Court grants temporary freeze on RM1.5b 1MDB funds in UK

Judge imposes the temporary freeze of 1MDB funds in a UK law firm, pending the disposal of an asset forfeiture application filed by the govt through MACC

by RAHIMI YUNUS/ pic by BLOOMBERG

THE Kuala Lumpur High Court has issued an interim order to block PetroSaudi International Ltd (PSI) and its director Tarek Obaid from moving over US$340 million (RM1.45 billion) linked to 1Malaysia Development Bhd (1MDB).

Judge Mohd Nazlan Mohd Ghazali imposed the temporary freeze of the funds, which is kept in a UK law firm, pending the disposal of an asset forfeiture application filed by the government through the Malaysian Anti-Corruption Commission (MACC), which has been fixed for hearing on Aug 28.

The government on July 10 applied for a prohibition order to restrain any dealings of the money amounting to US$340,258,246.87 held by PSI and its subsidiary PetroSaudi Oil Services (Venezuela) Ltd (PSOS-VZ) in the law firm Clyde & Co LLP.

Putrajaya is seeking unspecified money deposited under an intermediate account name of Temple Fiduciary Services Ltd at Barclays plc in the UK.

The application has been filed under Section 53 of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act, naming Obaid, PSI, PSOS-VZ, Clyde & Co and Temple Fiduciary services as the five respondents.

The interim order is said to be extended to British authorities via mutual legal assistance so that it can be enforced in the UK.

Counsels Yusof Zainal Abiden and Alex Tan, who represented Obaid and PSOS-VZ, said they will challenge the application, but it will take some time to file affidavits of their overseas clients.

Deputy public prosecutor Budiman Lufti Mohamed urged the court to issue an interim order pending the hearing next month to ensure that the monies will not be dispersed.

The prosecution filed the ad-interim injunction application with an affidavit by MACC investigating officer Mohd Afiq Ab Aziz, who said he reasonably believed and suspected that the assets being held or deposited abroad were proceeds from illegal activities.

The officer said he had reasonable grounds to believe that the monies amounting to US$340 million as at February last year, currently held in the escrow account of Clyde & Co on behalf of PSOS-VZ, formed part of the subject matter or evidence in connection with the conspiracy to defraud or fraud, involving former Prime Minister Datuk Seri Mohd Najib Razak, Obaid and fugitive businessman Low Taek Jho, or Jho Low, with other related individuals against 1MDB and its units.

Mohd Afiq also said he had reasons to believe that there are other bank accounts which formed part of the subject matter or evidence in connection with the scheme to defraud 1MDB, referring to the bank account under the name and/or managed by Temple Fiduciary Services on behalf of PSOS-VZ.

He said the application to freeze the money was appropriate until the court would definitively determine whether it was rightfully belonging to 1MDB.

In February, Jho Low, Obaid and another PSI director Patrick Mahony were charged in absentia for abetting in the laundering of US$69 million.

Malaysia has also issued arrest warrants against the three leading characters in what is dubbed the world’s largest corporate larceny and put the wanted trio on International Police Agency’s red notice.