Prominent companies named amid new 1MDB scandal of missing $4 billion

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1MDBSwitzerland’s top prosecutor after months of investigation on January 29 said there are “serious indications” that $4 billion may have been misappropriated from state-owned companies in Malaysia that were in relations with government fund 1Malaysia Development Berhad, or 1MDB, a state investment vehicle headed by Prime Minister Najib Razak.

The office of Swiss Attorney General Michael Lauber said it had identified four cases of alleged criminal conduct and formally asked Malaysia to help with its probes into possible violations of Swiss laws related to bribery of foreign officials, misconduct in public office, money laundering and criminal mismanagement at the fund.

Some of the money, the office said, had been transferred to Swiss accounts held by Malaysian former public officials and current and former public officials from the United Arab Emirates. Switzerland has since frozen the accounts.

A number of firms in Malaysia, Saudi Arabia and Abu Dhabi were named in relation to the matter, but no details of their roles, if any, were given.

The attorney general’s office said it is examining allegations of criminal activity from 2009 to 2013 relating to PetroSaudi International Ltd., a Saudi oil company; SRC International Sdn Bhd, a unit of Malaysia’s Finance Ministry; Malaysian companies Genting Group and Tanjong Plc; and a joint venture between 1MDB and an Abu Dhabi sovereign-wealth fund called the Abu Dhabi Malaysia Investment Company.

The Wall Street Journal has a few details.

1MDB set up a joint venture in 2009 with PetroSaudi. Malaysia’s former auditor general last year found that $700 million of 1MDB cash meant for the joint venture was instead sent to a Seychelles-based firm called Good Star Ltd., set up by Jho Low, a young Malaysian businessman who helped launch 1MDB. Later, around $500 million from the Swiss bank account of Good Star were sent into a bank account controlled by Low at the Singapore branch of Swiss bank BSI SA.

SRC International, a former unit of 1MDB, allegedly sent a total of $24 million into Prime Minister Najib Razak’s accounts in 2014 and early 2015 via a company that carries out corporate social-responsibility work for 1MDB. About $1 million of this cash was apparently spent via credit cards attached to the accounts. Malaysia’s Attorney General said Razak was “not aware” of the transactions

1MDB allegedly paid inflated prices for power assets purchased from Genting Group and Tanjong, the latter being controlled by Malaysian billionaire Ananda Krishnan, whereby the firms apparently donated millions of dollars to a foundation chaired by Najib Razak which spent it on schools and other projects during Razak’s 2013 elections campaign. 1MDB denied overpaying for the assets, but the fund’s financial reports show it wrote down the value of the plants it bought from Genting and Tanjong only months after purchasing them.

Abu Dhabi Malaysia Investment Company was given $3 billion by 1MDB raised through a bond to develop a new financial center in Kuala Lumpur, Tun Razak Exchange. But about half the money was put into offshore portfolio investments, according to 1MDB’s financial statements. At least $850 million apparently went missing when they were sent from 1MDB to Aabar Investments, a company held by Abu Dhabi’s International Petroleum Investment Co., or IPIC. The latter also owns a private bank in Switzerland, Falcon Private Bank AG through which an anonymous British Virgin Islands-based company sent the larger part of the almost $700 million deposited into Najib Razak’s accounts.

The companies so far did not comment on the allegations.

 

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Reading Time: 2 minutes

Switzerland’s top prosecutor after months of investigation on January 29 said there are “serious indications” that $4 billion may have been misappropriated from state-owned companies in Malaysia that were in relations with government fund 1Malaysia Development Berhad, or 1MDB, a state investment vehicle headed by Prime Minister Najib Razak.

Reading Time: 2 minutes

1MDBSwitzerland’s top prosecutor after months of investigation on January 29 said there are “serious indications” that $4 billion may have been misappropriated from state-owned companies in Malaysia that were in relations with government fund 1Malaysia Development Berhad, or 1MDB, a state investment vehicle headed by Prime Minister Najib Razak.

The office of Swiss Attorney General Michael Lauber said it had identified four cases of alleged criminal conduct and formally asked Malaysia to help with its probes into possible violations of Swiss laws related to bribery of foreign officials, misconduct in public office, money laundering and criminal mismanagement at the fund.

Some of the money, the office said, had been transferred to Swiss accounts held by Malaysian former public officials and current and former public officials from the United Arab Emirates. Switzerland has since frozen the accounts.

A number of firms in Malaysia, Saudi Arabia and Abu Dhabi were named in relation to the matter, but no details of their roles, if any, were given.

The attorney general’s office said it is examining allegations of criminal activity from 2009 to 2013 relating to PetroSaudi International Ltd., a Saudi oil company; SRC International Sdn Bhd, a unit of Malaysia’s Finance Ministry; Malaysian companies Genting Group and Tanjong Plc; and a joint venture between 1MDB and an Abu Dhabi sovereign-wealth fund called the Abu Dhabi Malaysia Investment Company.

The Wall Street Journal has a few details.

1MDB set up a joint venture in 2009 with PetroSaudi. Malaysia’s former auditor general last year found that $700 million of 1MDB cash meant for the joint venture was instead sent to a Seychelles-based firm called Good Star Ltd., set up by Jho Low, a young Malaysian businessman who helped launch 1MDB. Later, around $500 million from the Swiss bank account of Good Star were sent into a bank account controlled by Low at the Singapore branch of Swiss bank BSI SA.

SRC International, a former unit of 1MDB, allegedly sent a total of $24 million into Prime Minister Najib Razak’s accounts in 2014 and early 2015 via a company that carries out corporate social-responsibility work for 1MDB. About $1 million of this cash was apparently spent via credit cards attached to the accounts. Malaysia’s Attorney General said Razak was “not aware” of the transactions

1MDB allegedly paid inflated prices for power assets purchased from Genting Group and Tanjong, the latter being controlled by Malaysian billionaire Ananda Krishnan, whereby the firms apparently donated millions of dollars to a foundation chaired by Najib Razak which spent it on schools and other projects during Razak’s 2013 elections campaign. 1MDB denied overpaying for the assets, but the fund’s financial reports show it wrote down the value of the plants it bought from Genting and Tanjong only months after purchasing them.

Abu Dhabi Malaysia Investment Company was given $3 billion by 1MDB raised through a bond to develop a new financial center in Kuala Lumpur, Tun Razak Exchange. But about half the money was put into offshore portfolio investments, according to 1MDB’s financial statements. At least $850 million apparently went missing when they were sent from 1MDB to Aabar Investments, a company held by Abu Dhabi’s International Petroleum Investment Co., or IPIC. The latter also owns a private bank in Switzerland, Falcon Private Bank AG through which an anonymous British Virgin Islands-based company sent the larger part of the almost $700 million deposited into Najib Razak’s accounts.

The companies so far did not comment on the allegations.

 

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