Charges, players and the shrouded transfers of 1MDB monies

1MDB, designed to drive the nation’s strategic and long-term economic development, turned out to be a curse for the country


The US Department of Justice (DoJ) had revealed that 1Malaysia Development Bhd (1MDB) officials and their associates misappropriated US$4.5 billion (RM18.7 billion) between 2009 and 2014 through an extended web of transactions.

For a layman, such sizeable amount of money is hard to fathom. But what irked many taxpayers and citizens is the fund was misused by top officials and proxies for their personal gains.

1MDB, a sovereign state fund that was founded in 2009, was designed to drive the nation’s strategic and longterm economic development.

It, however, turned to be a curse for the country. Saddled with billions in debt, untraceable money flows, expensive yacht, rare jewellery and artworks, private jet and expensive parties had turned the fund into the top financial fraud scandal in history.

US attorney general Jeff Sessions described the multi-billion dollar corruption as the worst form of kleptocracy.

The DoJ had previously named Good Star (Good Star Ltd) Phase, Aabar-BVI (Aabar Investments PJS Ltd) Phase, Tanore (Tanore Finance Corp) Phase and Options Buyback Phase.

Hollywood celebrities like Leonardo Dicaprio and model Miranda Kerr had also been dragged into the 1MDB’s dark side. Both, however, had not been charged with any crime in any legal jurisdictions.

Central to the whole financial scam is a businessman from Penang named Low Taek Jho, or better known as Jho Low.

Low, who is in hiding, is Malaysia’s most wanted individual in the country’s history.

The recent book “The Billion Dollar Whale” pointed to Low, his associates and front companies that spread from the US and the Caribbean to the Middle East and Asia.

The 1MDB scandal contributed to the ouster of Barisan Nasional (BN) in the May 9 14th General Election (GE14).

Former Prime Minister (PM) Datuk Seri Mohd Najib Razak is already facing 32 criminal charges on criminal breach of trust, money laundering and power abuse related to 1MDB’s and its former unit SRC International Sdn Bhd’s funds of RM2.3 billion and RM42 million respectively.

Najib has claimed trial to all these charges. His wife, ex-first lady is also facing 17 money laundering charges. She has also vowed to fight to prove her innocence.

Najib could face a maximum jail term of up to 20 years, while his wife could face 15 years if found guilty.

The recent charges against Najib have revealed transactions to parties which were mentioned previously in DoJ and other investigation.

Here are the players who are central to the infamous 1MDB scandal.

Tanore’s RM4.1b Transactions
In 2013, Najib approved the Government Letter of Support for 1MDB to raise US$3 billion bonds.

The debt, which was underwritten by Goldman Sachs Group Inc in March, was supposedly used to fund a joint venture with Aabar Investment PJS, known as the Abu Dhabi Malaysia Investment Co, or ADMIC, which included investment in Tun Razak Exchange development, Kuala Lumpur’s new financial district named after Najib’s father.

US investigators alleged about US$1.26 billion from the amount was diverted to a bank account held in the name of Tanore Finance Corp at Falcon Bank in Singapore.

Tanore, which had no legitimate connection with 1MDB or ADMIC, then transferred RM2.08 billion in nine tranches to Najib’s account.

The ex-PM denied any wrongdoing and claimed that the monies were a “political donation” from Saudi royal.

Tanore was a shell company set up by Low in the name of his associate Eric Tan as the recorded beneficial owner.

In the charge sheet, Najib “returned” RM2.04 billion in five transactions to Tanore in August 2013 after the GE13.

Many had speculated that the money was used to purchase the infamous pink diamond necklace, several artworks, real estates, the superyacht Equanimity, and others assets by Low or his associates.

The Monetary Authority of Singapore had shut down the Falcon Private Bank’s Singapore branch for serious breaches of anti-money laundering controls and improper conduct by senior management at the branch and its head office in Switzerland.

It was the second financial institution that had been forced to cease operation by the republic’s monetary authority after BSI Singapore. Both banks were alleged to have managed funds related to parties connected to 1MDB.

Who Else If Not Umno
A total of RM20.1 million had gone to Umno which was used to fund the expenses for the GE13 in 2013.

The charge sheet has accused Umno’s former president of paying RM20 million to Umno’s head office and another RM100,000 to Penang Batu Kawan Umno.

Other reports suggested that other coalition parties in BN had received RM300 million. Umno received the most of the funds totalling RM145 million.

ORB Solutions
The company was paid RM2 million on Aug 12, 2013, based on court documents.

It is speculated that ORB was the contractor for Najib’s personal social media campaign, if not for the whole BN, including public relation campaigns, media warfare and cyber trooping.

The media had reported that ORB was the developer for Najib’s personal app called “Najib Razak”. A quick check showed that the mobile app is no longer available either for Apple or Android.

CTOS website showed that the company was registered on Jan 13, 2010, as a web management and communication strategies solutions provider.

None of the people related to ORB Solutions including those with close link to Najib had been charged over the RM2 million transfer from the former PM’s account.

RM303,000 to Semarak Konsortium
Najib transferred RM303,000 to Semarak Konsortium Satu Sdn Bhd on Aug 14, 2013.

According to Sarawak Report, the company is owned by Datuk Mohd Omar Mustapha, a businessman close to Najib. The Malaysian Reserve was not able to verify the claim.

Mohd Omar was Petroliam Nasional Bhd’s (Petronas) independent non-ED before he tendered his resignation on June 1. He was appointed to the board on Sept 15, 2009, and made the chairman of Petronas’ remuneration committee in 2015.

His corporate life included VP and assistant to the executive chairman of Malaysia Digital Economy Corp (formerly known as Multimedia Development Corp) from 1997 to 2000, before becoming the special officer 1 to Najib, the then-deputy PM in 2004 to 2006.

RM246,000 to Lim Soon Peng
Details are scarce on why Najib paid RM246,000 to Lim Soon Peng on Aug 7, 2013.

Lim’s identity could not be ascertained, but media reports have suggested that the individual is likely to be a top official of a property developer.

Sarawak Report reported the amount of payment made to Lim totalled over RM3 million for an unknown reason.