There are three outstanding elements to the present investigations over 1MDB.
These are the whereabouts of the missing US$1.3 billion siphoned from the PetroSaudi deal into the PM’s proxy Jho Low’s companies; the whereabouts of RM4 billion borrowed from Malaysia’s pensioners by 1MDB’s former subsidiary SRC International and the whereabouts of monies that have evaporated out of various development and power purchase deals made in tandem with Abu Dhabi’s Aabar fund – formerly headed by the now sacked Khadem al Qubaisi.
It was a sum of RM27 million (out of a total of RM42 million) traced from SRC International into the private account of Prime Minister Najib Razak in December, which formed the basis of a charge sheet that was drafted by the former Attorney General, just before he was shockingly sacked last week.
Separately, the Parliamentary Accounts Committee was trying to interview key players in the PetroSaudi deal, including businessman Jho Low and former Chief Executive Shahrol Halmi, before its hearings were forcibly shut down on the order of the Speaker.
Meanwhile, action was taken Wednesday to try to explain the US$680 million that was posted into the PM’s personal AmBank account just before the calling of the General Election in 2013 – a matter also revealed by the enquiry into 1MDB and published by the Wall Street Journal and Sarawak Report.
An anonymous statement was produced from the MACC (Malaysian Anti Corruption Commission), which claimed its investigators had ‘cleared’ the Prime Minister on this matter, because the agency could confirm that the money was a “donation” from an ‘undisclosed source’ from the Middle East and nothing to do with 1MDB.
This statement was surprising, not least because it came only hours after the MACC had clarified that the issue of the US$680 million did not come into the remit of its own enquiries.
There are four official task forces looking into the missing billions from 1MDB and the MACC explained that its own officers are focused only on the money related to the SRC International transactions.
Nevertheless, following a number of police roundups, interrogations and confiscations of materials from the MACC offices, this new line of enquiry appears to have been rapidly opened and completed within hours, thanks to information gleaned from an interview with the PM himself, who had explained the matter to the MACC’s apparent satisfaction.
No details have been given about the ‘donation’ or who had made it or why – leaving more questions than answers in the minds of Malaysians. Not least because, Najib has declared that it was “not for his personal use” and implied he spent it on party and election expenses.
Since it has been pointed out that this ‘donation’ amounts to roughly the entire sum raised by President Obama for his last election campaign in the United States, everyone is asking whether it was appropriate or legal for the Prime Minister to have accepted such a sum into his private account, without even his Deputy Prime Minister and UMNO Deputy Chairman (now sacked along with several members of the cabinet) being aware of it?
Few believe so.
Indeed, the well-known Malaysian financial writer, Ganesh Sahathevan, has today made another pointed observation, which has effectively torpedoed this ‘donation’ theory from below the water-line.
Sahathevan has pointed out that the banking documents detailing the dollar transfers specifically refer to the money as a “payment”:
As Sahathevan explains in his incisive article:
“Curiously the transfers (the sum total was paid in two amounts) are described as “Payment” and not ” Donation”.
This is not a matter of mere semantics. In these days of heightened controls on the transfer of funds, given the fear of terrorist financing, descriptions are important , even for very small sums. In this case where that large amount of money was being transferred to an individual the description becomes even more important.
Under such awkward circumstances it is plainly unacceptable for the Prime Minister to be so coy about the identity and motivations of this anonymous benefactor he is now claiming paid in the money.
Malaysians are at the very least entitled to an assurance that this whopping ‘gift/payment’ described by the MACC statement as being from ‘undisclosed donors from the Middle East’ was not connected in any way to Abu Dhabi’s Aabar fund and its sacked former Chairman, Khadem al Qubaisi?
This is because Al Qubaisi linked Aabar into a total of US$6.5 billion dollars of bonds raised by 1MDB in a series of unbelievably costly power purchase and joint venture deals without Abu Dhabi in the end raising a cent.
Large chunks of 1MDB’s missing monies appear to have disappeared into buying out ‘options’ given to Aabar for no apparent good reason.
Meanwhile, Aabar has simultaneously become involved in a number of investment deals with Najib’s business friend and proxy at 1MDB, Jho Low.
These have included an attempted buy out of London’s luxury Claridge’s Hotel group in 2011 and the purchase of Coastal Energy for US$2.3 billion in 2014.
Jho Low and Khadem, who share a taste for the nightclub scene (in stark contrast with al Qubaisi’s sober official image) have also become known as fellow party animals, close socially.
This has been particularly in the United States, where Al Qubaisi’s private venture, the Haakasan night club chain has become a firm fixture for Jho Low’s champaign fuelled extravaganzas, especially in Las Vegas.
Sarawak Report has already revealed that Good Star, the Jho Low controlled company which siphoned out the lion’s share (US$1.3bn) of the money that was paid by 1MDB into its first joint venture deal with PetroSaudi, paid a handsome US$20 million into Al Qubaisi’s personal Luxembourg bank account in 2012.
We ask whether this $20 million payment related to a deal with Jho Low or with 1MDB?
And, given how plainly unhealthy it would be for this fund or its chairman to reveal such a conflict of interest by paying Najib US$680 million, could the Prime Minister put concerns at rest and deny that Aabar and its flamboyant former Chairman are connected to this donation?
If Aabar/ Al Qubaisi were involved in the ‘donation/payment’ it would plainly represent a massive conflict of interest, given 1MDB’s ruinous adventures involving that fund.
Nevertheless, we reiterate that the denial should be demanded of the Prime Minister because of the very strong coincidental circumstances relating the transfer of the enormous sum of US$680 million into Najib’s own AmBank account in KL.
As Sarawak Report has already detailed the money arrived just two days after Goldman Sachs completed a hurried bond issue for US$3 billion on behalf of 1MDB on March 19th 2013.
This bond issue had been launched by 1MDB (of which Najib is the sole shareholder and signatory) immediately after the signing of a hasty joint venture with Aabar on March 12th, which press reports explained was a 50:50 agreement to invest in the development of the Tun Razak Exchange ‘financial zone’ in KL.
This zone remains a wasteland and despite the ostentatious signing ceremony featuring Mr Al Qubaisi and his Deputy, Mohamed al-Husseiny, Aabar never contributed its half of the promised cash.
One major beneficiary of this rushed bond issue was the bank Goldman Sachs who extracted an enormous fee for the private (and secret) money raising exercise.
When questioned about its eyebrow raising commission on this deal GSI later indicated that the client had been in such a hurry that the bank had been obliged to assume greater risk by taking on the burden of the loan before finding investors.
So, why was Najib in such a hurry and is is not important that the PM absolutely dispels any possible conclusion that the signing of the joint venture (never honoured by Aabar) on 12th March; 1MDB’s hasty raising of US$3 billion towards that joint venture by 19th March and then the payment of the US$680 million into the Prime Minister’s account for supposedly ‘election purposes’ on 19th and 21st of March could in any way be events that are related to each other?
Given that the PM has firmly said that this money was “not for personal use” and he has indicated it was spent by BN on the election (far in excess of all legal limits) what are onlookers to make of the fact that he dissolved Parliament and called that election just days later again on 3rd April?
Malaysians are understandably in need of reassurance that the aborted and unnecessarily expensive Aabar joint venture deal had nothing to do with the money that dropped like a thunderbolt into Najib’s account at this time and that it was indeed some other mystery Middle Eastern who was so generous as to secretly provide it, no strings attached?
After all, there is another extremely loud connection jangling in the minds of informed Malaysians linking Aabar to the Prime Minister’s finances in this matter.
As Sarawak Report and the Wall Street Journal pointed out when they revealed the existence of Najib’s secret pre-election ‘donation’, the money was traced as having originated from a BVI company account in Falcon Bank in Singapore.
It was transferred in two payments in dollar currency via the Wells Fargo Bank in the United States into one of Najib’s many AmPrivate Banking accounts in KL.
The owner of Falcon Bank is none other than Aabar.
The original Chairman of Falcon Bank, when it was bought by Aabar in 2009 had been Khadem al Qubaisi himself. By the time of this particular transfer in 2013 the Chairman was his trusty and ubiquitous deputy Mohammed al-Husseiny (cited above as having attended the joint venture signing with 1MDB days before in KL).
So, once again we are presented with a glaring link with Aabar and another good reason for the Prime Minister to be forced to deny that this Abu Dhabi joint venture party, which has done so well out of 1MDB had nothing to do with the splendid secret donation that he personally received.
It is appropriate in this context to remind readers of other acknowledged instances when Khadem and his deputy Mohammed al-Husseiny have been known to bail out Najib with terrifically generous investments.
The first occasion was when the Prime Minister and his step-son Riza attempted to shut down the growing clamour in Hollywood over who had bankrolled Riza’s film production company Red Granite’s US$100 million investment in the film Wolf of Wall Street.
After months of refusing to disclose their investors (in the face of speculation that none other than Riza’s good friend Jho Low might have been involved) Red Granite suddenly announced that the money had come from none other than the very same Mohammed al-Husseiny, Khadem’s deputy at Aabar, who had allegedly plucked the US$100 million out of his own pocket.
Since Mr al-Husseiny is merely an executive, all be it a senior one, at Aabar, this suggestion produced astonishment, but that has remained Red Granite’s story on the matter.
Of course, given Aabar’s financial ties with 1MDB, observers like Sarawak Report have been driven to question why this investment by al-Hussieny should be considered any more appropriate in terms of conflict of interest than if the financier had indeed been Jho Low?
We have received no reply on the matter.
Meanwhile, recent months have seen another even more blatant and significant intervention by Aabar to rescue Najib Razak’s reputation as Finance Minister and the sole shareholder and decision-maker at 1MDB.
In June, whilst the floundering fund was finding it impossible to pay the US$1 billion it owed in debt repayments and international banks were threatening to foreclose, Malaysia faced possible financial disaster threatened by 1MDB’s collapse.
The Cabinet refused the PM/FM’s pleas to pay the debts of this supposedly independent fund headed by Najib.
Once again it was Aabar which at the eleventh hour put its hand in its deep pocket and paid the debt.
This was despte the fact that al Qubaisi was by this stage sacked from all his posts at the Abu Dhabi sovereign wealth fund, in the wake of our exposes.
Malaysians must wonder what hold Najib has to influence Aabar in such a way. Is Abu Dhabi embarrassed about something to do with al Qubaisi’s antics with 1MDB or have they yet again exacted a very nice price for their support?
According to an agreement later published on the London Stock Exchange (providing a transparency not available on such matters in Najib’s Malaysia) it was revealed that Aabar has agreed to pick up struggling 1MDB’s debts for the next 12 months in return for undisclosed “assets” to the value of those debts.
Despite entreaties from representatives of the public interest, Najib has refused to disclose what these assets promised to the Abu Dhabi fund might be.
However, once again Aabar has turned out to be present right at the heart of Najib’s dealings over 1MDB, which now faces being cannibalised and disbanded in a sea of losses and debt.
Which is why, for starters, Najib needs to promise Malaysia that the money that came into his private account had no links whatsoever with 1MDB’s involvements with Aabar, even though it came from a bank owned by Aabar two days after the negotiation of 1MDBs ‘strategic investment deal’ with Aabar raised US$3 billion in bonds, backed by a ‘letter of comfort’ from the Malaysian Government.