IFR Asia 989
April 29, 2017

The 1MDB saga reached a predictable and sickening milestone last Monday when the Malaysian investment fund said it had reached an out-of-court settlement with the Middle Eastern guarantor of two US dollar bonds totalling US$3.5bn.

1MDB’s agreement with Abu Dhabi’s International Petroleum Investment Company was predictable, inasmuch as the Malaysian taxpayer will ultimately be on the hook for the fund’s debts, and sickening inasmuch as it left billions of dollars still unaccounted for.

1MDB maintains that it paid US$3.5bn to an IPIC unit, Aabar Investments PJS Limited, in return for IPIC acting as guarantor on the US dollar bonds. IPIC claims that money went to an unconnected company registered in the British Virgin Islands with an uncannily similar name.

IPIC denied last week that Aabar (BVI) was its subsidiary. But Malaysia’s second finance minister Johari Abdul Ghani last week in somewhat desperate fashion, proffered a letter from the Registrar of Corporate Affairs of the British Virgin Islands confirming that it is (or was).

Can the world of international high finance be reduced to something as utterly farcical and absurd? And when it comes to playing the “Whose Baby?” game, I think I would trust the parent to know, rather than a third-party “verifier” from a faraway land of which the main players in this farce probably know very little. Read the rest of this entry »

Although Finance Minister II Datuk Johari Abdul Ghani was appointed with the specific task to complete the rationalization and resolution of the 1MDB scandal, he is on public record that he was not involved in the arbitration settlement negotiations and had not been briefed before the “settlement” was concluded.

He said that although he was involved in the decision to take the case to London arbitration as he was confident that 1MDB would win the case because of its strong legal position, the Prime Minister made the decision for the country looking at the “bigger picture”, in terms of relationship between Malaysia and Abu Dhabi.

This is not only completely unacceptable but downright unethical and most unfair to Abu Dhabi, suggesting that the Abu Dhabi sovereign wealth fund, International Petroleum Investment Company (IPIC) is so dishonest and unIslamic as to demand double payments for its US$3.5 billion bond guarantee!

It is most improper for the Prime Minister, Datuk Seri Najib Razak, as the “M01” cited in the US Department of Justice (DOJ) largest kleptocratic litigation (as admitted by the Minister in the Prime Minister’s Department Datuk Seri Abdul Rahman Dahlan) to be in a conflict-of-interest position to be involved in the 1MDB-IPIC settlement, especially as it involved the Ministry of Finance (Incorporated) Malaysia (MoF Inc) as a party of the IMDB-IPIC “arbitration settlement” guaranteeing that 1MDB would make the payments under the “arbitration settlement” – which is as good as undertaking that the Malaysian taxpayers will finally foot the bill for the 1MDB-IPIC “arbitration settlement”. Read the rest of this entry »

by Greg Farrell , Andrea Tan , and Keri Geiger
Bloomberg
April 28, 2017

U.S. prosecutors investigating Goldman Sachs Group Inc.’s role in raising almost $6 billion for Malaysia’s 1MDB investment fund are asking questions about money flowing through accounts linked to Tim Leissner, the lead banker behind the transactions, according to people familiar with the matter.

Officials from the Federal Bureau of Investigation and Justice Department have been interviewing bankers familiar with 1Malaysia Development Bhd. about Leissner’s network of relationships with politically connected Malaysians, said the people, who asked not to be named because the queries aren’t public.

In interviews as recent as last month, the people said, the U.S. officials asked about the association between Leissner, who left Goldman Sachs in February 2016, and Low Taek Jho, who the Justice Department said in July was at the center of a scheme that siphoned more than $3 billion dollars from 1MDB. U.S. investigators are asking in particular whether money was sent from a Leissner-linked account to an entity controlled by someone tied to the Malaysian government, one of the people said. Leissner’s attorney, Marc Harris, declined to comment. An official who answered the phone at Low’s Hong Kong-based company Jynwel Capital said he wasn’t available. Read the rest of this entry »

Although Finance Minister II Datuk Johari Abdul Ghani has denied contradicting Prime Minister Najib Abdul Razak over the arbitration settlement between 1MDB and International Petroleum Investment Company (IPIC), he has clearly tried to dissociate and distance himself from the settlement.

It is therefore quite unworthy of him to allege that DAP PJ Utara, Tony Pua, was trying to create a wedge between Najib and him.

When news of the 1MDB-IPIC “arbitration settlement” was first reported in the international media exactly a week ago that 1MDB was on the verge of inking a “settlement” with IPIC, Johari was mentioned as part of the “high powered team” leading the negotiations to resolve the dispute, but this was promptly denied by Johari the very next day from Washington, where he was attending a World Bank meeting – that he was not involved in the arbitration settlement negotiations and that he had not yet been briefed on the final outcome of the settlement.

This has come as a surprise to all Malaysians – as all this while, everyone, including Members of Parliament, were under the impression that Johari as Finance Minister II had become the key player in the whole 1MDB imbroglio, in fact the final “gatekeeper” in the resolution of the 1MDB scandal. Read the rest of this entry »

By Una Galani
BreakingViews
Reuters
27 April 2017

Malaysia will bear most of the burden of 1MDB. Abu Dhabi helped the Southeast Asian nation finance the upstart sovereign fund back in 2012. It subsequently looked like the Gulf emirate would share a large part of the multi-billion dollar fallout relating to the fund, now the focus of money-laundering probes around the world. But Malaysia is throwing its chequebook at the problem, paying up to try to repair relations between the two states before Prime Minister Najib Razak seeks re-election.

A debt settlement agreement announced on Monday addresses most of the lingering financial mess. 1MDB will repay a $1.2 billion loan to IPIC by the end of this year. It will also re-assume responsibility for two bonds, which will cost another $4.8 billion including interest.

The Malaysian investor had initially played hardball with Abu Dhabi. It stopped paying coupons on the notes last year after the pair fell out over a separate $3.5 billion payment that went missing. 1MDB paid that amount to an entity with a similar name to a unit of IPIC, which the latter has claimed it never received. Read the rest of this entry »

Davide Ghiglione in Milan, Simeon Kerr in Dubai and Caroline Binham in London
Financial Times
APRIL 24, 2017

Prosecutors looking at involvement of a former managing director of Abu Dhabi’s Ipic 

Italian prosecutors are investigating a former Emirati sovereign wealth fund official over allegations of insider trading in UniCredit shares in 2010 as the fallout from the Malaysian 1MDB scandal spreads through Abu Dhabi’s overseas investment portfolio.

Prosecutors in Milan placed Khadem al-Qubaisi, the jailed former managing director of Abu Dhabi’s International Petroleum Investment Company (Ipic), under investigation “several months ago,” said a person briefed on the probe.

The Italian prosecutor’s office confirmed the probe and said it is “currently working to collect the final elements” for the investigation. A spokesman for the office declined to comment further. Read the rest of this entry »

The Information Ministry’s Special Affairs Division (Jasa), which has been assigned the special task of exonerating the Prime Minister, Datuk Seri Najib Razak and the Malaysian government of any responsibility for the 1MDB kleptocratic scandal, made a startling statement when its director general, Datuk Mohd Puad Zakashi, said that the arbitration settlement between 1MDB and Abu Dhabi’s International Petroleum Investment Corporation (IPIC) has “weakened” US Department of Justice (DOJ) civil suits and claims that the 1MDB funds were stolen.

Puad may not have realized it, but his statement was as good as a government admission that the US DOJ has a case to apply for the forfeiture of more than US$1 billion of 1MDB-linked assets, but the Malaysian government believes that the arbitration settlement has weakened the suits from the evidential aspects.

Whether this is so is open to dispute, but it is most startling, to say the least, that the Malaysian government, which has completely denied that there is a 1MDB scandal, both nationally and internationally, suddenly accepting the scenario that DOS had a case to apply for the forfeiture of over US$1 billion of 1MDB-linked assets – subject to the availability of adequate evidential material to prop up the kleptocratic suits.

If the Malaysian government’s stand is that there is no 1MDB scandal at all, that all the 1MDB allegations are the “fevered imaginations” of those with ill-intentions to the Najib government, including several foreign nations, then Puad and the Malaysian Government should be consistent in holding that there is simply no case whatsoever for the DOJ lawsuits – and not talking about the “weakening” of DOJ law suits as a result of the 1MDB-IPIC arbitration agreement! Read the rest of this entry »

By NEIL GOUGH
New York Times
APRIL 24, 2017

HONG KONG — In 2012, with help from Goldman Sachs, a Malaysian sovereign wealth fund called 1Malaysia Development Berhad sold $3.5 billion worth of bonds backed by an Abu Dhabi government fund to help it purchase power plants.

But behind the scenes, American officials have claimed, nearly $1.45 billion was illegally redirected to Swiss bank accounts and ultimately into the hands of some of the people involved in the deal.

That deal is now part of an international investigation into the Malaysian fund, known as 1MDB, that has plagued Najib Razak, the prime minister of Malaysia. A civil complaint filed by Justice Department officials in the United States said that some of the funds landed in the hands of Mr. Najib’s friends and associates as well as officials and executives from Abu Dhabi’s sovereign wealth fund.

On Monday, Malaysia and Abu Dhabi moved to clean up one part of the scandal: who would pay back investors who bought the bonds. Read the rest of this entry »

In his speech to the World Association of Newspapers and News Publishers (WAN-IFRA) Asia Media Awards on Wednesday night, the Prime Minister Datuk Seri Najib Razak spoke about the need to combat the “plague of false and fake news” in the social media and foreign newspapers.

He has however conspicuously omitted the plague of false and fake news in the mainstream media in Malaysia, in particular those owned and controlled by UMNO/BN, which have blazed the path of transforming “newspapers” into “lies-papers”.

False and fake news, whether in social media, foreign newspapers or in local mainstream media, must be equally combatted, exposed and condemned for they are designed not only to distort truth, but deceive the people about the true facts and situation.

In this connection, the greatest surprise in the Prime Minister’s speech at the international media event was his total omission, without any single mention, of the global kleptocratic 1MDB scandal which had haunted and hounded the country and Malaysians for the past two years.

Najib is in fact responsible for the most heinous fake news any government has concocted with the official government version that the global kleptocratic 1MDB scandal does not exist. Read the rest of this entry »