Malaysia takes Goldman Sachs to court with AG Tommy Thomas saying that the bank’s dealings with 1MDB broke laws at the heart of the capital markets; MRT Corp will be looking for a new CEO; and Unisem’s offer is “not fair or reasonable”.
PETALING JAYA: The Attorney-General Chambers has filed criminal charges against subsidiaries of investment bank Goldman Sachs and its key employees over the handling of bonds issued by 1Malaysia Development Bhd (1MDB) totalling USD6.5bil (RM27.2bil).
Attorney general Tommy Thomas said that charges were filed against Goldman Sachs' former Southeast Asia chairman Tim Leissner and former 1MDB employees Jasmine Loo Ai Swan and fugitive businessman Low Taek Jho, also known as Jho Low.
He added that banker Roger Ng Chong Hwa would be charged shortly.
Thomas said Leissner and Ng had conspired with Low, Loo and others to bribe Malaysian public officials in order to procure the selection, involvement and participation of Goldman Sachs in three Bond issuances.
He also said that the Goldman employees had not only received part of the misappropriated bond proceeds, but also received large bonuses and enhanced career prospects at the bank and in the overall investment banking industry.
"The charges arise from the commission and abetment of false or misleading statements by all the accused in order to dishonestly misappropriate USD2.7bil (RM11.3bil) from the proceeds of three bonds issued by subsidiaries of 1MDB, which were arranged and underwritten by Goldman Sachs," he said in a statement on Monday (Dec 17).
Thomas said the three bonds were the 10-year USD1.75bil (RM7.32bil) issued by 1MDB Energy Limited, the 10-year USD1.75bil (RM7.32bil) issued by 1MDB Energy (Langat) Limited and the 10-year USD3bil (RM12.6bil) issued by 1MDB Global Investments Limited.
Thomas added that the investment bank had benefited by receiving underwriting and arranging fees of approximately USD600mil (RM2.5bil), which was higher than market rates and industry norms.
Thomas also said the Offering Circulars and Private Placement Memorandum for the Bonds filed with the Labuan Financial Services Authority had also contained statements which were false, misleading, coupled with omissions of material.
"Offering Circulars and Private Placement Memorandum are serious documents, intended to be relied on, and, in fact, were relied on, by purchasers of the bonds.
"The scheme designed and crafted by the accused to fraudulently structure the bonds for ostensibly legitimate purposes when they knew that the proceeds thereof would be misappropriated and fraudulently diverted by the accused themselves was planned and executed in order to defraud the Government of Malaysia and the purchasers of the bonds," he said.
Thomas said their scheme had contravened Malaysia’s securities laws, particularly, Section 179 of the Capital Markets and Services Act, 2007 (Act 671).
"Malaysia considers the allegations in the charges against all the accused to be grave violations of our securities laws, and to reflect their severity, prosecutors will seek criminal fines against the accused well in excess of the USD2.7bil (RM11.3bil) misappropriated from the Bonds proceeds and USD600mil (RM2.5bil) in fees received by Goldman Sachs, and custodial sentences against each of the individual accused: the maximum term of imprisonment being 10 years," he said.
He said that if no criminal proceedings are instituted against the accused, their undermining of the financial system and market integrity will go unpunished.
“Having held themselves out as the pre-eminent global adviser / arranger for bonds, the highest standards are expected of Goldman Sachs. They have fallen far short of any standard. In consequence, they have to be held accountable,” he said. - The Star.
Goldman Sachs Group has acknowledged that it may receive “significant penalties” resulting from its deals with 1Malaysia Development Bhd (1MDB).
It also recognised that it had weaknesses in its compliance controls, The Wall Street Journal (WSJ) reported.
In its third-quarter earnings filing to regulators, the investment management firm made citations about the indictment against its former employees for bribery and money laundering involving 1MDB, WSJ said.
Although it had acknowledged that it could face “significant penalties resulting from 1MDB”, Goldman Sachs said it was also cooperating with investigators, the report on Monday said.
According to WSJ, Goldman Sachs wrote in the filing that the indictment alleged the firm’s “system of internal accounting controls could be easily circumvented and that the firm’s business culture, particularly in South-East Asia, at times prioritised consummation of deals ahead of the proper operation of its compliance functions”.
The filing also mentioned that former Goldman Sachs bankers Tim Leissner and Roger Ng had “circumvented the firm’s internal accounting controls in part by intentionally deceiving control personnel and internal committees”.
Goldman Sachs is said to have received nearly RM2.5bil (US$600mil) in fees from the 1MDB deal.
Previously, the Financial Times reported that Goldman Sachs had helped 1MDB sell about RM27bil (US$6.5bil) of bonds between 2012 and 2013, two years before the authorities raided 1MDB’s offices to investigate allegations of massive fraud.
In a filing to the Securities and Exchange Commission on Friday, Goldman Sachs estimated that possible losses related to litigation proceedings could run as high as US$1.8bil (RM7.49bil) above its total reserves for such matters.
Previously, Goldman Sachs estimated litigation losses to be in excess of US$1.5bil (RM6.24 bil).
The Financial Times also reported that almost 30 people from Goldman Sachs had reviewed 1MDB deal’s approval process.
Meanwhile, in a 2016 indictment, the US Department of Justice (DoJ) alleged that most of the money raised with Goldman Sachs’ help was siphoned off by Low Taek Jho, also known as Jho Low.
The fugitive businessman together with bankers Ng and Leissner were indicted by the DoJ on Thursday for conspiring to launder money and violating the Foreign Corrupt Practices Act in relation to 1MDB.
Leissner pleaded guilty to conspiring to launder money and to violating anti-bribery laws. He has been ordered to forfeit US$43.7mil (RM182.27mil) as a result of his crimes.
The criminal charges relating to 1MDB are the first by DoJ.
In 2016, the DOJ reportedly recovered over US$1bil (RM4.17bil being the current conversion rate) that was allegedly stolen, and sought the forfeiture of property, including a Bombardier private jet, Manhattan penthouse, Beverly Hills mansion and paintings by Vincent Van Gogh and Claude Monet.
Low is currently wanted in Malaysia and Singapore and other countries over investigations into 1MDB.
In a separate report by the Associated Press, PKR incoming president Datuk Seri Anwar Ibrahim said that Low would be given a fair trial.
Anwar said he was “quite pleased” with developments in the case so far and that investigations in the United States, Malaysia and Singapore and other places were “progressing very well”.
The report also said Anwar had hinted that more former officials could be tried on corruption charges.
Malaysia has applied for a Red Notice to seek assistance from countries such as the United Arab Emirates, Indonesia, India, Myanmar, China and Hong Kong via Interpol, and Taiwan via diplomatic channels to arrest Low. - The Star
Related posts:
Goldman Sachs CEO: I feel horrible ex-bankers broke law in 1MDB case
https://youtu.be/L0XbbbqTHYw
SINGAPORE (Reuters): Goldman Sachs chief executive officer David Solomon said on Wednesday he felt "horrible" that two former employees "blatantly broke the law" in their dealings with 1Malaysia Development Berhad.
US prosecutors filed criminal charges against the two former Goldman bankers and a Malaysian financier linked to the alleged theft of billions of dollars from the fund.
An investigation into where 1MDB's money went became the largest carried out by the Department of Justice under its anti-kleptocracy programme, and the scandal was a major reason why Malaysian voters rejected Datuk Seri Najib Tun Razak, their prime minister for nearly a decade, in the May 9 general election.
"It is obviously very distressing to see two former Goldman Sachs employees went so blatantly around our policies and so blatantly broke the law," Solomon said in an interview with Bloomberg TV in Singapore.
"I feel horrible about the fact that people who worked at Goldman Sachs, and it doesn't matter whether it's a partner or it's an entry level employee, would go around our policies and break the law," Solomon said.
US prosecutors announced last week that Tim Leissner, former partner for Goldman Sachs in Asia, had pleaded guilty to conspiracy to launder money and conspiracy to violate the Foreign Corrupt Practices Act, and agreed to forfeit US$43.7mil (RM181.8mil).
Roger Ng, the other charged former Goldman banker, was arrested in Malaysia and is expected to be extradited.
Reuters was not immediately able to contact Ng's lawyer on Wednesday. His lawyer did not immediately respond to a request for comment after US prosecutors unveiled the charges last Thursday.
Goldman has also placed its former co-head of Asia investment banking, Andrea Vella, on leave over his role in the firm's involvement with the case, pending a review of allegations, according to a person familiar with the decision.
The Wall Street bank said in a securities filing on Friday that it may also face penalties from dealings with 1MDB.
Asked if he could provide assurances that neither he, former CEO Lloyd Blankfein or any of the senior management team suspected illegality or compliance breaches in dealings with 1MDB, Solomon said:
"We take compliance and control in our firm extremely seriously, we always have...We are going to continue to cooperate with the authorities and there's a process in place and that process will proceed." According to prosecutors, the investment bank generated about US$600mil (RM2.49bil) in fees for its work with 1MDB, which included three bond offerings in 2012 and 2013 that raised US$6.5bil (RM23.29bil). Leissner, Ng and others received large bonuses in connection with that revenue.
Finance Minister Lim Guan Eng told Reuters in June that the government will be looking at the possibility of seeking claims from Goldman Sachs.
Prime Minister Tun Dr Mahathir Mohamad said Malaysia will look into why Goldman was paid around US$600mil in fees, an amount that critics say exceeds normal levels.
Goldman has maintained that the outsized fees related to the additional risks it took on after it bought the un-rated bonds while it sought investors and, in the case of the 2013 deal which raised US$2.7bil (RM11.24bil), 1MDB wanted the funds in a hurry for a planned investment.
The new Malaysian government has barred Najib and his wife from leaving the country, and the former premier faces multiple charges of corruption, money laundering and abuse of power, though he has consistently denied any wrongdoing related to 1MDB.
In another interview with Bloomberg on Tuesday, Malaysia's prime minister-in-waiting Anwar Ibrahim said it would be
"inexcusable" if Goldman Sachs was complicit in the scandal. – Reuters
American investment bank Goldman Sachs
should return the US$588mil (RM2.4bil) in it was paid for 1MDB-related
matters, says Lim Guan Eng.
The Finance Minister said the fees were for raising bonds totalling
US$6.5 billion (RM23.29 billion) for the Malaysian state investment firm
back in 2012 and 2013.
"They must pay us back this money, not only the US$588mil but much
more than that," he said during a briefing on Budget 2019 at Hotel
Equatorial Penang on Wednesday (Nov 7).
He said there were consequential losses due to the fees paid as it had cost Malaysia big losses.
This was in respond to Goldman Sachs chief executive officer David
Solomon, who admitted that their employees had broken the law over 1MDB
matters.
Read more at
https://www.thestar.com.my/news/nation/2018/11/08/guan-eng-goldman-sachs-should-return-rm2_4bil-fees/#wqMtc2F6O1jC35UJ.99
Settling the civil action would free up prosecutors to pursue the Goldman bond issued on behalf of 1MDB, which netted the bank suspiciously obsence commissions of up to 11% - Sarawak Report
Sarawak Report has learnt that Jho Low’s new legal team, headed by the well-connected former federal prosecutor and New Jersey governor Chris Christie, has already obtained a high-level meeting with officials of the DOJ and that at that meeting they offered to come to a settlement on behalf of the fugitive Malaysian advisor to 1MDB.
This would represent an effective acknowledgement by Low, who is currently believed to be holed up in China, that he is unlikely to be able to persuade the US courts to return some $1.2 billion in assets seized from him alone, which investigators have traced to money stolen from Malaysia’s development fund.
However, by cutting a deal the billionaire, who is facing criminal charges in Malaysia, Singapore, Switzerland and elsewhere, including the United States, will be hoping to retain some of the value of the assets.
Malaysia Kept On Sidelines?
Malaysian entities have expressed concern that the United States authorities may be tempted to negotiate with Jho Low’s new, high-powered legal team, in order to close a case that could otherwise carry on for years. Notably, the US recently refused to grant a Malaysian official request for a guarantee it would return all the money back from the assets seized.
“It doesn’t mean that the United States will not return the money to Malaysia, but it does mean the US is insisting on keeping control over the process and that might include settling the case for less than the entire amount”
one person who is well versed in the matter explained to Sarawak Report. It is further understood that the approach from Jho Low’s team has not yet been formally discussed with the Malaysian authorities, who may very well react with dismay at the prospect of any settlement of this nature.
Particularly galling to Malaysians is the likelihood that Low’s new and well-connected legal advisors are being generously paid by money that was itself stolen from 1MDB. US investigators have been reported as concluding that the origin of the cash received by Christie and one of President Donald Trump’s go-to law firms, Kasowitz Benson Torres, is indeed 1MDB.
Likewise, the money sent to pay the libel lawyers Schillings in the UK, which has been doing its best to disrupt the publising othe the book The Sarawak Report as well as the Wall Street Journal’s own book in Britain, is also thought to trace back to 1MDB.
Going For Goldman Sachs
The apparent willingness of US prosecutors to discuss such matters with Low’s new team and the news that they may indeed be tempted to reach a deal, may indicate that the DOJ sleuths are already focusing on other aspects of the case, informed observers have told Sarawak Report: namely the pursuit of the banking giant Goldman Sachs. Settling the civil action would free up prosecutors to pursue the Goldman bond issues on behalf of 1MDB, which netted the bank suspiciously obscene commissions of up to 11%.
The bank has earned the anger and ill-feeling of countless Americans as a result of its pivotal role in causing the crash of 2008 and yet none of its bankers have been brought to book so far. The apparent negligence and huge sums earned through 1MDB have provided US investigators their most compelling evidence yet against what many believe to be rogue behaviour by the major bank.
It was Sarawak Report that first exposed the huge commissions being earned by Goldman Sachs from 1MDB in 2013, by publishing the terms of two so-called power purchase bonds, which together with a later third offering netted commissions totalling just under $600 million for the bank. The market price for such services was a fraction of that amount.
The former South East Asia boss, Tim Leissner has already been picked up in the United States and is understood to be cooperating with the DOJ enquiries. A new case against the global bank is where 1MDB now seems headed as it gains even more international significance.
Once upon a time, Malaysians were enchanted with Jho Lows champagne lifestyle and proud that he had friends in high places. We now know better.
IF a poll was conducted to ask Malaysians to name their 10 most hated people, Low Taek Jho – also known as Jho Low – would surely be in the top five, if not three.
There has been a quick succession of books on the 1Malaysia Development Bhd (1MDB) saga and in the one by two Wall Street Journal reporters, Billion Dollar Whale, Low is the central villainous character.
Yet for a brief shining moment, this man was the pride of his home state and the nation.
Then Penang chief minister Lim Guan Eng was reported as saying that he was proud to note the accomplishments of overseas Penangites, including this particularly “well-connected” fellow.
That was back in July 2010 when a mysterious Malaysian man of means started hitting the headlines for partying with the likes of Paris Hilton, and counted actors Jamie Foxx and Leonardo DiCaprio and singer Usher as his good friends.
When Hilton – the glamour party girl before the Kardashians overtook her – was detained by drug enforcement officers in Paris in 2010, she was reportedly travelling with “personalities close to power in Malaysia”, Low being identified as one of them.
In just three months, his champagne-infused big spending ways – US$50,000 (RM206,800) or US$60,000 (RM248,190) a pop – set New York’s nightlife scene on fire and caught the attention of the US media. And that was how Low became famous.
Oh wait! He’s Malaysian, not some little emperor from Shanghai or Shenzhen, so we puffed up with pride at the success of one of our own.
Somehow, the ability to party with the rich and famous became a yardstick for success. The assumption was that Low must have done something great to be so filthy rich and make such “friends”.
Low, then 28, became a subject of intense curiosity that Malaysian and foreign media wanted to know.
Then The Star landed an exclusive interview with him. The two hours with him provided enough fodder for stories spread over two days on July 29 and 30, 2010.
The interview covered topics like his Arab childhood friends and investors whom he said were the real big spenders, how he made his first million when he was just 20 and his expertise in setting up sovereign wealth funds.
Yes, we were pretty pleased with ourselves for beating the competition in getting Low to speak.
The interview was picked up by other newspapers and portals locally, regionally and internationally.
The Star took efforts to provide Low’s personal details like his age, birthplace, education and languages spoken.
What I also found amusing was that we also gave his height (1.7m) and his weight (88kg), which is not common for such interviews. That was probably our nice way of indicating how chubby he was.
The stories were positive pieces, painting Low as a successful role model. Of course, at that time, no one suspected that he was the mastermind behind the world’s biggest kleptocracy.
We were simply dazzled by his partying playboy high life and accepted in good faith all his claims on why he was successful: he went to the right schools, from Chung Ling to Wharton School of Business, made well-connected, influential friends (especially Arab royals) and got a great financial start.
As The Star reported: “At the age of 20, (he) started an investment company called The Wynton Group with US$25mil (RM103.4mil) from family and South-East Asian and Middle Eastern friends. The investment company in which he owns a stake is now worth in excess of US$1bil (RM4.1bil).”
Penang businessman Tan Sri Tan Kok Ping, a close family friend, described Low as a very bright person who respected his elders.
He was also “an active person, has a corporate brain and his public relations skills are equally good. He’s also quite a fast eater.
“I watched him grow up since he was a kid and I knew he was brilliant, but I never thought he would be so successful,” said Tan.
A reader who was so impressed by the Star exclusive blogged about his son having studied in Harrow in Bangkok and opined: “He (the son) is certainly no Jho Low, but I hope he can learn the positives from Jho’s life and work hard and be successful.”
Well, we now know better how Low operated and whose money he was spending on his celebrity friends and more.
From the man with the Midas touch, he has become the embarrassment no famous person wants to touch. I doubt Hilton or Usher takes his calls anymore. He is a fugitive on the lam, hunted by governments around the globe.
Much as he is furiously claiming innocence, he is indeed our billion-dollar whale. The whale is a metaphor in business, meaning to land large accounts that can transform a small company into a major player.
A whale can also mean a businessman who is close to a country’s regime, is protected by the state and receives government contracts and large bank loans without any collateral, as explained in the book, Why Nations Fail: The Origins of Power, Prosperity and Poverty.
The maddening fact is this portly plunderer is hard to find. He apparently has multiple passports, including one from St Kitts and Nevis.
It’s very possible he is no longer 88kg. He could be thinner or fatter – depending on whether stress makes him eat even more and faster – or had plastic surgery, grown or lost his hair, but he should still be 1.7m tall, unless he wears hidden heels in his shoes.
Our government has said it is not sure where he’s hiding, but with Malaysians in just about every corner of the world, can we not somehow tap into this vast network? Even a whale must surface for air somehow, somewhere.
What really got my goat was what he glibly said in the Star interview: “Ultimately, I am Malaysian. I am one who does not forget my country and I think there is a lot we can do for Malaysia. But when you build the trust of investors, you need to deliver what you promised.
“For me, we all work very hard. Of course, we have a disadvantage where at our age, people may perceive it differently. At the end of the day, I handle investors’ money prudently. I generate returns for them.”
And this: “I am not an excessive person. Excessiveness with alcohol is just not me.”
No, not in alcohol but his name is now synonymous with excessiveness in luxury acquisitions.
Oh, where’s Capt Ahab when we need him?
Aunty wants to remind all of us that truly, all that glitters is not gold. Feedback to aunty@thestar.com.my
Credit: June H. L Wong, So aunty, so what?
Having his say: A screengrap of www.jho-low.com website which contained the letter
Rogue businessman insists he is not guilty via letter on personal website
PETALING JAYA - Fugitive businessman Low Taek Jho has proclaimed his innocence over allegations related to 1Malaysia Development Bhd (1MDB) in a signed letter uploaded to his personal website.
Low, also known as Jho Low, admitted that in hindsight, he might have done things differently.
"But any mistakes I made do not amount to the sweepingly broad and destructive allegations being made against me.
"Let me be clear: I am innocent," Low wrote.
The website, www.jho-low.com, also contains legal documents related to the 1MDB case, news media articles on him and 1MDB as well as statements by Low’s lawyers.
A notice on the website said that jho-low.com was created on behalf of Low through his legal counsel to provide information to the public.
A search on the Internet archive shows that the website has been updated since 2015 but until recently only contained general information on Low.
According to the WHOIS database, jho-low.com was created on June 2, 2014.
Yesterday, the link to the website was shared extensively on social media, after the undated letter was posted.
“I only ask that everyone – courts, prosecutors, and the general public – keep an open mind until all of the evidence comes to light,” Low wrote in the letter.
The financier wrote that for the past several years, he had been subjected to a series of allegations around the globe in relation to the operations of 1MDB.
He said many of the allegations had originated from blog posts, “improper” leaks from governmental agencies around the world, or unproven allegations filed in court, where he had never been afforded an opportunity to set the record straight.
“I have been paraded in effigy through the streets of Kuala Lumpur, and photographs from my younger days plastered in tabloids across the globe.
“It has become clear that there is no platform where objective information can be presented regarding this issue – and no jurisdiction that hasn’t been poisoned by gossip, innuendo, and unproven allegations.
“This website is an effort to change that,” Low wrote.
The 36-year-old Penangite is described as a “global philanthropist, investor and entrepreneur” on the website.
A check with an official from a public affairs firm representing Low confirmed the veracity of the website.
Meanwhile, Swiss whistleblower Xavier Justo, in an immediate response, said: “The Jho Low website does not show any proof of his innocence.
“It is just a bunch of legal documents showing that he wants a few cases to be dismissed.
“It’s the way the justice system works, you can be as guilty as guilty is and ask for a case to be dismissed. It’s not proof of innocence,” he told The Star.
The former PetroSaudi International executive said he was appalled at Low’s attempts to defend himself through the website.
“Any decent person will face justice (in court) if he can prove that he is innocent,” he said.
He added that he was amazed at Low’s attempts to try to “stop the distribution of books, abuse the justice system and hire public relations officers to defend his reputation while also creating a website to tell fairy tales”.
Low’s current whereabouts are unknown; he has been speculated to be hiding in China or the Caribbean.
He and his father, Tan Sri Low Hock Peng, were charged in absentia in Malaysia last month over money allegedly stolen from 1MDB.
Last week, Low, through the London-based law firm Schillings, sought to ban the books, The Sarawak Report by Clare Rewcastle Brown and Billion Dollar Whale by The Wall Street Journal’s Tom Wright and Bradley Hope, from going on sale.
The Bombardier Global 5000 jet parked on the tarmac of Seletar airport in Singapore
PETALING JAYA: Malaysia will have to cough up at least RM3.5mil to bring the Global 5000 private jet that belongs to fugitive Low Taek Jho, better known as Jho Low, back to Malaysia.
The luxury private jet, which was impounded by the Singapore authorities since February last year, is currently parked at the Singapore Seletar airport.
“However, before the plane is allowed to be flown to Malaysia, Seletar airport has asked for settlement of the parking charges first,” said a source.
The source said the parking charges over the last 18 months have escalated to about RM3mil.
It is learnt that Seletar airport had indicated the fee to the Singapore authorities following Malaysia’s keen interest in taking possession of the plane.
Seletar airport is managed by Changi Airport Group Pte Ltd, a facility mainly used for private flights.
Changi Airport Group declined to comment on the parking charges.
“Due to client privacy, we will not be able to share the information,” its spokesman told The Star.
The source said the Malaysian government would have to pay the fee before the airport authority allows the plane to leave its tarmac.
It is understood that negotiations on the parking charges have been held between the Malaysia and Singapore authorities and the airport operator.
But to date, the source said, they have yet to reach a conclusion on the payment.
“The Malaysian government would also have to fork out another RM500,000 to service the aircraft, which has been grounded and left under the sun at the airport apron,” said the source.
The source said the aircraft that has been grounded since February last year is currently undergoing service maintenance work to ensure its airworthiness before it is allowed to be flown to Malaysia.
“The maintenance work on the airport craft is almost completed,” said the source.
The plane is likely to be taken to Subang Airport, a facility mainly used by private planes, said the source.
The Global 5000 jet was listed by the US Department of Justice (DoJ) as one of the assets bought using Malaysia’s state-owned 1MDB laundered money, through a series of shell companies and bank accounts.
In a court filing in June 2017, the US DoJ document stated Jho Low used part of the US$700mil (RM2.3bil in 2009) diverted from the 1MDB to acquire the luxury jet.
The Bombardier Global 5000 built in 2008 costs about US$35.4mil (RM145mil). The aircraft was bought at the end of 2009, less than three months after the US$700mil was moved away from 1MDB.
The plane, registered in the US as N689WM/MSN 9265, is registered to a company called Wynton Aviation and placed as a trust with Wells Fargo Bank Northwest.
Wynton Aviation is a company that was registered in the British Virgin Isles in 2009. The DoJ stated that Wells Fargo’s records indicate that it is a holding company owned by Low.
It was learned that prior to the plane being seized, the jet was based at Teterboro Airport New Jersey, close to Jho Low’s New York home.
Airliners.net website showed the plane had flown to Paris, Geneva, Beijing and London among other countries between 2009 and 2017.
Prime Minister Tun Dr Mahathir Mohamad had on Aug 13 said Malaysia was keen to take possession of the aircraft.
Early in the month, Malaysia also took possession of the superyacht Equanimity from the Indonesian authorities.
The vessel, valued at US$250mil (RM1bil), was handed over to Malaysian authorities near Indonesia’s Batam island on Aug 6.
It has since been brought back to the Boustead Cruise Centre in Pulau Indah.
Equanimity, which according to DoJ belongs to Jho Low and purchased with funds diverted from 1MDB, was seized by the Indonesian authorities in Tanjung Benoa port, Bali, in February.
The yacht, which is 54th in luxury vessels of its class in the world, was seized at the request of US authorities as part of its initiative to recover the billions diverted from 1MDB.
Another source said due to the high maintenance of the superyacht and its crew, the Indonesian government had decided to turn over the vessel to Malaysia at the request of Dr Mahathir when he visited Jakarta in June.
KUALA LUMPUR: Super yacht Equanimity of fugitive financier Low Taek Jho (Jho Low) fame, was bought using four tranches of funds totalling US$262.4 million misappropriated from 1Malaysia Development Bhd (1MDB) between January and June 2014, according to lawyers representing the Malaysian government who “arrested” the billion-ringgit vessel in Port Klang yesterday.
In fact, US$140.6 million or just over half the yacht’s price tag was paid in early June 2014 using proceeds of a US$239.9 million Deutsche Bank bridging loan taken by 1MDB’s then 100%-owned unit 1MDB Energy Holdings Ltd (1MEHL) on May 26, 2014, according to information from Sitpah Selvaratnam, from the firm Tommy Thomas Advocates & Solicitors and lauded as one of Malaysia’s best maritime lawyers. [See Chart 4]
Two days after getting the loan, 1MEHL transferred most of the cash to Aabar BVI (British Virgin Islands), also known as the fake Aabar. The money then went through Affinity Equity and Alpha Synergy before reaching Jho Low, who on June 3, 2014 transferred US$140.6 million to WorldView for the fourth and final payment of the yacht. The earlier three tranches originating from 1MDB also went to WorldView.
“WorldView Ltd is a family trust of which only the Low family are beneficial owners of,” according to Low’s email in June 2015 to a lawyer at Hill Dickinson LLP and a senior BSI banker cited in the 251-page filing by the US Department of Justice (DoJ) in June 2017 to seize 1MDB assets, including the Equanimity.
The same filing said Jho Low and his parents Low Hock Peng (LHP) and Evelyn Goh Gaik Ewe on Sept 9, 2013 flew from Barcelona to Rotterdam — near where the Equanimity was being built — to view the shipyard and the yacht the following day.
The DoJ filing also said Jho Low laundered over US$200 million in misappropriated funds traceable to 1MDB’s 2013 bond sale into a US account belonging to US-based law firm DLA Piper.
The US$29.1 million second payment for Equanimity made on Feb 5 and 18 as well as April 2, 2014 was part of the US$56.5 million that went from DLA Piper’s account to LHP — who with Jho Low participated in the Condor joint venture (JV) through Strategic Resources (Global) Ltd (SRG) to acquire Houston-based Coastal Energy with International Petroleum Investment Co (Ipic) and Ipic’s Spanish unit Compañía Española de Petróleos SA.
The first and third tranches of payments for Equanimity made on Jan 7, 2014 and April 11, 2014 originated from US$2.72 billion bond proceeds raised in March 2013 by 1MDB Global Investment Ltd, which found their way to another Jho Low-linked offshore entity, Tanore Finance Corp.
The bond proceeds were intended for a JV with Ipic’s unit Aabar Investments PJS called Abu Dhabi Malaysia Investment Co. But instead of funding the Tun Razak Exchange development, the cash ended at Tanore instead. The money in the Tanore account was also used to buy artworks and the Park Lane hotel in New York, according to the DoJ filing.
When questioned by reporters yesterday, former prime minister Datuk Seri Najib Razak said he has never been on the Equanimity and has no knowledge that the yacht was bought using 1MDB money.
“Why we didn’t pursue [to get back the yacht] earlier [was] because we were interested in the full settlement with United Arab Emirates on Ipic … that is worth much more than this Equanimity. That is the biggest sum; we wanted [this] big settlement to be settled first, that’s why we didn’t pursue the yacht,” Najib said, adding that the Equanimity “is being used as a populist move”.
“I have no knowledge whatsoever as to the yacht and also the yacht itself is subject to litigation. It’s not a clear-cut matter,” Najib added.
PETALING JAYA: Equanimity
could smash the world record for the most expensive superyacht ever to
be sold at auction in the event it goes under the hammer.
With the vessel now in Malaysian custody, all eyes are on the fate of the luxury yacht reportedly worth US$250mil (RM1bil).
Finance Minister Lim Guan Eng had said on Monday that his ministry wanted to get the best value from the Equanimity.
“Our aim is to draw back as much money as we can from the asset,” Lim
had said, adding that the immediate plan was to ensure that all
paperwork was in order and that all proper controls were imposed.
An online search of prices fetched so far by superyachts suggest that Equanimity could create a new record if the government decides to initiate an auction.
An article on the website of British publication Boat International listed the sale of the 72m Lürssen Apoise as the most expensive yacht ever auctioned.
At an auction in 2010, the yacht was sold for US$34.75mil (RM164mil), which is much lower than what Equanimity could be worth.
VesselsValue, a London-based online ship-valuation database firm, when contacted, said it valued Equanimity at US$175mil (RM712mil).
“Looking through our system, we also have the Apoise as the superyacht which has achieved the most at auction,” said VesselsValue associate director Claudia Norrgren.
The Apoise and Equanimity fall under the category
of a superyacht or mega yacht, which refers to a commercially operated
luxury yacht which is over 24m long.
Asked about the long term, Norrgren said superyachts don’t really go up in value.
“If it goes for auction it never realises its full potential as it is
a distressed sale,” she said, adding that there have been times when a
superyacht could go up in value from its ordered price.
“Pre-2018, people wanted a yacht immediately and there was a premium for very young superyachts, around one or two years old.
“Nowadays, it is a pretty stable market for second-hand superyachts,
with changes in value set by market depreciation rather than being
influenced by economic factors,” explained Norrgren.
The market for superyachts comprises the super-rich, also known as ultra-high net-worth individuals, said a luxury yacht broker.
The broker said it was in the best interest for the government to keep Equanimity in good condition in order to sell it easily.
The selling price of a used superyacht such as Equanimity, he said, would depend on a number of factors including how many people have been on the ship and used it daily.
The broker said offering Equanimity for charter service could diminish its value.
“The condition (of the yacht) will deteriorate. It will bring in
charter income but the resale price of the yacht will be reduced,” added
the broker.
Despite its eye-watering value, Equanimity is not the most expensive when it comes to superyachts.
In an online CNN article last month, which listed 10 of the most expensive superyachts, the top spot went to Serene, a 134m stunner that was reportedly bought by Saudi Crown Prince Mohammed Salman for US$550mil (RM2.24bil).
In 10th position is Octopus, a US$200mil (RM814mil) vessel commissioned by Microsoft co-founder Paul Allen.
KUALA LUMPUR (Aug 8): Former prime minister
Datuk Seri Najib Razak has arrived at the Kuala Lumpur Court Complex
this morning to face new charges against him in relation to SRC
International Sdn Bhd. He is scheduled to go to the Sessions Court today
to ...
... fund 1Malaysia Development Bhd (1MDB) has laid claim to ... bought using monies misappropriated from 1MDB, when it finally arrived ... plaintiffs — the 1MDB Group of Companies, 1MDB and two of ... its anti-kleptocracy investigation into 1MDB. The DoJ said proceedings ...
PORT KLANG: The 1Malaysia Development Bhd
legal team appointed by the Attorney-General’s Chambers to represent the
investment firm and the Government will be seeking a declaration of
ownership of the superyacht Equanimity. Free Malaysia Today reported ...
