Malaysia to chal­lenge set­tle­ment be­tween 1MDB, IPIC, claim­ing fraud

The Myanmar Times - - Asean Focus - – Ky­odo

MALAYSIA will chal­lenge a set­tle­ment be­tween an Abu Dhabi sov­er­eign fund and scan­dal-rid­den state fund 1Malaysia De­vel­op­ment Ber­had last year un­der the pre­vi­ous govern­ment led by for­mer Prime Min­is­ter Na­jib Ab­dul Razak, At­tor­ney Gen­eral Tommy Thomas said Tues­day.

Thomas said in a state­ment that Na­jib “de­frauded” the state fund, which he was in charge of, and did not act in the in­ter­est of the na­tion when he con­sented to the set­tle­ment agree­ment at the Lon­don-based Court of In­ter­na­tional Ar­bi­tra­tion.

Un­der the agree­ment reached in April last year, 1MDB is to pay In­ter­na­tional Pe­tro­leum In­vest­ment Com­pany US$5.78 bil­lion (K9.29 tril­lion). So far $1.46 bil­lion has been paid.

Na­jib founded and over­saw 1MDB in his role as fi­nance min­is­ter.

“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.

It was thought that 1MDB had agreed to the set­tle­ment to avoid po­ten­tially em­bar­rass­ing pro­ceed­ings that Lon­don-listed IPIC and its unit, Aabar In­vest­ments PJS, ini­ti­ated in June 2016 with the ar­bi­tra­tion court for a to­tal claim of $6.5 bil­lion.

The Abu Dhabi fund had lent to and co-guar­an­teed bil­lions of dol­lars of 1MDB debt since 2012 for the ac­qui­si­tion of two power com­pa­nies.

The ar­bi­tra­tion process came in the midst of the stun­ning rev­e­la­tion by the US De­part­ment of Jus­tice in July 2016 that nearly $700 mil­lion was trans­ferred from 1MDB to Na­jib’s per­sonal bank ac­count.

The United States is among a host of coun­tries in­ves­ti­gat­ing 1MDB for fraud and money laun­der­ing.

The Jus­tice De­part­ment had es­ti­mated some $4.5 bil­lion was mis­ap­pro­pri­ated by close as­so­ciates of Na­jib, in­clud­ing his step­son, to buy lux­ury prop­er­ties, paint­ings and jew­ellery.

Na­jib ad­mit­ted re­ceiv­ing the $700 mil­lion in 2013 but claimed it came from the Saudi royal fam­ily and not 1MDB. He said the money was meant for his po­lit­i­cal party to be spent for the elec­tion that year and that he had re­turned most of it.

Na­jib was ousted from of­fice in the May gen­eral elec­tion. Since los­ing power he has been slapped with 38 cor­rup­tion and money laun­der­ing charges, in­clud­ing one for breach of trust over the pay­ment to IPIC.

Thomas said Malaysia’s le­gal chal­lenge at the High Court of Lon­don takes into ac­count the fact that IPIC and Aabar knew of the Jus­tice De­part­ment’s al­le­ga­tions against Na­jib.

“Malaysia will claim that as a re­sult of the fraud, we are re­lieved from any obli­ga­tion to pay the bal­ance of $4.32 bil­lion to IPIC or Aabar un­der the con­sent award and ad­di­tion­ally have a right to re­cover the $1.46 bil­lion al­ready paid,” he added.

Photo: Star On­line

Malaysian At­tor­ney Gen­eral Tommy Thomas.

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