Reproduced with permission
Playing Games With Names — Jho Low’s Modus Operandi
The
Auditor General, who is known for his upright approach, is going to
have a hard time re-setting a date for the publication of his report
into 1MDB — due today, but postponed till further notice.
Like
the Attorney General, Deputy Prime Minister, Head of the Public
Accounts Committee, Vice President for UMNO, Special Branch Chief and
shortly the Head of the Central Bank, he may find himself replaced
first. At least he is still alive, unlike the investigator from the MACC
into this dirty business, Kevin Morais
.
Today’s report
in the Wall Street Journal shows that 1MDB paid a total of US$850
million into a bogus off-shore company, using the name of the Abu Dhabi
fund Aabar, Aabar Investments PJS Ltd.
It follows on from our own expose
earlier this week detailing that, contrary to claims by 1MDB, the
Seychelles company Good Star Limited belongs entirely to Jho Low, which
confirms that the Prime Minister’s nominee was running 1MDB’s operations
and indeed running off with a great deal of the money.
The
revelation also confirms a pattern that has provided unmistakable
evidence of a ‘modus operandi’ by the youthful Official Advisor to 1MDB,
which was the title given to Low. We can point to numerous transactions
involving Jho Low and his nightclubbing friend, Aabar’s Khadam Al
Qubaisi, which essentially consist of playing games with names to give
the impression that shadowy off-shore companies were some sort of
subsidiary of major concerns.
These companies have all turned out to be linked to suspicious losses of money from 1MDB.
PetroSaudi International Limited (Seychelles)
Take
PetroSaudi International Limited, Seychelles, which was positioned as a
subsidiary to PetroSaudi Holdings Limited (Cayman) which was involved
in the joint venture with 1MDB. In fact (after considerable to-ing and
fro-ing about how to set up the arrangement) it was a company totally
controlled by Jho Low through an investment management deal with one of
his own off-shore companies Panama Investment Manager, which gave him
control over all its money.
Tarek
Obaid had agreed to act as the Director of PetroSaudi International,
but in a personal capacity, not linked to the main joint venture partner
as alleged.
During
its buy out of UBG, orchestrated by Jho Low, who had a major personal
stake in the company, there was much concern expressed by AmBank
officials negotiating the deal about who exactly did own this supposed
off-shoot of PetroSaudi (which had received the money used to buy UBG
from 1MDB).
They
were told that the shady nature of the ownership was owning to the need
to conceal the private interest of the King of Saudi Arabia in the
deal! They accepted the excuse, which was a lie.
SRC Global
In
2013 the Aabar owned Spanish oil giant CEPSA purchased the Canadian
company Coastal Energy for US$2.3 billion, in a deal masterminded of
course by their boss the then all-powerful Chairman Khadem Al Qubaisi.
Strangely,
he did the deal in tandem with a private company owned by none other
than Jho Low, which took an option on the sale in its alleged role as
‘facilitator’. That company of Jho Low’s went by the name of Strategic Resources Global.
The details of SRG’s involvement have yet to be published, however
insiders have intimated that the point of the option was that it could
then be valuably sold back to CEPSA.
Given
Low’s established history of using 1MDB money as backing for other
private deals forged together with his pal Khadem from Aabar (see our
exposes on the London Hotel bids of 2011) there can only be questions asked as to the strikingly similar name of the 1MDB subsidiary SRC International Sdn Bhd.
The
shadowy nature of SRC International has caused constant comment in
Malaysia, set up as it was with RM4 billion borrowed from the public
pension fund KWAP, which has never been properly accounted for. One of
its known ventures however (through a BVI vehicle naturally) was a joint
venture with none other than that sturdy business partner Aabar and
KAQ, named none other than Aabar-SRC Strategic Resources Ltd.
Was
name play once again at work as money flushed through these off-shore
concerns with such similar names and confusion of cross-ownerships? Did,
by any chance, money flow in this fashion from the pension fund through
1MDB and its joint ventures with Aabar and into a private deal between
Jho Low and Khadem?
We
cannot know, because when questioned on these matters, the Finance
Minister (cum Prime Minister, cum sole shareholder of 1MDB) hived SRC
off from 1MDB and put it under his own Ministry of Finance portfolio,
from where he has refused to release transparent accounts ever since.
The public money remains unaccounted for!
Merryl Capital
Move on to what the Australian newspaper
describes as the mysterious off-shore company Merryl Capital, which was
stuck right in the middle of the unravelling scandal in Australia over
the finance company Bridge Global, which Najib (doubtless on the advice
of 1MDB’s advisor Jho Low) used to invest the alleged profits (obtained
not in cash, but in ‘promissory notes’ mind you) made from the
PetroSaudi deal, from which Good Star had siphoned most of 1MDB’s
original investment.
As the Australian points out, despite its name, this entity has nothing to do with the more famous Merryl Lynch.
Bridge Partners didn’t pay in cash but in promissory notes — IOUs — which 1MDB then invested in Bridge Global Absolute Return. According to Bridge Global’s prospectus, Bridge Global Absolute Return is managed by Hanhong, a Hong Kong securities company in which it planned to buy a half stake.
Bridge Global Absolute Return owns almost 10 per cent of Bridge Global, making it the company’s second-biggest shareholder behind another mysterious offshore entity, Merrill Capital, which owns 10.2 per cent.
Despite its name, Merrill Capital appears not to be linked to Merrill Lynch, according to Mr Childs’ affidavit. It is instead a UAE company associated with Mr Goh that owns some 8.5 per cent of Avestra.
To cover the Petrosaudi hole, it’s alleged that in 2012 1MDB signed a deal with Abu Dhabi’s International Petroleum Investment Corporation under which IPIC guaranteed $US3.5bn of bonds issued by 1MDB.
Aabar Investments PJS Ltd
So,
it looks like we have an established modus operandi indeed when it
comes to the way Jho Low played David Copperfield conjuring tricks with
1MDB’s money, as it slipped away from the public fund that was being
administered by his boss the PM, and into companies with names designed
to make them sound like a more reputable outfit linked to established
1MDB deals.
The
latest revelation that US$850 million was likewise transferred to Aabar
Investments PJS Ltd by 1MDB thus follows an established pattern. The
WSJ have reported that Aabar has confirmed that this off-shore BVI
entity, which was opened to take the money and then closed down agains
shortly after, has nothing to do with their own group.
Abu
Dhabi have, of course, long since sacked Khadem Al Qubaisi, after all
these irregularities came to light at the start of the year. Yet,
Malaysia’s PM continues to defend 1MDB and Jho Low and he is obstructing
vigorously the attempts to investigate what went wrong with all that
missing money.
Other
off-shore companies with surprisingly similar names to more reputable
firms doubtless wait to be discovered and the 1MDB scandal continues to
inevitably unravel in the face of the international investigations
underway.
READ the full story by Wall Street Journal below:
People passing a 1Malaysia Development Bhd. billboard in Kuala Lumpur, Malaysia, in March. PHOTO: REUTERS
Malaysia’s 1MDB Sent $850 Million to Entity Set Up to Appear Owned by Abu Dhabi Wealth Fund
A
troubled Malaysian state investment fund sent at least $850 million
last year to an offshore entity set up to appear that it was owned by an
Abu Dhabi sovereign-wealth fund, a transfer which deepens the mystery
over billions of dollars that are unaccounted for, according to
documents reviewed by The Wall Street Journal and people familiar with
the matter.
The
1Malaysia Development Bhd. fund, or 1MDB, set up by Malaysian Prime
Minister Najib Razak in 2009 to promote economic development, is under investigation
in at least six countries over a broad array of allegations that money
was siphoned off for political spending and for personal gain.
One
focus of investigation is $2.4 billion in payments that 1MDB said it
made to a unit of Abu Dhabi’s International Petroleum Investment Co., or
IPIC, as part of a deal involving the Malaysian fund’s purchase of
power plants. The Journal reported in September that IPIC officials had concluded they did not receive the money, according to people familiar with the matter.
A
1MDB unit transferred at least $850 million via three transactions last
year to a British Virgin Islands-registered company with a name that
made it look like it was controlled by IPIC, according to wire transfer
documents viewed by the Journal and two people familiar with the matter.
The
1MDB fund sent the money to “Aabar Investments PJS Ltd.” which closely
resembles the name of IPIC’s wholly owned subsidiary Aabar Investments
PJS, the wire documents show.
Aabar,
the IPIC subsidiary, is an Abu Dhabi-registered company that holds
prominent investments in the space tourism venture Virgin Galactic and a
5.1% stake in UniCredit SpA, Italy’s biggest bank.
Executives
at IPIC and Aabar investigating the transfers have concluded neither of
the two Abu Dhabi funds ever owned or controlled the British Virgin
Islands company, according to the people familiar with the matter.
Records in the British Virgin Islands don’t give any details on the
owners or directors of the company.
The
records show the British Virgin Islands firm was incorporated on March
14, 2012, and liquidated on June 23 this year, a time of growing
criticism of 1MDB from opposition politicians and within Mr. Najib’s
ruling party.
The
1MDB fund, in a statement to the Journal after publication of this
article, did not reply to questions previously submitted about the
transfers. The statement said “that the Wall Street Journal continues
its campaign to malign 1MDB.” The fund also said it was cooperating with
investigators. 1MDB in the past has said it stands by its financial
statements, which show it made the payments to the Abu Dhabi fund.
An
IPIC spokesman did not respond to questions. The Abu Dhabi fund hasn’t
made any public statements about its relationship with 1MDB or the
missing money.
Mr.
Najib promised the fund would spur economic development by investing in
new industries like renewable energy. But it has only bought existing
power plants and land, while rolling up over $11 billion in debt that it is struggling to repay.
The
transfers involving Abu Dhabi are among a series of transactions by
1MDB that are the focus of investigations. In Malaysia, the fund is
being probed by the auditor general, the nation’s anticorruption body,
the central bank and a parliamentary committee.
In
2012, 1MDB issued $3.5 billion in bonds to fund the purchase of power
plants in Malaysia and overseas. The Abu Dhabi fund guaranteed the
bonds.
The
1MDB fund’s publicly-available financial statements for the year ending
March 31, 2013, show it paid $1.4 billion to IPIC’s unit Aabar as
collateral for guaranteeing the bonds. The Malaysian fund said it paid
another $993 million to Aabar in 2014 to cancel options granted to IPIC
to buy a stake in 1MDB’s power assets, according to a copy of a draft
report into 1MDB by Malaysia’s auditor general and 1MDB board minutes
reviewed by the Journal.
Officials
at IPIC say neither they nor any subsidiary received this money, the
Journal reported. It is not clear why the payments were made to Aabar
since IPIC made the guarantee.
IPIC’s
consolidated financial statements, which include Aabar, make no
reference to the collateral payment. A footnote in the 2014 statements
said that as of the end of that year 1MDB owed IPIC $481.3 million in
outstanding payments for the options.
No
substantial amount of money was received by IPIC, the people familiar
with the matter said. It isn’t clear how IPIC arrived at the $481.3
million figure and whether it relates to the $993 million transfer 1MDB
says it made to IPIC as partial payment to cancel the options.
IPIC’s
former managing director, Khadem Al Qubaisi, was dismissed in April by a
presidential decree. The new management team of IPIC has been
scrutinizing Mr. Al Qubaisi’s activity at the fund, according to the
people familiar with the matter.
The latest twist in the 1MDB saga comes as Mr. Najib battles a separate scandal linked to the fund. Malaysian investigators said earlier this year
that nearly $700 million was transferred into his personal bank
accounts through entities linked to 1MDB, including a private Swiss bank
owned by IPIC.
The
source of the funds was unclear and the government investigation didn’t
detail what happened to the money that allegedly went into Mr. Najib’s
accounts.
Malaysia’s anticorruption body in August said the funds were a donation from the Middle East. The donor wasn’t specified.
Mr.
Najib has denied wrongdoing and said he didn’t use any money for
personal gain. He said this month that using money from a donor was
appropriate and legal.
As well as Malaysia and Abu Dhabi, authorities in the U.S., Switzerland, Singapore, and Hong Kong are looking at 1MDB’s activities.
— Nicolas Parasie and Yantoultra Ngui contributed to this article.
Write to Bradley Hope at [email protected]
Originally published at www.sarawakreport.org.
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