movement%20ABIM,%20caught%20Mahathir's%20eye.%26nbsp;%26nbsp;%3C/span%3E%3C/div%3E%0A%3Cdiv%3E%0A%3Cspan%3EIn%201982,%20Anwar%20was%20invited%20into%20government,%20and%20then%20he%20and%20Mahathir,%20sought%20to%20create%20a%20more%20Islamic%20Umno%20to%20rival%20PAS.%26nbsp;%3C/span%3E%3C/div%3E%0A%3Cdiv%3E%0A%3Cspan%3EThe%20other%20contributory%20factor%20in%20Arabisation%20was%20the%20return%20of%20Malaysian%20students,%20sent%20to%20the%20Middle%20East%20to%20study.%20They%20started%20to%20implement%20many%20of%20the%20ideas%20and%20ways%20of%20life,%20to%20which%20they%20had%20been%20exposed%20in%20the%20Middle%20East.%26nbsp;%26nbsp;%3C/span%3E%3C/div%3E%0A%3Cdiv%3E%0A%3Cspan%3EArabisation%20is%20an%20unnecessary%20scourge%20on%20multi-cultural%20Malaysia.%20Adopting%20Arab%20dress,%20speech,%20practices%20and%20architecture,%20divide%20us%20further.%20It%20is%20not%20just%20Malay%20against%20non-Malay,%20or%20Muslim%20against%20non-Muslim.%26nbsp;%3C/span%3E%3C/div%3E%0A%3Cdiv%3E%0A%3Cspan%3EThe%20strict%20form%20of%20Islam%20which%20accompanies%20the%20Arabisation%20of%20Malay%20culture,%20pits%20conservative%20Malays%20against%20secular%20and%20liberal%20Malays,%20pits%20conservative%20Muslims%20against%20Sunnis,%20Muslims%20of%20other%20Islamic%20sects,%20and%20also%20non-Muslims.%26nbsp;%26nbsp;%3C/span%3E%3C/div%3E%0A%3Cdiv%3E%0A%3Cspan%3EToday,%20Muslim%20women%20think%20that%20wearing%20a%20tudung%20is%20optional.%26nbsp;%3C/span%3E%3C/div%3E%0A%3Cdiv%3E%0A%3Cspan%3EIn%20a%20few%20years%E2%80%99%20time,%20Malay%20women%20may%20not%20be%20allowed%20out%20of%20the%20house,%20unless%20accompanied%20by%20a%20male%20relative.%20Perhaps,%20Malay%20women%20will%20not%20be%20allowed%20to%20drive.%26nbsp;%3C/span%3E%3C/div%3E%0A%3Cdiv%3E%0A%3Cspan%3EAlready,%20some%20politicians%20are%20suggesting%20that%20some%20people%20should%20be%20whipped%20in%20public.%20How%20much%20more%20Arabisation%20do%20we%20need?%3C/span%3E%3C/div%3E%0A%3Cdiv%3E%0A%3Cspan%3EToday,%20those%20who%20are%20behind%20the%20Arabisation%20of%20Malaysia,%20work%20on%20your%20mind.%26nbsp;%3C/span%3E%3C/div%3E%0A%3Cdiv%3E%0A%3Cspan%3EIn%20future,%20Arabisation%20will%20lead%20to%20further%20controls%20on%20your%20physical%20freedom.%20It%20happened%20in%20Afghanisatan%20and%20Pakistan.%20What%20makes%20you%20think%20it%20will%20not%20happen%20here?%3C/span%3E%3C/div%3E%0A%3Cspan%3E%3Cspan%3E%26nbsp;-%20MARIAM%20MOKHTAR%3C/span%3E%3C/span%3E)
1MDB SCANDAL: WHAT THE LUXEMBOURG PROBE WILL UNCOVER 3 Apr 2016 6:09 AM (9 years ago)
FROM MALAYSIAKINI
Malaysians may be wondering why a tiny European country is joining the growing global investigation into 1MDB, but the outcome of the Luxembourg probe could have great bearing on Prime Minister Najib Abdul Razak.
To begin with, the Luxembourg investigation does not indicate that it has anything to do with Najib.
But the Luxembourg probe is significant as it may solve an important missing link - the connection between 1MDB and a number of entities which have generously pumped billions of ringgit, claimed to be donations, into Najib's personal bank accounts.
ABC News on Tuesday, citing Najib's bank records, revealed that US$1.051 billion (RM4.2 billion) in the prime minister's personal accounts originated from entities such as Saudi Arabia's Ministry of Finance, Prince Faisal bin Turkey bin Bandar Alsaud, Tanore Finance (BVI) and Blackstone Asia Real Estate Partners Ltd (BVI).
The Prime Minister's Office claimed the Saudi entities are proof of what Najib had always asserted - that the money was a Saudi donation and any links to 1MDB is wrong.
So how is this related to the Luxembourg investigation?
The Wall Street Journal today reported that the Luxembourg unit of Banque Privee Edmond De Rothschild Group, which manages funds for wealthy clients, confirmed it was cooperating with the country's investigators who are determining whether 1MDB's funds flowed into the private bank.
However, even before the Luxembourg authorities made public their investigation, Sarawak Report had in January zoomed in on Banque Privee Edmond De Rothschild.
In particular, the whistleblower portal released documents showing that Khadem Al-Qubaisi's Luxembourg account at Banque Privee Edmond De Rotschilde, held under the name of ‘The Vasco Trust’, received US$472.75 billion (RM1.84 billion) in deposits between May 29, 2012 and Dec 4, 2012.
The money originated from Blackstone Asia Real Estate Partners Ltd (BVI), the same offshore company which had pumped at least US$120 million (RM480 million) into Najib's personal bank accounts between Jan 3, 2012 and May 23, 2012.
Khadem was formerly the chairperson of Aabar Investments PJS, the subsidiary of Abu Dhabi sovereign wealth fund International Petroleum Investment Company (IPIC), of which he was also managing director. Both entities have business dealings with 1MDB.
Five transactions
The Luxembourg probe is believed to be centred around Khadem's account in Banque Privee Edmond De Rotschilde.
This was based on the fact that the Luxembourg state prosecutor's statement said investigators "aim to trace the origin of four transfers in 2012" which corroborates with the four transactions first highlighted by Sarawak Report in January.
The four transactions Khadem received from Blackstone Asia Real Estate Partners Limited (BVI) over a seven-month period began with a US$158 million deposit on May 29, 2012 and subsequently another US$100.75 million, US$129 million and US$85 million were transferred on Aug 3, Oct 31 and Dec 4 respectively, totalling US$472.75 million.
The Luxembourg state prosecutor's statement added that investigators were also tracing the origin of another transaction in 2013, which appeared to refer to a US$20.75 million deposit Khadem received on Feb 2 that year from Good Star Limited, also highlighted by the whistleblower portal in January.
Good Star Limited was controlled by Najib's associate and Penang-born billionaire Jho Low. The company was accused of siphoning off US$1.030 billion from 1MDB's joint-venture with PetroSaudi International, but 1MDB had insisted all its funds in the deal was accounted for.
As the Luxembourg investigation will look into whether 1MDB's fund flowed into Khadem's Banque Privee Edmond De Rotschilde account, it would mean establishing the source of Blackstone Asia Real Estate Partners Limited (BVI) and Good Star Limited's funds which were responsible for the five deposits.
Ultimately, determining whether Blackstone Asia Real Estate Partners Limited's (BVI) got the funds it sent to Khadem from 1MDB, or not, will have a bearing on Najib. In other words, it would be a test on Najib's assertion that the multi-billion ringgit deposits he received had always been a donation and is not linked to 1MDB.
And as for Good Star Limited, the facts established by the Luxembourg investigation will also help shed light if 1MDB was truthful that its aborted joint-venture with PetroSaudi International was above board or whether allegations that US$1.030 billion of 1MDB's funds was siphoned by the company held merits.
Sarawak Report in an article today also noted that the Luxembourg state prosecutor's statement said its investigation of the five transactions is in the context of the issuance of two bonds in May and October 2012.
The timeline corresponds with the two bonds of US$1.75 billion each, totalling US$3 billion, which 1MDB had raised to acquire power assets.
These were the same bonds which Goldman Sachs underwrote and charge over US$300 million, or a staggering 10 percent, and which is now under investigation in the US.
The UAE investigation
But the Luxembourg probe, in the context of the bonds, has more to do with yet another investigation on 1MDB taking place in the United Arab Emirates (UAE).
In September last year, The Wall Street Journal reported that US$2.4 billion 1MDB was supposedly to pay to Aabar Investments PJS, the subsidiary of Abu Dhabi's IPIC, never arrived.
The money 1MDB had to pay were the conditions set out in exchange for IPIC guaranteeing the US$3.5 billion bonds the Malaysian sovereign wealth fund it was raising.
Under the deal with IPIC, 1MDB would allow the Abu Dhabi sovereign wealth fund to keep US$1.4 billion of its US$3.5 billion bonds as security deposit.
1MDB would also give IPIC's subsidiary Aabar Investments PJS a 49 percent option to subscribe to the former's power assets subsidiaries, which 1MDB later terminated for around US$1 billion.
But the Abu Dhabi sovereign wealth fund never received the total of US$2.4 billion, so where did the money go?
The Wall Street Journal in December reported that at least US$850 million of this money was paid to Aabar PJS Ltd, registered in the British Virgin Islands (BVI), which carried a similar name to IPIC's subsidiary.
This company, though having a similar name to IPIC's subsidiary Aabar Investments PJS, was not owned by IPIC. Instead, it was incorporated by Khadem and Mohammed Al-Husseiny, who was also the chief executive officer of the "real" Aabar and have since been removed, according to Sarawak Report.
The whistleblower portal speculated that the Aabar PJS Ltd (BVI) may be linked to Blackstone Asia Real Estate Partners Ltd (BVI), in the context of the Luxembourg authorities probing the 1MDB bonds and Khadem's Banque Privee Edmond De Rothschild account.
If the Luxembourg authorities do establish such a link, then the 'donation' saga may prove to be more than just a 'donation' and may well pile pressure on the Malaysian attorney-general to reopen the case.