How US$700 million was allegedly siphoned off 1MDB via ‘loan’ for a few days!

Businessman Jho Low orchestrated the 2009 joint venture between 1Malaysia Development Berhad (1MDB) and PetroSaudi International to allegedly siphon off US$700 million from the strategic development fund, whistleblower website Sarawak Report has claimed.

The UK-based website revealed that the 1MDB PetroSaudi joint venture company’s US$700 million loan repayment to PetroSaudi in 2009 was a front and the funds channelled to a firm allegedly owned by Low, called Good Star Limited.

The US$700 million loan repayment provision was part of the joint venture contract between Petro Saudi International and 1MDB, Sarawak Report said, citing documents it had obtained. It also published those documents with its report.

“What that evidence goes on to show is that critical manoeuvres for transferring the USD$700 million ‘loan’ cum ‘premium’ into the control of Jho Low took place straight after the signing of the agreement (between PetroSaudi and 1MDB) on September 29 – that and Jho Low was involved and copied in on every step,” Sarawak Report said.

According to copies of the PetroSaudi loan agreement obtained by Sarawak Report, the US$700 million had been loaned from PetroSaudi Caymans Holdings to the 1MDB PetroSaudi joint venture company on September 25, 2009.

“However, there is no evidence to suggest that this ‘loan’ was anything apart from an entirely contrived transaction between two arms of PetroSaudi, a company with very little working capital.

“Three days later, 1MDB was committed to pay it back in hard currency,” it said.

On September 29, 2009, PetroSaudi CEO Tarek Obaid issued a letter of demand to 1MDB PetroSaudi Limited for US$700 million be credited to account number 11116073, at RBS Coutts Bank Ltd in Zurich, Switzerland.

Sarawak Report claimed that the account was registered under a company called Good Star Limited, which was controlled by Low.

“This means that the money, which was stated as having been paid back to PetroSaudi as part of the joint venture agreement, was in fact signed over by Tarek Obaid to an entirely separate third party, Good Star Limited.”

It added that the US$700 million was repaid by 1MDB alone, as PetroSaudi had brought in “zero cash” into the joint venture and had only committed the valuation of its assets.

Good Star then paid Tarek Obraid a “broker fee of US$85 million” on the same day the letter of demand was written, it said.

Sarawak Report claimed that the entire 1MDB-PetroSaudi joint venture deal had been initiated by Low and his team on September 8, 2009 – less than a month before the deal was signed.

Those involved in the initial meeting were Low, UK businessman Patrick Mahony, and Low’s colleagues Seet Li Lin and lawyer Tiffany Heah.

Mahoney worked for an investment group called Ashmore, which was funding PetroSaudi’s omain operation, while Seet is the chief investment Officer of Good Star Limited, and the vice-president of Low’s company Jynwel Capital, said Sarawak Report.

The website said it managed to contact Seet to ask about his role at Good Star, but he denied knowing anything and then “turned off his phone”.

In an email transaction between Low and Mahony, the latter said he understood Low wanted “to use PetroSaudi International as a front for certain deals” and that “we would be happy to do that”.

Sarawak Report said 1MDB’s CEO, Shahrol Halmi, and his Malaysian colleagues were only involved in the proceedings in September 15, on the initiative of Low, who organised the conference call between the parties.

The website also furnished an email, purportedly written by Shahrol, which it said showed that 1MDB was still in the dark about the actual business of PetroSaudi International, as Shahrol had yet to receive the company’s profile days before signing the joint venture.

On February 21, 2015, 1MDB claimed that its joint venture with PetroSaudi had earned it a profit of US$488 million.

In a statement on the company’s website, 1MDB president Arul Kanda Kandasamy also claimed that the money it had invested in the venture had been converted into Murabaha notes when the plan did not go through.

“In 2009, 1MDB entered into a joint venture with PetroSaudi, which was set up to undertake investments in certain projects.

“Both parties eventually decided not to proceed with the joint venture and our investment was converted into Murabaha notes.

“These Murabaha notes were paid back in full, with 1MDB earning a profit of US$488 million, in 2013,” Arul said in the statement. – March 1, 2015.

…source
Jho Low allegedly siphoned off US$700 million from 1MDB, says website
1 March 2015 – Malaysian Insider

Advertisements
Post a comment or leave a trackback: Trackback URL.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: