The plot thickens in 1MDB scandal

2 March, 2015

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In July of 2009, the front page of English daily The Star was splashed with the words “No ordinary Jho.” The story behind the cover page was a world-exclusive interview with the playboy billionaire philanthropist Low Taek Jho, who opened up about his wealth for the first time.

Just a few weeks prior to the report, Jho Low (as he is known) was photographed partying and drinking with American heiress Paris Hilton and many more celebrities besides. The bespectacled 28-year-old (at the time), who has been described by many newspapers as ‘chubby’, seemingly shot to the limelight for, well, being rich. Before he became known as the party-goer, he was virtually unknown, although he came from money — his father is prominent businessman in Penang.

In the interview, Jho Low said his success was due to tenacity and hard work, but said it is also attributable to being at the right place and right time; and meeting the right people coupled with a trusting relationship.

He also spoke of his close relationship with the sons and daughters of prominent families across the Middle East during his time studying at the prestigious Harrow school.

“I have a lot of close friends and close contacts in Abu Dhabi. In particular, I am very good friends with His Excellency Yousef Al Otaiba, who was formerly the director of international relations at the Crown Prince’s court and he is currently the ambassador for UAE to the US and Mexico. Yousef is the son of Dr Mana Al Otaiba who is the first oil minister for the UAE,” he was quoted as saying.

“Of course, I am also close friends with several members of the Abu Dhabi royal family. It’s a very small circle of key movers and shakers in Abu Dhabi,” he said.

The interview, which the paper said was two hours long, offered a glimpse into the life of this ‘international man of mystery’, something Jho Low later said was untrue, he was simply the  “the concierge service that arranges everything.”

Jho Low, seen with Paris Hilton. (Pic from Says.com)

Jho Low, seen with Paris Hilton. (Pic from Says.com)

In September of 2009, Malaysian sovereign wealth fund-cum-investment body 1Malaysia Development Berhad (1MDB) was entering into a joint venture with PetroSaudi International (PSI), which is founded by one of Arab’s elite, Tarek Essam Ahmad Obaid.

The JV company, called 1MDB Petrosaudi Ltd, were supposed to undertake great things together, to which 1MDB pumped funds into the JV. The JV, however, had an existing debt of US$700 million in ‘advances’, payable to PSI. 

A JV agreement was signed very soon after the company was set up, and it was equally as quickly that, according to reports and documents purportedly exposed by whistleblower site Sarawak Report, the US$700 million was paid back to PSI. Exactly who received the money, and where the debt came from is still not known.

At the same time, PSI injected assets worth at least US$1.5 billion into 1MDB Petrosaudi Ltd. However, the JV failed, and the assets and loans were converted to Murabaha notes.

Today, as the controversy surrounding the debt-ridden 1MDB grows, new but unverified documents have allegedly pointed the trail back to the “concierge” himself: Jho Low.

Sarawak Report in its latest expose have revealed hundreds of email exchanges and documents where the fingerprints of Jho Low appears everywhere. As of press time, the veracity of these documents cannot be confirmed, and its claims remain unsubstantiated, but the claims are damning. They include:

>> Creating 1MDB Petrosaudi as a front to channel US$700 million to a company called Good Star  Limited, owned by Jho Low;

>> Dubious origins of assets worth US$1.5 billion from PSI from a oil and gas venture which never existed in the first place because the oil field never belonged to PSI, who were supposed to develop it, and because the venture was terminated six months after the agreement was signed.

These new allegations come on top of already controversial reports of 1MDB’s debts, its inability to pay back its loans, and some US$2 billion worth of assets stashed in the Cayman Islands — half of which has been returned, and the other half purportedly returned but which 1MDB has kept mum about its whereabouts.

Public Accounts Committee member Tony Pua, who has been a vocal critic of 1MDB and its goings-on since the first time he mentioned it in Parliament in 2010, in a press conference today said the documents, if they are true, point towards an elaborate scam to siphon money from 1MDB.

“If these documents and email communications are indeed genuine, the government must answer for the brazen abuse of power in siphoning money from the wholly-owned Finance Ministry subsidiary,” he said.

Pua, who is also Petaling Jaya Utara MP said the only way that 1MDB and the government can now clear the air is to come clean on where all the money is.

“Show us the redemption statements from the Caymans, payable by cash to which account, and to which bank,” he said.

So far, 1MDB has not issued any statements to the latest Sarawak Report and aside from Prime Minister Najib Abdul Razak distancing himself from the fund by saying he did not run the day-to-day of 1MDB, there is still a lot left unanswered. 

As pressure to open the books on 1MDB mounts, the ‘concierge’ who has found himself dragged into the spotlight may have no other choice than to do so.

– The Rocket

This article was written by on Monday, March 2, 2015 at 9:00 pm. You can follow any responses to this entry through the RSS feed. You can leave a response, or trackback from your own site.

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