Malaysia to challenge payment 
to IPIC in UK court


Malaysia’s new government is challenging the US$5.78 billion (RM24.17 billion) consent award in 1Malaysia Development Bhd (1MDB) debt settlement claims in the UK court, claiming the agreement was orchestrated by a figure central to a multibillion fraud.

The government will file to the Courts of England to set aside the consent award recorded on May 9, 2017.

The arbitration, conducted under the Rules of the London Court of International Arbitration, was between International Petroleum Investment Co (IPIC) and Aabar Investments PJS as claimants, and 1MDB and Minister of Finance (MoF) Inc as the respondents.

Attorney General Tommy Thomas (picture) said Malaysia will claim for a relief from any obligation to pay the balance of the US$4.32 billion to IPIC or Aabar under the consent award, and additionally have the right to recover the US$1.46 billion already paid to the claimants.

“We are confident that we have a strong case,” he said in a statement yesterday.

He said the application will be filed today in the High Court in London.

Tommy claimed the US$5.78 billion award was procured by fraud or in a manner contrary to public policy.

Under the consent award, Malaysia has to pay US$5.78 billion to IPIC and the board trustee over a five-year period, of which US$1.46 billion has been paid, leaving a balance of US$4.32 billion.

The next interest payment of US$50 million is due on Nov 11, 2018.

Similar payments are payable periodically until April 2022. The final bullet payments, representing principal and interest of US$1.8 billion each, are due and payable in May and October 2022.

“The court application relates to the knowledge of IPIC and Aabar of the serious allegations made by the US Department of Justice (DoJ) against former Prime Minister and Finance Minister (Datuk Seri Mohd) Najib Razak, who was also the moving spirit and ultimate decision maker in 1MDB,” he said.

Tommy said such knowledge on their part was acquired, “inter alia”, no later than the time when the DoJ’s press conference was held by the US Attorney General Loretta Lynch in July 2016.

She announced the filing by by DoJ of several civil suits for the freezing of assets purchased by fraudsters from stolen proceeds, and popularly described as the “greatest kleptocracy in modern history”.

The grave, detailed allegations in those DoJ court documents were given tremendous global publicity, particularly in the political and business media.

“They had certainly entered the global public domain by July 2016. Najib was identified as ‘MO1’ in the DoJ pleadings,” Tommy said.

Any reasonable reader reading these court documents would immediately become aware of his central role in defrauding 1MDB to the benefit of himself, his stepson Riza Aziz and Low Taek Jho (Jho Low), Tommy said in the statement.

“In such circumstances, Malaysia takes the position that IPIC and Aabar were aware of the fraud of Najib. He was principally responsible for 1MDB and MoF Inc consenting to the award.”

Najib is facing more than three dozens charges of corruption, criminal breach of trust (CBT) and abuse of power. He had maintained his innocence in relations to 1MDB and vowed to fight all the charges.

Jho Low is a wanted man by the Malaysian authorities. He is in hiding, believed to be in China based on previous reports. He also claimed he was innocent.

“Every system of law would hold that he could not possibly have acted in the best interests of his country and his company. Indeed, he did not. Fraud is an established ground to challenge the consent award for public policy reasons,” Thomas said.

Former Treasury secretary general Tan Sri Dr Mohd Irwan Serigar Abdullah has also been charged, together with Najib, with six counts of CBT involving RM6.6 billion, partly linked to 1MDB’s debt payment to IPIC.