Malaysia’s 1MDB Fund Says It May Be Victim of $3.5 Billion Fraud

Shamim Adam
April 13, 2016

1Malaysia Development Bhd., the troubled Malaysian state fund that’s the subject of global investigations, said it could be a victim of fraud if payments of $3.5 billion intended for an Abu Dhabi sovereign wealth fund never made it there.

Abu Dhabi’s International Petroleum Investment Co. this week denied ownership of a company that received the funds known as Aabar Investments PJS Limited or Aabar BVI. Swiss authorities said on Tuesday they are investigating two former public officials from the United Arab Emirates, who handled Abu Dhabi sovereign wealth funds that guaranteed 1MDB bonds.

“Given the recent denial by IPIC and the announcement by the Office of the Attorney-General of Switzerland, indicating that 1MDB could be a victim of fraud, 1MDB is exploring all avenues open to us,” the company said in a statement on Wednesday.

Authorities from the U.S. to Switzerland and Singapore are trying to determine if some of the billions of dollars that 1MDB raised were siphoned out inappropriately. 1MDB, whose advisory board is headed by Prime Minister Najib Razak, amassed more than 50 billion ringgit ($12.9 billion) of debt over six years, using some of it to buy energy assets, including joint ventures with companies in Saudi Arabia and Abu Dhabi.

Questionable Transactions

A report by a Malaysian parliamentary committee last week identified at least $4.2 billion of questionable transactions by 1MDB including those that involved the Abu Dhabi companies. The bipartisan group said it couldn’t verify a $2.1 billion payment to Aabar Investments PJS Ltd., while another $1.37 billion was sent to the company without the approval of 1MDB’s board.

IPIC has a unit that goes by the name of Aabar Investments PJS, without the Ltd. contained in the company that 1MDB transferred money to. 1MDB said it negotiated “various legal agreements” with the previous heads of IPIC and Aabar and called it a “surprising claim” that neither of the Gulf companies knew of payments to Aabar BVI.

“1MDB is confident of its legal position in relation to the $3.5 billion cash deposits paid to Aabar BVI,” the Malaysian fund said in a separate statement on Tuesday.

  1. #1 by Bigjoe on Thursday, 14 April 2016 - 6:10 am

    The first news about Aabar was at least 8 or 10 months ago. Now Arul Kanda says it MAYBE, just MAYBE fraud. All that time they did not chase down the issue but kept insisting nothing wrong and now they give excuses? They are not victim but accesories and associates to the crime AND Najib is proven even worst at his job for the lamest excuses he uses.

  2. #2 by yhsiew on Thursday, 14 April 2016 - 8:09 am

    1MDB’s claim that it is a victim of the $3.5 billion fraud will certainly intensify global investigations on 1MDB.

  3. #3 by drngsc on Thursday, 14 April 2016 - 8:27 pm

    We do not believe you anymore Arul. You have lied so often that you no longer have any credibility. If you really feel that you have been cheated, please go an lodge a Police report and let them investigate, or sue the guilty party. They are all your bed fellows once upon a time. We all feel strongly that this whole 1MDB saga is part of a show ” How to steal from your country?”. Your boss is guilty as hell.

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