1MDB money trail leads to London law firm

by ALIFAH ZAINUDDIN/ pic by AFP

BRITISH daily The Guardian yesterday reported that US$340 million (RM1.43 billion) stashed in the bank account of London-based law firm Clyde & Co LLP was believed to have been siphoned from 1Malaysia Development Bhd (1MDB).

The report, citing court papers, said the Malaysian Anti-Corruption Commission (MACC) was attempting to prevent the law firm from releasing the fund which it said can be linked back to proceeds from the state investment fund via Saudi businessman Tarek Obaid.

The MACC told the Kuala Lumpur High Court last month that the legal firm was seeking to disburse the money to companies tied to Tarek.

MACC also stated that Clyde & Co recently sought permission from the UK’s National Crime Agency to use the money to pay PetroSaudi International Ltd (PSI) and Tarek, who is a director at the oil services company.

MACC said a court order will urgently prevent the fund from being moved, as it suspected that PetroSaudi’s drilling ships were purchased using proceeds of the 1MDB fraud.

Therefore, any income generated by the drilling operations in Venezuela belongs to the state fund and should be preserved for 1MDB.

High Court Judge Mohd Nazlan Mohd Ghazali on July 16 also allowed the government’s application for an interim order to block PSI and Tarek from squandering the assets to other entities until the next hearing on the forfeiture lawsuit on Aug 28.

The government filed the application on July 10 seeking a prohibition order to restrain any dealings of the monies amounting to US$340 million belonging to PSI and its subsidiary, PetroSaudi Oil Services (Venezuela) Ltd (PSOS-VZ), held in Clyde & Co.

The government is also seeking an unspecified amount that was deposited under an intermediate account name, Temple Fiduciary Services Ltd, at Barclays Bank in the UK.

Both the specified and unspecified monies belonged to PSOSVZ, which is wholly owned by Tarek.

Tarek, PSI director Patrick Mahony and fugitive businessman Low Taek Jho were all charged in absentia in February for money laundering and engaging in a criminal conspiracy involving former Prime Minister Datuk Seri Mohd Najib Razak.

Prosecutors then shifted their focus to money held in several UK bank accounts which they suspect is linked to a joint venture (JV) company formed in 2009 between 1MDB and PetroSaudi.

Tarek is widely seen as a key figure involved in the partnership. Court filings in Malaysia and the US show the JV used 1MDB funds to finance the acquisition of drilling ships it rented to Venezuelan oil company Petróleos de Venezuela SA. Tarek has consistently denied any wrongdoing.

Last week, Najib was found guilty on seven charges linked to the 1MDB scandal. Days before the verdict, Goldman Sachs Group Inc reached a US$3.9 billion settlement with the government over charges of misleading investors over bond sales that the bank helped raise for 1MDB.