Playing Games With Names - Jho Low's Modus Operandi

Playing Games With Names - Jho Low's Modus Operandi

The Auditor General, who is known for his upright approach, is going to have a hard time re-setting a date for the publication of his report into 1MDB – due today, but postponed till further notice.

Like the Attorney General, Deputy Prime Minister, Head of the Public Accounts Committee, Vice President for UMNO, Special Branch Chief and shortly the Head of the Central Bank, he may find himself replaced first.  At least he is still alive, unlike the investigator from the MACC into this dirty business, Kevin Morais.

Today’s report in the Wall Street Journal shows that 1MDB paid a total of US$850 million into a bogus off-shore company, using the name of the Abu Dhabi fund Aabar, Aabar Investments PJS Ltd.

It appears to explain the mystery as to why 1MDB has maintained in its statements and annual reports that it paid some US$2.4 billion in total to Aabar/IPIC, whereas IPIC reports indicate nothing was received.

In short, 1MDB sent the money to a BVI company with virtually the same name as Aabar Investments PJS, but which belonged to somebody else.

Anyone who has followed the PetroSaudi joint venture scandal will recognise a familiar scam with 1MDB purporting to be under the impression it has paid money to one company, when in fact it went to another entirely.

Playing games with names - Jho Low's modus operandi

Playing games with names – Jho Low’s modus operandi

The news follows on from our own expose earlier this week detailing that, contrary to claims by 1MDB, the Seychelles company Good Star Limited belongs entirely to Jho Low.

This confirms that US$700 million which 1MDB still claim was paid into their joint venture with PetroSaudi was in fact siphoned off by the Prime Minister’s nominee, who was running 1MDB’s operations and also running off with a great deal of the money.

The Aabar Investments PJS Limited revelation also provides further evidence of a clear ‘modus operandi’ by the youthful Official Advisor to 1MDB, which was the title given to Low.

We can point to numerous transactions involving Jho Low and his nightclubbing friend, Aabar’s Khadam Al Qubaisi, which essentially consist of playing games with names to give the impression that shadowy off-shore companies were genuine subsidiaries of major concerns.

These bogus companies, playing in the opaque world of off-shore tax havens, have all turned out to be linked to suspicious losses of money from 1MDB.

PetroSaudi International Limited (Seychelles)

Take PetroSaudi International Limited, Seychelles, which was positioned as a subsidiary to PetroSaudi Holdings Limited (Cayman), itself involved in the joint venture with 1MDB.  In fact (after considerable to-ing and fro-ing about how to set up the arrangement) this was a company totally controlled by Jho Low through an investment management deal with one of his own off-shore companies Panama Investment Manager, which gave him control over all its money.

Tarek Obaid had agreed to act as the Director of PetroSaudi International Limited, Seychelled, but in a personal capacity, not linked to the main joint venture partner as alleged.

During its buy out of UBG, orchestrated by Jho Low, who had a major personal stake in the UBG, there was much concern expressed by AmBank officials negotiating the deal about who exactly did own this supposed off-shoot of PetroSaudi (which had received the money eventually used to buy UBG from 1MDB).

They were told that the shady nature of the ownership was owing to the need to conceal the private interest of the King of Saudi Arabia in the deal.  They accepted the excuse, which was a lie.

SRC Global

Business partners Jho Low and Khadem Al Qubaisi

Business partners and party pals Jho Low and Khadem Al Qubaisi

In 2013 the Aabar owned Spanish oil giant CEPSA purchased the Canadian company Coastal Energy for US$2.3 billion, in a deal masterminded of course by their boss the then all-powerful Chairman Khadem Al Qubaisi.

Strangely, he did the deal in tandem with a private company owned by none other than Jho Low, which took an option on the sale in its alleged role as ‘facilitator’. That company of Jho Low’s went by the name of Strategic Resources Global.  The details of SRG’s involvement have yet to be published, however insiders have intimated that the point of the option was that it could then be valuably sold back to CEPSA.

Given Low’s established history of using 1MDB money as backing for other private deals forged together with his pal Khadem from Aabar (see our exposes on the London Hotel bids of 2011) there can only be questions asked as to the strikingly similar name of the 1MDB subsidiary SRC International Sdn Bhd.

The shadowy nature of SRC International has caused constant comment in Malaysia, set up as it was with RM4 billion borrowed from the public pension fund KWAP, which has never been properly accounted for.  One of its known ventures however (through a BVI vehicle naturally) was a joint venture with none other than that sturdy business partner Aabar and KAQ, named none other than Aabar-SRC Strategic Resources Ltd.

Was name play once again at work as money flushed through these off-shore concerns with such similar names and confusion of cross-ownerships?  Did, by any chance, money flow in this fashion from the pension fund through 1MDB and its joint ventures with Aabar and into a private deal between Jho Low and Khadem?

We cannot know, because when questioned on these matters, the Finance Minister (cum Prime Minister, cum sole shareholder of 1MDB) hived SRC off from 1MDB and put it under his own Ministry of Finance portfolio, from where he has refused to release transparent accounts ever since.  The public money remains unaccounted for!

Merryl Capital

Move on to what the Australian newspaper describes as the mysterious off-shore company Merryl Capital, which was stuck right in the middle of the unravelling scandal in Australia over the finance company Bridge Global, which Najib (doubtless on the advice of 1MDB’s advisor Jho Low) used to invest the alleged profits (obtained not in cash, but in ‘promissory notes’ mind you) made from the PetroSaudi deal, from which Good Star had siphoned most of 1MDB’s original investment.

As the Australian points out, despite its name, this entity has nothing to do with the more famous Merryl Lynch.

Bridge Partners didn’t pay in cash but in promissory notes — IOUs — which 1MDB then invested in Bridge Global Absolute ­Return. According to Bridge Global’s prospectus, Bridge Global Absolute Return is managed by Hanhong, a Hong Kong securities company in which it planned to buy a half stake.

Bridge Global Absolute Return owns almost 10 per cent of Bridge Global, making it the company’s second-biggest shareholder behind another mysterious offshore entity, Merrill Capital, which owns 10.2 per cent.

Despite its name, Merrill Capital appears not to be linked to Merrill Lynch, according to Mr Childs’ affidavit. It is instead a UAE company associated with Mr Goh that owns some 8.5 per cent of Avestra.

To cover the Petrosaudi hole, it’s alleged that in 2012 1MDB signed a deal with Abu Dhabi’s International Petroleum Investment Corporation under which IPIC guaranteed $US3.5bn of bonds issued by 1MDB.

Aabar Investments PJS Ltd

So, it looks like we have an established modus operandi indeed when it comes to the way Jho Low played David Copperfield conjuring tricks with 1MDB’s money, as it slipped away from the public fund that was being administered by his boss the PM, and into companies with names designed to make them sound like a more reputable outfit linked to established 1MDB deals.

Khadem was sacked in Abu Dhabi after irregularities were exposed

Khadem was sacked in Abu Dhabi after irregularities were exposed

The latest revelation that US$850 million was likewise transferred to Aabar Investments PJS Ltd by 1MDB thus follows an established pattern.  The WSJ have reported that Aabar has confirmed that this off-shore BVI entity, which was opened to take the money and then closed down agains shortly after, has nothing to do with their own group.

Abu Dhabi have, of course, long since sacked Khadem Al Qubaisi, after all these irregularities came to light at the start of the year.  Yet, Malaysia’s PM continues to defend 1MDB and Jho Low and he is obstructing vigorously the attempts to investigate what went wrong with all that missing money.

Other off-shore companies with surprisingly similar names to more reputable firms doubtless wait to be discovered and the 1MDB scandal continues to inevitably unravel in the face of the international investigations underway.

READ the full story by Wall Street Journal below:

Malaysia’s 1MDB Sent $850 Million to Entity Set Up to Appear Owned by Abu Dhabi Wealth Fund

A troubled Malaysian state investment fund sent at least $850 million last year to an offshore entity set up to appear that it was owned by an Abu Dhabi sovereign-wealth fund, a transfer which deepens the mystery over billions of dollars that are unaccounted for, according to documents reviewed by The Wall Street Journal and people familiar with the matter.

The 1Malaysia Development Bhd. fund, or 1MDB, set up by Malaysian Prime Minister Najib Razak in 2009 to promote economic development, is under investigation in at least six countries over a broad array of allegations that money was siphoned off for political spending and for personal gain.

One focus of investigation is $2.4 billion in payments that 1MDB said it made to a unit of Abu Dhabi’s International Petroleum Investment Co., or IPIC, as part of a deal involving the Malaysian fund’s purchase of power plants. The Journal reported in September that IPIC officials had concluded they did not receive the money, according to people familiar with the matter.

A 1MDB unit transferred at least $850 million via three transactions last year to a British Virgin Islands-registered company with a name that made it look like it was controlled by IPIC, according to wire transfer documents viewed by the Journal and two people familiar with the matter.

The 1MDB fund sent the money to “Aabar Investments PJS Ltd.” which closely resembles the name of IPIC’s wholly owned subsidiary Aabar Investments PJS, the wire documents show.

Aabar, the IPIC subsidiary, is an Abu Dhabi-registered company that holds prominent investments in the space tourism venture Virgin Galactic and a 5.1% stake in UniCredit SpA, Italy’s biggest bank.

Executives at IPIC and Aabar investigating the transfers have concluded neither of the two Abu Dhabi funds ever owned or controlled the British Virgin Islands company, according to the people familiar with the matter. Records in the British Virgin Islands don’t give any details on the owners or directors of the company.

The records show the British Virgin Islands firm was incorporated on March 14, 2012, and liquidated on June 23 this year, a time of growing criticism of 1MDB from opposition politicians and within Mr. Najib’s ruling party.

The 1MDB fund, in a statement to the Journal after publication of this article, did not reply to questions previously submitted about the transfers. The statement said “that the Wall Street Journal continues its campaign to malign 1MDB.” The fund also said it was cooperating with investigators. 1MDB in the past has said it stands by its financial statements, which show it made the payments to the Abu Dhabi fund.

An IPIC spokesman did not respond to questions. The Abu Dhabi fund hasn’t made any public statements about its relationship with 1MDB or the missing money.

Mr. Najib promised the fund would spur economic development by investing in new industries like renewable energy. But it has only bought existing power plants and land, while rolling up over $11 billion in debt that it is struggling to repay.

The transfers involving Abu Dhabi are among a series of transactions by 1MDB that are the focus of investigations. In Malaysia, the fund is being probed by the auditor general, the nation’s anticorruption body, the central bank and a parliamentary committee.

In 2012, 1MDB issued $3.5 billion in bonds to fund the purchase of power plants in Malaysia and overseas. The Abu Dhabi fund guaranteed the bonds.

The 1MDB fund’s publicly-available financial statements for the year ending March 31, 2013, show it paid $1.4 billion to IPIC’s unit Aabar as collateral for guaranteeing the bonds. The Malaysian fund said it paid another $993 million to Aabar in 2014 to cancel options granted to IPIC to buy a stake in 1MDB’s power assets, according to a copy of a draft report into 1MDB by Malaysia’s auditor general and 1MDB board minutes reviewed by the Journal.

Officials at IPIC say neither they nor any subsidiary received this money, the Journal reported. It is not clear why the payments were made to Aabar since IPIC made the guarantee.

IPIC’s consolidated financial statements, which include Aabar, make no reference to the collateral payment. A footnote in the 2014 statements said that as of the end of that year 1MDB owed IPIC $481.3 million in outstanding payments for the options.

No substantial amount of money was received by IPIC, the people familiar with the matter said. It isn’t clear how IPIC arrived at the $481.3 million figure and whether it relates to the $993 million transfer 1MDB says it made to IPIC as partial payment to cancel the options.

IPIC’s former managing director, Khadem Al Qubaisi, was dismissed in April by a presidential decree. The new management team of IPIC has been scrutinizing Mr. Al Qubaisi’s activity at the fund, according to the people familiar with the matter.

The latest twist in the 1MDB saga comes as Mr. Najib battles a separate scandal linked to the fund. Malaysian investigators said earlier this year that nearly $700 million was transferred into his personal bank accounts through entities linked to 1MDB, including a private Swiss bank owned by IPIC.

The source of the funds was unclear and the government investigation didn’t detail what happened to the money that allegedly went into Mr. Najib’s accounts.

Malaysia’s anticorruption body in August said the funds were a donation from the Middle East. The donor wasn’t specified.

Mr. Najib has denied wrongdoing and said he didn’t use any money for personal gain. He said this month that using money from a donor was appropriate and legal.

As well as Malaysia and Abu Dhabi, authorities in the U.S., Switzerland, Singapore, and Hong Kong are looking at 1MDB’s activities.

 

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