Former Vice-Chancellor James McWha with Taib in 2011 (clutching a copy of the puff piece ‘Country Report’ by vanity publishers Oxford Business Group).  In the main picture Taib walks with McWha through the court named after him.

Five years after Sarawak Report first exposed Taib Mahmud’s questionable links with Adelaide University, the university has finally responded to calls to disown the former Chief Minister.

In a letter received today by the campaign group Bruno Manser Fund, the university’s Vice-Chancellor, Professor Warren Bebbington acknowledged a major policy reversal, in that Adelaide is at last reconsidering the naming of the ‘Taib Mahmud Court’, designated in the billionaire’s honour in 2008.

And, in a crushing snub, Professor Bebbington also revealed that the university had refused a request made by Taib to attend its 140th Anniversary Gala Dinner last year, effectively branding the former pupil as a persona non grata (unwelcome) at the university.

“The University of Adelaide has not received any donation from Taib Mahmud for nearly ten years”, the President and Vice-Chancellor wrote in a personal letter to BMF Director Lukas Straumann.

“Since then we have had no dealings with him and indeed, late last year, refused his request to visit and attend our 140th Anniversary Gala Dinner.

“I will draw your request for the University to rename the Taib Mahmud Court to the attention of our Estates Committee.

Winds of change

Students protested at the naming of the Taib Mahmud Court after SR printed its expose

The decision by one of Australia’s premier universities to disassociate itself from Taib in this manner – publicly turning down his request to visit – is a significant indicator of the growing understanding and concern in Australia over the corruption and destruction of Sarawak by its ruling family of the last four decades.

It is a far cry from just a few years ago, when Taib was treated as one of the University’s most distinguished former pupils; made patron of the Australian Universities International Alumni Association and bestowed with Austrailia’s highest honour, the Order of Australia.

Campaigners, who have protested the honours given to Taib, in return for financial donations, will be celebrating the success of their efforts, which were ignored for years.

These include sixteen Malaysian and Sarawakian alumni, who had written to the former Vice Chancellor Professor James McWha in December 2010 on the matter, only to be ignored:

“We are a group of Adelaide graduates from East Malaysia (the Malaysian states of Sabah and Sarawak). We are very concerned about the links between the University and Pehin Abdul Taib Mahmud, the chief minister of Sarawak. Abdul Taib is a law graduate and one of Adelaide’s most prominent graduates in Malaysia and the Asian region. He has donated millions to the university. He has also been awarded Australia’s highest award, the Order of Australia.

However, the reality is that Abdul Taib is also a kleptomaniac. He has been in power for the past 30 years in Sarawak and, on the best estimates, stolen or corruptly taken at least USD5 billion from the peoples of Sarawak. This fact is well known to many people, more so now that a website SarawakReport.com has published clear evidence of his corruption”, the former pupils complained 1st Dec 2010.

Protests took place last year

Students at the university, who had mounted a series of demonstrations are also believed to be jubilant at what appears to be a sudden about-turn of policy by the university.  But the sequence of events indicates that this had been a decision carefully arrived at in response to information received.

BMF had forwarded a copy of the book Money Logging by Lukas Straumann to Professor Bebbington and it was this that had prompted his clear response.

The letter in full

Today the Bob Brown Foundations Campaign Manager Jenny Weber said:

“Adelaide University needs to take real action and take Taib’s name off the university’s court.

“Lukas Staumanns book ‘Money Logging’ has provided the university with compelling evidence that Taib’s corrupt behaviour proves he is not an individual that an Australian university should associate with. Now to save further embarrassment from tainted association with Taib and endorsement of his appalling practices, drop Taib Court from the university grounds.”

The Tasmanian based environmental group also pointed out that it was time action was taken to remove the Taib family company Ta Ann, which is the major timber concern creating destruction in the island’s remaining wilderness areas.

Cash for honours

In our initial expose in 2010 Sarawak Report detailed how Taib had been increasingly honoured by the University of Adelaide in a clear response to large donations received from their ‘Ultra High Net Wealth’ former law graduate, whose family also owns the Adelaide Hilton and surrounding shopping parade in the heart of the city.

According to our research his first gift to the university was shortly after taking full control of Sarawak in 1987, when he helped to refurbish the Law School and ironically to establish the Australian Centre for Environmental Law.  In 1994 he was awarded an honorary Doctorship.

In 2002 Adelaide announced that Taib had generously donated AUS$300,000 over the years and that a small amount of that money had gone to the creation of a ‘Malaysia Room’ at the university.

Adelaidean 2002 – Taib has donated 300,000 to us in recent years

After this Taib expanded his ‘distinguished’ role in Australian academia becoming Patron of the International Alumni Association and Chairman of the Malaysia-Australia Foundation.  There are numerous Malays and Sarawakians attending Australian universities and Taib was being treated as their most senior, successful and distinguished representative!

Launch of the Malaysian Room in 2002

The accolades culminated in 2008 when a large chunk of Adelaide’s campus was named the Taib Mahmud Court in his honour.  Adelaide has so far refused to say whether this final gesture was in response to yet another donation by the Chief Minister, now Governor of Sarawak.

However, today’s letter indicates that the most recent donation was 10 years ago, therefore in 2005, later than the acknowledgement of $300,000 in 2002.  It therefore seems likely that there was a further donation between 2002 and 2005 which had precipitated the naming of the Taib Mahmud Court.

Having revealed the extent of Taib’s generosity to Adelaide back in 2010, Sarawak Report challenged the university to explain how it believed that such sums could have been obtained legitimately by a politician who has been on a public fixed salary for all but two years of his entire working life.

After all, Taib is well known to have attended the university on a Columbo Scholarship, confirming the well-known fact that he was one of ten children from a poor family.  His father was a carpenter working for Shell.

Arguments won through at Adelaide

Taib’s roles as Chief Minister and Governor preclude any involvement in business activities and his obligation is to avoid conflicts of interest with regard to concessions and contracts to family members.

Yet, to the contrary, there is abundant information that demonstrates that Taib’s acknowledged vast wealth has been obtained from the proceeds of corruption and abuse of power, much of it laid out in Sarawak Report and campaigned about by NGOs such as the Bruno Manser Fund.

For five years Adelaide refused to answer our questions or respond to information requests on the subject of Taib Mahmud.  But, at last their position has finally changed.

Increasingly, the world is no longer prepared to turn a blind eye to Taib and the wealth he has taken from the people and forests of Borneo.

Today, Lizzie Taylor, a student at the university who has campaigned tirelessly for the renaming of the Taib Mahmud Court told Sarawak Report:

“I am excited that finally the Vice Chancellor has listened to and payed attention to the ongoing campaign. This has been such a huge step forward .I am thrilled that the university is considering no longer having a courtyard in a learning institution honouring such corruption. “

In the family jet – Tufail will be questioned in the latest round of court actions by his former Sanyan business associate, who says he has driven him out of the company

The brother of Governor Taib Mahmud, Tufail, is due to appear in a Singapore High Court today to be questioned in a case brought against him by former business associates.

However, papers already deposited before the session in Court 5 contain a series of astonishing admissions by Tufail, where he openly details how he illegally evaded paying tax on his timber profits made out of Sarawak.

The complex case, which opened earlier this month, was brought by a Singapore company called Tanaka, of which Tufail is himself a director, against both himself and a fellow director of Sanyan Sdn Bhd, Dato Ting Check Sii.

The majority of the three shareholders of Tanaka are suing to be paid back money, which they say was lent to Sanyan for ventures in Sarawak on the understanding it would be repaid.

However, the minority director Tufail, who now controls Sanyan and has evicted Ting from his former positions in the company, is refusing to comply.

It was during his earlier, written submissions to the court over this dispute, that Tufail detailed how for many years he declared his sales on timber from the state at only a “fraction of the actual price” to the Malaysian tax authorities.

It means that the people of Sarawak were denied their rightful profits from this logging of state lands – concessions which had been granted to Tufail by his own brother the Chief Minister of the time

Tufail Mahmud’s tax dodging scams on Sarawak timber sales

Fruits of the forest – Tufail’s massive Sibu mansion built thanks to his privileged concessions handed from the state by his brother

Tufail’s tax-dodging scam, according to his own statement to the court, was to ‘sell’ the timber from his companies Sanyan Sdn Bhd and Sanyan Sawmill Sdn Bhd to a so-called ‘agent’ in Singapore, which in turn re-invoiced the end buyers in places like China and Japan for a much larger sum.

That ‘broker’, a company called Tanaka, turns out to have also been owned by himself and his business associates!

By this method (politely known as ‘transfer pricing’) Tufail and his fellow shareholders cheated the people of Sarawak out of tens of millions of ringgit of tax by hiding the extent of their real profits.

It is a practice that has been seen as commonplace for the major timber companies, who tend to habitually declare pathetic profits or even losses each year, even though Sarawak is still the largest tropical timber exporter in the world.

According to Turfail’s submissions, his bent business then used these secret profits to plough into other ventures in Sarawak, such as the Sanyan Tower in Sibu, in which they again enjoyed favoured status, thanks to the influence of Tufail’s brother Taib Mahmud.

This is how Tufail described what he was doing to the Singapore court:

Tufail is sued for breech of promise by his own company Tanaka (the Plaintiff) for breech of promise and explains his practices…….

Selling to his own company for “a fraction of the actual price” to “limit” his “exposure to tax liability in Sarawak, Malaysia”

The  un-repentent admission is likely to provoke outrage from ordinary Sarawak folk, who have seen endless favours granted to Taib’s family, only to be cheated further by such meanness in evading tax.

‘Transfer pricing’ was the practice spelt out by Taib family lawyer Alvin Chong in Global Witness expose

Taibs cousins explained how the family cheats in this secret recording

This flagrant practice of transferring profits away from Sarawak, in order to avoid tax, was of course described as a standard manoeuvre for Taib family hangers-on by cousins of the Chief Minister, when they were secretly recorded during a separate Global Witness expose back in 2012.

They and their lawyer Alvin Chong are seen on video laughing and joking as they tell an investigative reporter that no one who is ‘connected’ in Sarawak seriously pays tax on the lands and favours they have grabbed, thanks to their relationship to Taib.

This is because they only receive a fraction of the actual price of land and products in Sarawak – the rest is paid offshore, in such places as Singapore.

Taib family lawyer Alvin Chong explained the Singapore Scam (transfer pricing), while sneering at the ‘blind’ Dayak who fail to see they are being robbed by their leaders

The biggest victims of this tax evasion are of course the wider public, who are thereby deprived of funds for services like health and education.

Taib family members who received  these concessions, thanks merely to their connections, and at rock bottom prices, even evaded paying the proper amount on their resulting profits by this method.

In the Global Witness video the Mahmud cousins were not only caught discussing their scheme to evade taxies in this way (by likewise selling on an oil palm concession through Singapore) they chose to describe the native customary land owners of the territories concerned as “squatters”.

They also sneered at the local ‘nominees’ whom they had hired to disguise their shareholdings, calling them “one-eyed in a land of the blind” – a reference to ordinary folk, who do not realise how badly they are being robbed by the Taibs and others in power.

Secret timber concession

The Singapore court case is one of several waged against Tufail by former business partners and these have revealed another disturbing deception by Taib’s brother.

Tufail was also hiding his ownership of a lucrative timber concession granted by Taib, according to separate court papers. Sanyan Lumber Sdn Bhd was the name of the concession, which was the source of much of the money flowing through Tanaka Lumber in Singapore.

Morshidi bin Omar was a proxy to conceal Tufail’s timber concession – but Tufail was the signatory on the bank accounts!

Tufail is not listed as a Director or Shareholder of the company, however, his partner Dato Ting Check Sii, has confirmed that he was indeed the 50% shareholder, which provided the key source of timber behind Sanyan’s exports:

“In 1987, I set up Sanyan Lumber Sdn Bhd which was given a timber concession.  The shares of this company are held by me (50%) and Draman @ Morshidi bin Omar (50%) (as nominee of Datuk Tufail).  Datuk Tufail told me that he needed to use a nominee  because his brother was then and still is the Minister for Resource Planning.  Datuk Tufail now denies Draman is his nominee, even though Datuk Tufail and I are the only joint bank signatories for this Company”. [Submission by Dato Ting to Sarawak High Court]

In other words Mr Bin Omar was merely a nominee, of the sort described by Alvin Chong as a one eyed man in the land of the blind (meaning the Dayak of Sarawak, who were allegedly unaware how they are habitually cheated in this way).

In fact, Ting’s submissions to the court make clear that Tufail’s primary role in the Sanyan business empire was to make sure it obtained favour in securing those vital timber concessions from his brother. Tufail never actually did any of the work in the company and he never invested any of his own money:

Evidence from Dato Ting that Tufail was tasked with getting concessions off his brother for SWI (Sanyan Wood Industries)

Tufail himself has admitted to the court in his own written submission for the current case that he barely did a thing towards running the business itself:

Evidence from Tufail – Dato Ting is the 2nd Defendant, whom Tufail admits did all the work and invested all the money, even though Tufail was always a signatory to cheques and held the most shares… his only job was to get timber concessions off his brother!

How much was Tufail fined?

There is one major gap in the otherwise shockingly frank evidence given in this case by Tufail about his tax dodging, which is how much he was fined after he got caught?

Squeezed out – former partner Ting Check Sii is looking for the return of his investment

Taib’s brother admits in his evidence that in the late 90s the Malaysian finance authorities spotted what he was up to and proceeded against his company Sanyan.

The outcome was negotiated and the company was indeed fined for this illegal behaviour, according to Tufail’s own narrative.

But Mr Mahmud does not say by how much he was fined, leaving onlookers to speculate that Taib’s brother may have got off very lightly indeed.

After all, according to the court papers, Tanaka had secreted some USD$10million from under the noses of the Sarawak authorities by its false invoices and accounting and then re-invested it in the Sanyan Tower and other enterprises.

These enterprises remain in the hands of Tufail, so how much was he actually forced to pay back?

Don’t the public have a right to know if a settlement was reached that was below the amount he would have paid had he honestly declared his taxes?  Under normal circumstances Sanyan ought to have paid a substantial fine of top of the taxes, after all.

Breech of promise along with tax dodging

Amongst the sorriest victims of Tufail’s activities have turned out to be his own former business partners, according to the submissions in this and other cases between him and fellow directors in Malaysia.

Sanyan Tower – Sarawak’s tallest building, built from money hidden from Sarawak’s tax authorities and now home to several state government offices in Sibu

Those entrepreneurs, who needed to give a majority share of their business to a lazy Mahmud family member, in order to have a chance to get concessions and do business in Sarawak.

After their usefulness was over and the business was built, their submissions complain that Tufail squeezed them out like a cuckoo in their nest.

In this latest Singapore complaint Tufail stands accused in a complicated claim of a breech of trust for not having fulfilled an alleged commitment by Sanyan to pay back the money invested from Tanaka within 18 years (a period now expired).

But from the point of view of people in Sarawak, the real outrage is the way this case reveals, yet again, how the state has been corruptly managed by Taib Mahmud for the benefit of his own family businesses.

So far all the legal actions against Tufail have been lost in the Sarawak courts, perhaps unsurprisingly given the Taib family’s influence.

It remains to be seen whether the case in Singapore will obtain a long awaited victory for his discarded former business partners. It’s clear that even the winners in Taib’s Sarawak are in danger of becoming losers, unless they are part of the Taib family themselves.

Snubbed again – Taib had expected full support for his barmy ‘master plan’

SCORE is quite simply the most ambitious industrialisation plan in South East Asia.

It is a vision of concrete, cables and cement in the heart of the most important rainforest in the world, with 12 proposed mega dams producing what is cynically mislabelled as ‘clean energy’.

Governor Taib likes this vision of cement, because he has obtained a monopoly on it for his family in Sarawak, by privatising CMS into their own hands.

CMS is also the main construction company for roads and factories, thanks to state contracts.

As for the transmission lines from all those proposed dams, Taib’s cousin is chairman of the state electricity company which is driving the project and his son owns the cable companies receiving all the contracts his cousin is handing out.

Taib’s protege, Adenan Satem, has been obliged to continue the strategy of driving through SCORE as part of the deal to succeed him as chief minister. The plan will destroy Sarawak’s main rivers and displace tens of thousands of indigenous people, who are implacably opposed to the whole project.

Taib plans to push RM334billion of public investment through SCORE – is he planning on getting his usual 30% ?

So, as Doctor Mahathir said in his speech to this week’s so-called International Energy Conference in Kuching, there are probably better development alternatives from the point of view of every other family in Sarawak – apart from the Taibs and their hangers on at CMS.

The Dr has reservations – being shown around by Taib’s top flunky, the newly wealthy Awang Tegah

What a shock this must have been for his Sarawak PBB hosts, who had regarded Dr M as their star guest and ‘key note speaker’ at the conference.

It was like the Best Man at a wedding warning the bride to run a mile!

But Dr Mahathir has reached a stage in his career where he clearly feels no constraints on saying what he thinks.

He also cares more about his country than his own bank balance, according many round about him – something that no one has ever knowingly said about Abdul Taib Mahmud, for whom Sarawak has become a private ATM.

What Dr M said to Sarawak Report about SCORE

The former PM had in fact defended the development of dams in Sarawak in the week previous to his Kuching speech, when he granted Sarawak Report an interview in KL.

Handed the book Money Logging by SR – he seems to have opened it.

After all, this old UMNO warhorse is as implicated as anyone in the building of the existing Bakun Dam, which is already producing more electricity than there is present need for in Sarawak (the latest information from Sarawak Hydro is that 7 out of 8 of the Bakun turbines are running, but only at half capacity, generating at most 1,900mg out of the 2,400 it was built to supply).

So no surprise that Mahathir repeated the same attacks on western critics of Malaysia’s environmentally destructive history of development policies which he has employed throughout his career.

When Sarawak Report asked about the rights of the native people of Sarawak he attacked other historical crimes by comparison:

“We have a good record of managing [the rights of indigenous people] – much better than the decimation of aborigines and native Americans. Our aborigines have increased in number since we took over the running of the state” he claimed. “We have done better than the West in helping people adjust”

It is a figure that environmentalists will dispute and the ex-PM was giving modern Malaysia a very low benchmark by making a comparison with such appalling historical exterminations.

However, he was giving no quarter to outside critics on such matters, on the basis that Malaysia needs “space” for modern agriculture and businesses –

“we need land in order to plant a crop that can earn us some money”

“They [native Sarawakians] don’t seem to mind about not being allowed to live in the jungle” he opined of logging and plantation on state and native lands, “it is outside people who come and tell them look you are being deprived”

So far indeed, so Taib would agree with his former political colleague.  However, Sarawak Report then challenged Mahathir on the issue of corruption:

“If you look at an argument about development, for example, where both sides have a justifiable position, but if you see that one side has a conflict of interest, because the position they are promoting benefits them financially, this in our view [Sarawak Report’s] should be exposed, do you sympathise?” we asked.

Dr Mahathir was adamant in his reply:

“Corruption should be exposed, I agree with you. Indeed there are things that are being done by the government which they shouldn’t do”

When pressed further about SCORE itself, the retired PM acknowledged he was not yet fully informed. “I do not know  about the extent of the forest that will be inundated” he said, the week before the Kuching Conference.  However, “I think there has to be a balance in the way we think of our forests .. excess cutting is something I am not for and very much against. Whether it is legal or illegal, I think even the ‘legal’ [logging] should be reduced, because it is destroying the environment”.

Was the Kuching International Energy Conference a turning point for the credibility of SCORE?

Look how we planned to destroy the jungle! Taib, Awang Tengah and PM Najib Razak unveiling the world’s most depressing painting

It is clear, therefore, that in the days before he was due to speak at the Kuching Energy Conference about SCORE the retired PM did his homework.

He must have looked into the full extent of Taib’s pet ‘master plan’ that, for far too long, Malaysia’s Federal Governent has been pleased to leave to the world’s most autonomous state leader.

After all, SCORE makes Bakun, which till now was the biggest dam project in South East Asia, look like just a brick in the wall.

And economists around the world are starting to scratch their heads and wonder where on earth is the economic rationale behind this orgy of proposed construction and where the clients are going to be coming from?

Campaigners, who had become alert to ‘Dr M’s’ more open mind, in comparison to the single tracked and frankly greedy determination of Taib to push ahead with this project, sent materials and a letter explaining the unnecessary extent of all these plans and the greedy, selfish motivation behind it.

Dr Mahathir must have read these materials and clearly the matter resulted in him giving a speech that no one expected, not even Sarawak Report towards which he had presented a considerably different perspective the week before.

If Dr M can re-think why can’t PBB/Sarawak BN?

Dr Mahathir, after a lifetime of supporting development and attacking foreign critics, clearly considers that SCORE needs a re-think and he called for the sort of common sense that all objective people have been begging for in Sarawak.

This is the biggest proposed industrialisation project in South East Asia and yet it has been developed virtually in secret and with the minimum input of technical know-how from outside of Sarawak.

Where has been the debate, the due consideration, the open planning and expertise?

More fantasy factories, but economists are asking where are the real ones?

This is all the project of one old man in a hurry, who will brook no opposition or changes to his grand plans to turn Sarawak into a Legoland of projects all pouring out billions of dollars for companies controlled by his family.

His vision is to drive all the wealth of Sarawak’s natural resources into an offshore portfolio that he presumably plans to control when he retires from his mortal coils.

The Pharaohs built pyramids and the world is littered with similar White Elephants demanded by dictators – SCORE has all the classic hallmarks yet its scale is appallingly destructive in such a priceless region of the world.

Of course, the international delegates to the Borneo Convention Centre (built by CMS and run by Taib’s sister) all brought their own greedy, blinkered agendas to Sarawak.  Each had been willing to turn a blind eye to the shocking corruption and shortfalls within this project and they will have been every bit as disappointed as Taib to hear Dr Ms words.

Mortified by the words of caution from UMNO’s most influential public figure, the Sarawak State Government has now announced that it will now look at some of the more eco-friendly alternatives for generating power suggested by Dr Mahathir.

Will this produce a turning point for SCORE?

Will someone now remove Taib’s Lego set, sweep away those plans for 12 new mega-dams and tell him to leave such matters to the experts and the fuller course of time?

Sam Mannan’s secretary Magdalena (Mag) Maikas has received some interesting privileges

How is it that the family of the secretary to the Sabah Director of Forestry, Sam Mannan, has ended up with a whopping great logging concession in a once protected forest reserve?

Sam Mannan has promoted himself as a man who is struggling as best he can to conserve what is left of Sabah’s Forestry, after years of plunder by the politicians he has been working for and their cronies.

He has explained that in doing so he has to be ‘pragmatic’, by which he means that the remaining depleted forest reserves need to be subjected to what he describes as ‘mosaic plantations‘.

This involves permitting a chequer board of oil palm concessions across the approximately 300,000 hectares of remaining natural forest areas in the state.

Foreign PR – Mannan (left) with Prince Charles at WWF ‘Environment Conference’ in London

The initiative has released huge territories for clear fell logging right within protected areas and it is a system that is notoriously difficult to monitor and protect from illegal encroachments beyond the licensed boundaries.

Mobile saw mills have also been allowed to operate within these remote regions under this scheme, which again are virtually impossible to monitor.

Critics say the impact will be disastrous therefore and that Mannan is generally playing up to foreign environmental groups on the one hand, with much talk of conservation and ‘forest management’, while finding new ways to open up even more logging in once protected areas on the other.

Among the favoured companies which have been given licences to indulge in this so-called ‘mosaic plantation’ activity are an outfit called Rinukut Sdn Bhd and also TSH Resources, which is owned by the well-connected businessman Dato Kelvin Tan.

Magdalena Maikas is Sam Manan’s secretary at the Forestry Department

Mount Magdalena!

Mag’s Garden – entrance to Sabah Forestry Dept

So, what has this to do with Mannan’s secretary, who is generally known as ‘Mag’?

Magdalena Maikas, who comes originally from Tambunan, according to her Facebook entries, has worked for some time at the Forestry Department and is known to be extremely close to her boss.

Indeed her sway is so absolute in the department that the lawn outside has even been named in her honour.

A special plaque has been erected in the past year, designating the entrance to the Forestry Department “Mag’s Garden – Established 2014″!

Less amusement has been caused by a further renaming of a protected area of Sabah’s Northern Gunung Rara area, which was gazetted as “Mount Magdalena” in 2012.

Mount Magdalena is now billed as consisting of high conservation value Forest Reserve Class 1 Forest – but it previously appears to have been used as commercial forest, which indicates that it is fact a piece of degraded territory now being promoted as if it was virgin forest protected by the state, something critics again say has been common practice under Chief Minister Musa Aman’s management:

“Mount Magdalena FR was gazetted as a Protection FR – Class I on 14^th November, 2012 vide GN 7/2012. It was formerly under Gunung Rara FR, which is a commercial FR – Class II. Gunung Rara FR is under the Sabah Foundation (SF) Concession Area.”[Sabah Forestry Department]

Newly protected forest area named after Magdalena in 2012

However, it is evident that the privileges of Mag Maikas do not end with the designation of gardens and mountains in her fair name.

Records show that the Maikas family have also popped up as major timber concession holders.

And, according to police reports lodged by opposition assemblymen in 2013, it is thanks to Sam Mannan’s ‘mosaic plantation’ initiative that the concession was awarded.

The Assemblymen queried why timber royalties in the state have been plummeting, while logging is evidently going up, largely thanks to the mosaic planting initiative in once protected areas?

They named the company Rinukut Sdn Bhd as one of the companies, which has received a 5,000 hectare oil palm concession in these valuable timber areas:

Approved April 2013

Who owns Rinukut Sdn Bhd?

So, who owns Rinukut and the rights to fell valuable timber in once protected areas and to replace it with oil palm?

Both Bedi and Lemoi live together in Tambunan

Posing with their family on Facebook. Bedi (in yellow front) is Mag’s brother and Lemoi (front) his wife

The company records of Rinukut show that 30% of the company is owned by none other than Mag’s brother Bedi bin Maikas and a lady who shares his address in Tambunan, called Lemoi Binti Masilim.

Facebook searches make plain that Bedi and Lemoi are married, but how did this modest couple come by such a valuable timber and oil palm concession?

Facebook searches also make plain that Mag Maikas and Lemoi and Bedi are all in touch and close pals, which is not surprising as they are in-laws.

Which leaves plenty of questions to be asked about what the connection might be between Mag, her boss Sam Mannan and this lucrative timber concession?

Mag Maikas comes from Tambunan, works at Sabah Forestry and her top Facebook friends are brother Bedi and wife Lemoi.. who have 30% of a whopping forestry concession

After all, the remaining 70% of the company is owned by a far more well known entity, which is none other than Dato Kelvin Tan.

Tan’s company THS Biocode Sdn Bhd is part of the THS Resources group, which also has invested in other vast areas of oil palm concessions, obtained through the Sabah Forestry Department which Sam manages.

Surely, it could not be the case that Tan has obtained this concession by giving Directorships and 30% of the company to the immediate family of the secretary of Sam Mannan, whose closeness to her boss has been a matter of considerable comment in the Forestry Department, not least because of the gazetting of a mountain after her name?

Sam Mannan may posture as a reformer of forestry in Sabah, but until the records are opened up with regard to how concessions are awarded and for what price there is no way to monitor the corruption taking place.

Sarawak Report charges Manan with conflict of interest in the awarding of this particular concession to the family of his secretary and we challenge him to publish the details of the entire transaction over this piece of public property.

Mag’s brother and Facebook friend – is he a timber tycoon or just a nominee…. if so, who is he really a nominee for?

Bedi’s wife Lemoi is a ‘stay at home mum’ and also a timber boss?

NOTE: Following this article’s publication Ms Maikas has removed her Facebook presence from the internet and been expunged from the friend section of Bedi and Lemoi – however the MACC ought have no problems with establishing the connection between her brother and herself.

Chief Minister Musa Aman (centre) and his Forest Department Head Mannan (right) control Sabah’s timber concessions

Forestry Chief Sam Mannan was reportedly hauled in last week by the Sabah Chief Minister, Musa Aman, to explain how the family of his long-term secretary had come into the possession of a major timber concession, as exposed by Sarawak Report.

The concession, controlled by the company Rinukut, is located in one of the highly controversial ‘mosaic’ plantations, which Mannan has opened up within once protected forest areas.

Rinukut’s shareholders are Mannan’s secretary’s brother and wife, along with the businessman Kelvin Tan.

“Musa is furious, because he did not give permission for this” an insider has told Sarawak Report, “Mannan is in deep trouble”.

However, the there is plenty of evidence to show that Mannan’s boss, Musa himself, is equally feeling the heat at the moment, given the mounds of dodgy timber concessions and tens of millions in kickbacks that clearly go back to himself.

Musa’s claim he had ‘no business dealings’ with Michael Chia have been shot through, not least by evidence that Musa’s sons were getting money straight from Chia’s bank accounts

A large dossier of evidence drawn up by the MACC, which related to Musa’s multi-million dollar dealings with the front man Michael Chia, has only failed to come to court because the Attorney General, who happens to be Musa’s family member, refused to take action.

Chia himself has been sentenced to jail and a lashing on a related case, which he is appealing against.

Sarawak Report has documented a great deal of this evidence against Musa, including the fact that Chia-controlled HSBC and UBS bank accounts in Singapore, which were receiving millions from Sabah businessmen as payments for “logging concessions”, were at the same time making regular payments to the Chief Minister’s sons in Australia and the person looking after them.

Before the last election BN’s federal leaders got Musa Aman off the hook on this matter by declaring that these vast sums, which it could not be denied had been embezzled, were not for his private use, but for party political expenses.

BN have been arguing on this basis that the theft was legitimate!

The party’s control of the legal system has enabled this preposterous excuse to so far rest unchallenged, even though it is clear that even this is untrue, given Musa’s family’s personal use of the accounts in question.

But, although he remains uncharged, Musa is clearly damaged goods and the Federal authorities and his local colleagues are aware of the fact.

Musa ‘promised to go’, but he has been clinging on

Inappropriate management – both Musa and Mannan have posed as forest defenders, but their decades of control have been disastrous for the region

Political insiders have told Sarawak Report that Najib Razak told both the Sabah and Sarawak Chief Ministers they had to leave their posts at the same time last year, when the three leaders linked together at the opening of the Brunei bridge in December 2013.

Both men have been fully exposed for their outrageous kleptocracy and were making it hard for BN to maintain credibility, despite their ability to deliver seats through East Malaysia’s rotten rural constituencies.

It is a matter of record that Taib has now succumbed to that pressure, having managed to parachute into the Governor’s chair and place his close political ally Adenan Satem in situ this time last year.

Musa, however, has been clinging on for as long as he can.  But now, many believe his days are numbered in weeks rather than months, because support has been evaporating at local party level and he has lost the confidence of his federal party VPs.

The latest timber concession scandal now surrounding Musa’s Forestry Head, Sam Mannan and his extremely close personal assistant, Mag Maikas, will not aid his position:

“Only 4 out of 21 BN divisions in Sabah still back him [Musa]” one well-connected contact within Sabah BN has told Sarawak Report. “And 40 out of 60 Adun in Sabah do not support him.  Federally, he has lost the support of the party Vice Presidents and also the party Secretary General, Tengku Adnan. He is heading for the rocks”.

He bought a Rolls Royce in anticipation, but didn’t get the job!

Delivered November 2014 for the Governor, who unexpectedly stayed on for another term after 31st December.

One problem for Musa is that he has failed to mirror Taib’s crawl upstairs into the post of Governor, an office which has been wrongly touted as providing immunity for crooks.

The incumbent Sabah Yang di-Pertua Negeri, Juhar bin Mahiruddin, was due to end his term of office on 31st December and it was reportedly hoped by Musa that he could get Federal BN to give him the position of Head of State.

The Chief Minister even went so far as to order a brand new Rolls Royce for the Governor, in anticipation of inheriting it as he stepped into the role!

However, 31st of December came and went, because the Governor has been reinstated into a further term of office, leaving Musa with no Rolls Royce and nowhere much to go either as his enemies circle with increasing impatience.

All Mag’s friends and relatives with jobs in the Forest Department

Mag Maikas rules the roost under Sam Mannan say Forestry insiders.

Meanwhile, the perks and benefits surrounding Sam Mannan’s secretary in the Forestry Department are receiving ever more scrutiny.

Colleagues have complained about the almost total power the woman appears to wield in this public department, thanks to the influence she had over her boss with whom she is known to have had an unusually close relationship for many years.

In particular, Mag has been able to find jobs for large numbers of her immediate and wider family in the Department, which has further strengthened her unhealthy control – she has already had a mountain and a garden named after herself, as well as obtaining a valuable timber concession for her family from the state.

Relatives whose names pepper the Forest Department Directory of Staff include Daphne Robert, her daughter; her sister’s son Herdarius Gaidim; two relatives from her home town of Tabunam, nephew Berstein Hilarius and niece Jannet Hilarius – all four of whom are working in the Sustainable Forest Management Department.

Mag’s daughter Daphne is friends with her brother Bedi and has a job in the Forestry Department… like most of her family.

Three of Mag’s nieces all in the Department – all her brother’s Facebook friends

Working in the Department for Investigation, Enforcement & Prosecution is another family member, nephew Bernstein Hilarius’s wife, Jennifer Amora.

Mag’s nephew and wife both have jobs in the Department.

Meanwhile, in the Finance & Budget Department are her brother’s daughter (he of the timber concession) Dymphna Bedi and another family member Marcella Philip Tutus.

Over in the Department of Economy, Industry & Statistics is Melcesza Soo, another relative. And her brother’s other daughter Jane Bedi is working in the Sandakan District Office.

Another of Mag’s nephews working in the department is Julius Goidim.

In the Sook District Forestry Office it is her sister’s son who has a job, one Julius Goidim.

Fishy goings on right to the very top in Malaysia – Najib with his bodyguard Sirul, who murdered the woman who was claiming to have been his boss’s mistress. Why did Najib interfere so much in the trial?

Musa Aman and his colleagues can hardly complain about such nepotism and corruption – it is the style of government which they have employed themselves and their underlings are just following the appalling example they see before them.

He should not expect them only to be corrupted when they have gained his permission to be.

After all his own bosses are the people themselves, from whom he never asked permission either and all are now whispering that it is not a question of if he will go, but when?

One thing only may delay this imminent fate.  Musa’s own political boss is now himself hanging by a thread of his own making.

If Najib is destroyed by his own malpractices over 1MDB and the Altantuya murder trial then Musa may carry on for longer than he might otherwise have had reason to hope!

Aziz, Partner Joey McFarland and Jho Low launch Wolf of Wall Street – but JL denies financial involvement

Will Riza Aziz be making libel threats against the New York Times today, after an article that delves into the US spending sprees of his friend, the Malaysian financier Jho Low and questions the source of his extraordinary wealth?

After all, the New York Times has repeated and corroborated every single point that has been reported in this portal about the PM’s stepson’s funding over the past year and confirms the ties between his Hollywood production company Red Granite and Jho Low.

The newspaper has made a further significant revelation, which is that the Hollywood Mansion that Sarawak Report identified as belonging to Riza Aziz was in fact bought by Jho Low and there is no proper record of any further sale.

This raises questions about bribery in Malaysia and about tax evasion in the United States, which are both serious criminal matters.

Complaints by Riza’s lawyers proven unfounded

It is revealed this flat was also originally bought by Jho Low

When Sarawak Report first raised the matter of the close ties between Jho Low and Riza Aziz a year ago his lawyers threatened to sue for libel, unless the articles were immediately removed.  We refused.

In two long letters authorised by a senior partner of the law firm Loeb & Loeb, Channing Johson, Riza denied what he called “the strong insinuation that Jho Low ..is a financial investor in the Picture [Wolf of Wall Street]”.

Yet, today the New York Times confirms that numerous Hollywood players have testified they were openly introduced to Jho Low as being the financier of Red Granite Pictures and that this public acknowledgement only stopped after the articles published by Sarawak Report. Low even received a special credit of thanks at the end of the film Wolf of Wall Street.

No evidence of a sale since the newly wealthy Low bought the Hollywood house in 2010

The lengthy and wordy letters from Loeb also denied Sarawak Report’s research into Riza and his partner Joey McFarland’s meagre film-making experience, claiming for example that McFarland never worked as a party talent booking agent, hiring Paris Hilton to attend Low’s parties.

Yet again, the New York Times repeats this claim.  So, we ask, will Riza and his colleagues also set about threatening the New York Times with libel action?

Property transfers

Far more significant and serious with respect to the law in the United States, is the matter of the ownership of the Hollywood mansion at 912 N Hillcrest Road, Beverly Hills.

Sarawak Report established last year that it belonged to Riza Aziz, but in their deny-all-letters his lawyers claimed that the article “contained false statements” including “that Riza Aziz purchased the property in September 2010: This statement is untrue” thundered Loeb.

An acknowledgement that Aziz did not purchase the house?

Yet in the very same letter the lawyers also criticised Sarawak Report for trespassing on their client’s property in order to take photographs of 912 N Hillcrest Road and now the New York Times have confirmed that both Aziz and

The last recorded sale, as the NYT points out, was in 2010 to the company Low admits was his.

Jho Low have acknowledged to the paper that Aziz is indeed the owner of the house.

Moreover, the Times has further established that the original buyer of the house was none other than Jho Low himself.

This is now admitted to the paper by both men, who claim Low originally bought it then sold it on to Riza Aziz.

So is the reason why Riza’s the lawyer claimed that Sarawak Report’s article was false, because we did not register the correct date of the secret sale, giving only the date of the clandestine earlier purchase by Jho Low, who was hiding his own identity behind a shell company called 912 North Hillcrest Road, incorporated in Delaware?

If so, the ‘vendor’ Jho Low and ‘purchaser’ Riza Aziz have an awkward situation to explain, because the second alleged sale, from Jho Low to Riza, is not registered officially in California, which is a legal requirement because such transfers of ownership involve paying a substantial amount of excise tax.

Or is there a separate reason, also indicated by the careful wording of the Loeb legal letter to Sarawak Report, which is that Riza never actually “purchased” the house at all, because he just moved in without buying it?

“Your article contains the following false statement amongst others That Riza Aziz purchased the property on North Hillcrest Road in September 2012: this statement is untrue” [letter from Loeb & Loeb]

In which case the two party-loving gentlemen have issues to address back home on the subject of bribery, given Riza’s Dad’ position as PM and Jho Low’s clear and persistent dabbling in the investments of the sovereign wealth fund 1MDB, which Riza’s Dad is in charge of and which is currently heading into financial disaster.

Paid party guest – Jho Low in flamboyant mode

And, they have issues to address in the US, because even if you give a mansion to a pal in the United States there is still a matter of taxes to be levied on such donations and transfers of ownership.

If, on the other hand, there was a sale, as now claimed, where is the evidence of the property transfer and tax payments, because no sale has been recorded in the records?

What’s more, according to the Times, the pair have also admitted that Riza Aziz’s flat in New York, bought for a staggering $33.5million, was likewise sold on to him by Jho Low, in what the New York Times describes as an “opaque” deal.

Indeed, this is the same pattern of ownership transfer that Sarawak Report has identified taking place between the Yaw family, who own the vast timber company Samling, based in Sarawak, and the family of ex-Chief Minister Taib Mahmud.

Taib’s own family was in business with Low during 2008-10 as joint owners of UBG bank, before a surprise buy out by the company PetroSaudi.

Once again, Taib’s lawyers are huffing and puffing at Sarawak Report and the NGO BMF, claiming that a perfectly legitimate sale took place between the two families of two mansions at “full market price”.

Yet there is no formal record whatsoever of this alleged sale from Samling to the Taibs in the relevant Seattle property records or that the appropriate excise tax was ever paid for the transfer of ownership [expect more on this matter in later editions of Sarawak Report]:

There is no record of the transfer of the Seattle property W A Boylston between the date the Samling Yaw family incorporated it at zero cost in 1991 (because they still owned it) and the date the company was sold by the Taibs to a third party after our expose in 2012.

Questions for Riza’s lawyers and accountants

These are all issues which ought of course to have been pointed out and dealt with by Riza’s Los Angeles lawyers, who were instead busy accepting fees for writing misleading letters.

The wife of the Loeb Partner, Channing Johnson, was after all the personal wealth management advisor to Riza and  her own firm NKFSB had confirmed to Sarawak Report last year that 912 Hillcrest was Riza’s house.  At the very least Debra and NKFSB ought to have advised Riza to register the sale and pay his tax.

It is a matter of record that after Sarawak Report exposed the above cosy arrangement Loeb & Loeb resigned as Red Granite’s lawyers in this matter and Debra Johnson also resigned her long-held position at NKSFB.  She continues as Riza’s private financial advisor.

1MDB Connection

Funding for Red Granite has not been a problem in cash strapped Hollywood

The New York Times article also reiterates what Sarawak Report has reported over the year about the financial connections between Jho Low, 1MDB and the son of 1MDB’s Chairman, who is the Prime Minister. The paper raises the fishy nature of the coincidences that this secretive fund is refusing to explain.

The CEO of Aabar Investments, which has close business ties with Jho Low and 1MDB, has finally ‘fessed up to being the actual backer of Red Granite Pictures and  The NYT also confirms that Low, Aabar and 1MDB were involved together in bidding for the Claridge’s Hotel Group in London, as reported by Sarawak Report last year.

And the coincidence of Jho Low’s involvement in Majestic Masterpiece, a company that part bought up Taib Mahmud’s UBG Bank in 2008, before PetroSaudi finally parachuted in to buy out the whole concern in 2010 at a top dollar price, is also flagged up, by the NYTimes.

Sarawak Report broke news of this purchase of Dustheads by Low

This buy out of UBG by PetroSaudi happened shortly after the company received a over a billion dollars of investment from 1MDB.

Given there is so much secrecy in the management of the accounts of this public concern no one yet can tell if funds from 1MDB were channelled through PetroSaudi to pay for the deal that so benefitted the Taibs and Jho Low.

What the world has been told is that those funds are still sitting in the Cayman Islands but that it is proving impossible to bring them back to help pay debts owed by the struggling fund. The current reason being given is the weakness of the dollar.

The world has also been repeatedly informed that Jho Low has nothing to do with 1MDB’s investment activities and he has never taken any profit from this sovereign fund.

Yet the NYT confirms a Sarawak Report article in September, which pointed out that numerous 1MDB emails seen by this blog show that Jho Low enjoys a hands on role at the fund. The Times claims it has spoken to three contacts close to 1MDB who confirmed off the record that he has “regular dealings” with the fund.

[See today’s press statement by MP Tony Pua]

From party ‘concierge’ to ‘billionaire philanthropist’ in 5 heady years since the launch of 1MDB

Stadlen poses drink in hand in Calvin Klein party shirt.

The ex-APCO Malaysia boss, Paul Stadlen, who now manages Najib Razak’s massive press operation, appears to be losing his touch.

Many are asking if his well-known party lifestyle, fuelled by what seems to be an outrageous income courtesy of the Malaysian taxpayer, could have something to do with it?

Yesterday was a bit of a classic, with the issuing of a Government statement by the Prime Minister’s Office (where Stadlen controls communications) which maliciously stuck the knife into the opposition leader Anwar Ibrahim, just controversially imprisoned for alleged sodomy.

Stadlen’s short statement sanctimoniously referred to an “exhaustive and comprehensive due process” in this case of blatant political persecution and then went on to describe the plaintiff as the “victim of a serious sexual assault”.

Ooops! ……

As commentators as far away as the New York Times pointed out, even the Malaysian prosecutors had had to give up on their attempt to convict Anwar of forcing sex upon his burly young aide, who had long since changed his story to one of consensual sex between the two men:

“..the statement read. “As the victim of a serious sexual assault, he had every right to have his case heard in court.”

That characterization, however, was at odds with the case brought by the prosecutors, who used a section of the law that deals with consensual sodomy” [New York Times]

So why was Stadlen falsely accusing the opposition politician at this very delicate moment (in a formal Government statement) of committing brutal rape?

Stadlen’s business card

Was it because he was seeking to find sympathy from an international audience, which is largely shocked at the primitive decision to imprison someone just for being allegedly gay?  If so, surely this experienced PR operator would have realised that too much is known about the case for such false accusations to gain currency?

Or had Stadlen just being doing too much partying the night before and not really been on the ball?

Because, to misrepresent the situation in such a vicious and deceptive manner can only bring opprobrium onto his boss, who presumably had hired him (at huge cost) for his supposed understanding of the international press and how to manage it.

Partying and a bloody beating for fun-loving Stadlen

Stadlen is known as a man who is pleased to party and enjoys his late night drinking in a wide selection of KL’s top night club venues

There has been considerable bad feeling around Putrajaya about the continued prominence of Stadlen in Najib’s office.

After all, APCO itself was dismissed from its advisory role some years back, on the admittedly reprehensible grounds that the company was ‘Jewish’ and Malaysia is hostile towards Israel.

However, the boss Paul Stadlen kept his position and has continued to manage to get reportedly enormous sums of money as a consultant, effectively supervising all the Prime Minister’s communications.

Insiders have told Sarawak Report that his company, which is located just a few doors down the corridor from the PM’s own National Communications Team in the Menara BRDB office block in KL, is retained for at least RM 3,000,000 per year’.

As one journalist who is a close observer of the team, explained to Sarawak Report, this retainer is:

“..for some main activities. That is for doing all work for the PM – from normal things like speech writing to arranging interviews with foreign journalists. Also for this money he does many things like defaming Anwar to foreigners, smearing Dr M and such like secret projects.

“He hires other people to do all this work for him – usually he has 2-3 people he gets to do all the work… but he pockets the vast majority of monies.”

Stadlen has also worked with FBC Media after his APCO role, who were in turn linked to vicious online campaigns against Anwar by the now discredited US blogger Josh Trevino and his company Rogue Communications.

Amongst such people hired to do the spade work is the recent addition to the team, a former Brunswick UK associate and fellow British national, Arif Shah.

Arif Shah, hired to be in charge of 1MDB’s ill-fated IPO attempt.

Arif Shah was hired by Stadlen mainly to work on providing positive PR for the disastrous 1MDB ‘sovereign development fund’, according to internal documentary evidence seen by Sarawak Report, and to control communications surrounding the increasingly unlikely attempt to launch an IPO in order to rescue the fund, which is mysteriously missing millions of dollars.

Known as ‘Project Virtus’ this PR commission was worth an additional RM1.5million or so to Stadlen’s company, according to those in the know. A briefing paper describes its sensitivity in the following terms:

“Events of recent months have made it clear that Project Virtus will be subject to greater scrutiny than any IPO in Malaysia’s history. The involvement of various stakeholders, the sensitive nature of the transaction, and the restrictions associated with the marketing of shares mean it is imperative that we manage any enquiries with the utmost care.”

In which case, was party man Stadlen really the outfit to choose, as always, to front up the job?

“Stadlen has terrible party lifestyle”, confirmed one of many commentators on the subject to Sarawak Report. “It’s incredible he gets away with it, working for a Muslim head of government. He’s always out partying in bars, clubs getting dead drunk.”

Clubs such as KL’s top hotspot Zouk host regular tables for Stadlen, known as a lady’s man, who has clearly enjoyed his sudden cash and finds plenty of time and things on which to spend it.

Stadlen with his office receptionist

It is a life-style that appeared to culminate in a extremely sticky and unhappy scenario in the run up to Christmas last year, after the PM’s PR chief committed the ultimate breech of potentially becoming news himself, when an apparently disgruntled rival beat him up inside a lift in a very brutal incident in KL.

People in the know say an iron bar was involved and it was an attack in which he was badly hurt.

This being Malaysia, it was an incident that Stadlen was able to keep out of the papers, although plenty of journalists know about it.

Yet, this is the man who needs to command the press machinery for a Prime Minister facing one of the toughest PR situations imaginable worldwide.

No less than two suspicious recent court cases, appear to point back straight to Najib, namely the Anwar conspiracy issue and the Altantuya murder case.

And then there is the sizzling red hot potato of 1MDB festering in Stadlen’s stated portfolio of responsibilities, where a sober presentation is what is most needed in order to convince sceptical investors that boss Najib is to be trusted with their money.

Najib ‘inherited his wealth’

Stadlen is enjoying his salary, but is he concentrating on the job in hand?

Instead, Stadlen has been responsible for an even worse faux pas in recent days, with respect to his own boss’s direct reputation, owing to an incredibly mishandled response to a series of questions again by the New York Times.

The matter has been glossed over again in the media, but it has torn into Najib’s relations with his own family and close circle.

Because, in this instance Stadlen responded to a query about Najib and his wife’s major conspicuous spending, by saying the Prime Minister had inherited his wealth.

The article, which appeared on Monday, related to Jho Low, 1MDB and the tycoon’s property wealth in the US and his links to Najib and Rosmah and her Hollywood producer son Riza Aziz:

“Mr. Najib’s office, in a statement, said, “The prime minister does not track how much Mr. Aziz earns or how such earnings are reinvested.” As for the prime minister himself, the statement said he had “received inheritance.” [New York Times]

This misjudged claim about inherited wealth attracted immediate comment in Malaysian political circles and it has prompted hostile reposts from Najib’s own brothers, who are said to be outraged at the implied slur against their father Tun Abdul Razak, who was also Prime Minister, having risen from a life in the Civil Service.

Childish behaviour by the PR guru behind 1MDB?

The family have rallied to confirm that Abdul Razak was an honest PM, who lived modestly and did not leave a fortune.

By contrast, Najib and his wife Rosmah particularly are notoriously lavish big-spenders and there is now pressure on Stadlen to repair the damage to the family reputation.

As crises talks continue on this thorny family matter, thought has been given to suggesting that Najib’s money was inherited from the Noah Foundation, instead.

But, observers say that this is not true (except for their education, Tun Noah left money to his foundation not his grandchildren).

Moreover, to attribute money to Noah would give rise to equally awkward explanations, because Najib’s maternal grandpa Noah made his money out of starting the Genting gambling empire!

In short, Stadlen has landed Najib in it and people around the PM clearly believe the PM needs a PR operator who is less out on the tiles and more at home on the ball.

Concerned staff at 1MDB have confided that all computers and records at the troubled fund were recently called in and wiped. They say this includes not only personal computers belonging to staff but also the mainframe servers as well!

The order came as a surprise move by management, according to sources and it happened just before Christmas. Staff were contacted directly by phone or in person and told to take their computers immediately to the IT section in order to be wiped.

The Tun Razak Exchange is one of 1MDB’s key projects.

None of the instructions were delivered by text or email, leaving little record of the blitz, which took place in the space of just a few hours.

The result is that there are few records left available to show what has been going on at the beleaguered fund and this is widely believed amongst staff to be the reason.

The excuse was they had ‘been hacked’

The excuse given to bewildered staff members was that there had been a systems hack. One of them sent out this message on the day it happened, which was Friday 19^th of December, a fortnight before the departure of the previous CEO Mohd Hazem Abdul Rahman:

 

“1MDB has been collecting employee laptops and company-issued handphones today. Staff were contacted in person or by phone call and informed to hand them in to IT. No emails or text messages were sent. On asking the reason for the hand-in staff were advised that there has been a hacking attempt and that therefore the company is collecting all laptops and handphones in order to wipe them (wipe the discs clean) before they are returned. Parallel to that the main servers are being wiped. If you try to email a 1MDB employee now the email will bounce back as undeliverable. Obviously the reason given is incredulous to say the least”

Experts have told Sarawak report that the excuse of a hacking attempt is indeed rarely a credible reason for wiping information from servers:

It makes absolutely no sense to wipe servers to protect against hacking or online attacks. Instead you would either take these severs offline altogether until the issue was resolved or step up security. When Sony was hacked recently they didn’t wipe all their servers.

This snap decision to expunge all past records and emails from all staff computers and handheld devices as well as the organisations mainframe computers will inevitably raise questions about whether management were trying to conceal potentially embarrassing information before the handover.

Numerous questions have been asked for several months from all quarters about the hundreds of missing millions from the fund, which were raised from public borrowing.

Everything Wiped – what were they trying to hide?

There have been few proper answers forth-coming from 1MDB and now it appears there may be no evidence to be had either!

Were outgoing team deliberately covering up evidence and if so what, people are inevitably left wondering?

Just in September, Sarawak Report, for example, had disclosed that it has been given access to emails, which indicated the extent of the involvement of tycoon Jho Low in 1MDB’s decision-making processes.  Was this the reason for the attempt to wipe anything that could corroborate such information from 1MDB?

An emailed directive was later sent out to all staff confirming the situation that all data pre-19DEC2014 is no longer retrievable. “It is an internal email” one staff member told Sarawak Report. “It says that as part of the wipe all 1MDB HQ emails have been re-configured. All emails prior to 19DEC14 are permanently wiped”.

It is generally acknowledged that 1MDB has become the single biggest threat facing the Malaysian economy, according to observers with borrowings now standing at over $USD40billion and a number of assets widely believed to have been highly inflated in value.

There is also a mysterious black hole at the centre of the fund, which its managers have found impossible to account for. This is an alleged billion dollars, which it is claimed is resting in a redeemable Cayman Islands account, having been allegedly repaid to the fund by the company PetroSaudi, which originally received the loan.

The former CEO of 1MDB had claimed at the end of last year that this money was being ‘repatriated’ to help fund pressing debt repayments to Malaysian banks on the billions borrowed.  When he took over the job in January the new CEO was first quoted as saying that all the money had indeed been returned.

Business tycoon Ananda Krishnan is being pressured to pay up.

However, it is now admitted that this is not the case and the current excuse is that the low level of the dollar makes it a bad time to try and return the money.

Instead, business tycoon Ananda Krishnan is being pressured to stump up RM2billion to prevent 1MDB defaulting on its loans on Feb 18th next week, which would plunge the Malaysian economy into crisis.

Krishnan has been resisting extradition to India in connection with a corruption case and it is understood that Malaysia may stop protecting the businessman unless he cooperates.

It is an ugly stand off. And the escalating crisis has led to an increasingly poisonous atmosphere politically. The man with full responsibility for the fund is its Chairman, who is also the Finance Minister and Prime Minister, Najib Razak.

Both opposition politicians and increasingly leaders from Najib’s own UMNO party are demanding accountability and an explanation as to how such a vast debt could have accumulated out of borrowings in just five years?

Prince Turki – son of late King Abdullah of Saudi Arabia and owner of PetroSaudi

Sarawak Report has obtained exclusive access to a copy of the controversial 1MDB Joint Venture Agreement, completed on 28th September 2009 between Malaysia’s so-called development fund, 1MDB (One Malaysia Development Berhad) and the company PetroSaudi.

The 26 page document, which has till now been kept secret, was signed by 1MDB’s then Managing Director, Shahrol Halmi and PetroSaudi Managing Director, Tarek Obaid.

Despite 1MDB’s servers having been wiped before Christmas the copy was passed to Sarawak Report by a concerned insider just days after opposition leader Anwar Ibrahim was controversially jailed last week.

It at last enables concerned parties to scrutinise the true nature of this widely criticised deal, which was driven through by the Malaysian Prime Minister in his capacity as Minister of Finance and Chairman of the Board of Advisors to 1MDB.

What the document reveals is that the Prime Minister and his advisors  at 1MDB (believed to include the playboy tycoon Jho Low) paid USD$1billion of borrowed public money into a venture that already carried a $700,000,000 debt in the form of a loan from PetroSaudi’s parent company to the subsidiary that was entering into the joint venture, PetroSaudi Holdings (Caymans) Limited.

Crucially, under the terms of the joint venture, agreed to by 1MDB, the Malaysian development fund had committed to pay back this whopping great loan to the parent company, PetroSaudi International, on day one of the joint venture!

The outstanding loan – The ‘advances’ were owed to the parent company of PetroSaudi and it was due to be paid back!

Nothing more than a $700,000,000 scam?

Sarawak Report is now publishing the entire joint venture document, which has been kept secret till now, in full.

CLICK HERE

We do so in defiance of the obsessive secrecy of the Malaysian Government, which ought to have made such documents transparent and available in its public accounts.

Last week we revealed that the fund has wiped all its computer records in a further apparent attempt to conceal its investment activities.

Drawn up in great legal detail by the UK based office of the international law firm White & Case, the key requirement for 1MDB to pay back the PetroSaudi loan is couched in subtle legal language.

However, careful scrutiny of the document makes it perfectly plain that these are the terms of the agreement, which Najib Razak entered into on behalf of 1MDB:

Sneaky – the crucial clause 4.5, which requires that the entire $700million ‘loan ‘s paid back to PSI by its own subsidiary on the very first day that 1MDB ‘subscribed’ into the JV through its agreed cash injection of £1billion

Opposition spokesman Tony Pua has campaigned for Malaysia’s Public Accounts Committee to be allowed full scrutiny of 1MDB’s affairs, which have proved a growing fiasco with current debts of over RM40billion.

Tony Pua – key critic of 1MDB

He told Sarawak Report that any legal scrutiny of the Joint Venture document would have identified the debt burden and the requirement upon 1MDB to repay it:

“It is like you or me buying a house that has a great big loan of two thirds of its market value outstanding on the property. Who in their right mind would buy into such a deal?”, said Pua.

The up front debt payment to PetroSaudi’s parent company means that only $300,000,000 of the original $1billion paid into the venture by 1MDB would have been left available for activities by the fund.

The joint venture document also makes provision for a whopping further $5billion in future funding by 1MDB into the dodgy venture on “terms to be agreed”:

False claims boosted the image of private company PetroSaudi

Sarawak Report has already noted that the original claims by Najib and 1MDB, which implied that PetroSaudi was paying a further $1.5billion into the Joint Venture, were false:

Najib claimed at the time that PSI had invested $1.5billion, which was untrue. He made no mention of having to pay back a $700million ‘loan’ from PSI – and he also claimed that this private company was linked officially to the State of Saudi Arabia which it was not.

The little known oil company (which was based out of a shared office in Geneva at the time) had in fact paid zero cash into the deal, having apparently invested its so-called assets into the venture instead.

The man in over all charge at 1MDB was the PM

These assets consisted mainly of a proclaimed oil concession in the Caspian Sea, which was supposed to be worth over $2.5billion.

But, again, the suspicious secrecy surrounding the entire joint venture deal has made such claims impossible to prove.

No cash injection, only cash extraction

And, while Najib and the 1MDB press releases had falsely implied that there had been a cash injection from PetroSaudi, no mention has ever been publicly made till now of this cash extraction instead, of $700,000,000 on day one of the deal.

Another falsehood promoted by Najib and 1MDB’s publicity machine at the time of the joint venture on 29th September 2009 was the suggestion that PetroSaudi was somehow officially connected to the State of Saudi Arabia.

Observers, including Sarawak Report, later proved that the company was in fact a private venture set up by a little-known Saudi businessman called Tarek Obaid and his pal, who happened to be one of the many princes of Saudi Arabia.

Misleading attempts to describe the JV deal as an official venture between the two countries…..

Prince Turki bin Abdullah has recently been relieved from his post as Governor of Riyadh, a position he only achieved after the PetroSaudi deal.

Since PM Najib Razak seems to have achieved such a shockingly poor deal for the Malaysian development fund in this its very first joint venture, many will be asking if it is time for him also to be relieved of his post?

ARTICLE IN THE SUNDAY TIMES

IN THE summer of 2009, a Malaysian nicknamed “the Whale” appeared on the New York nightclub scene. He would travel with a large entourage in a fleet of Cadillacs and his party would spend tens of thousands of dollars a night in the company of socialites such as Paris Hilton.

“The Whale” is said to have celebrated his 28th birthday with a four-day event in Las Vegas that included a party at a pool surrounded by caged lions and tigers. Manhattan was abuzz with questions over his identity and the source of his wealth.

It emerged that the “mystery man” of the nightclubs was the Malaysian tycoon Taek Jho Low, who had been educated at Harrow School and the Wharton School in Pennsylvania. He claimed his success was due to being in the “right place at the right time”.

Low certainly has a wide range of business interests, building up a £650m investment fund that he started at university. He also runs Jynwel Capital, a Hong Kong fund with investments in media, retail, property and commodities. His family is independently wealthy.

There has been speculation, however, over his role at Malaysia’s state investment fund, which the bank Merrill Lynch warned last year had racked up debts of £7.8bn. The fund, 1MDB, is turning into a running sore for Najib Razak, the Malaysian prime minister, who chairs its advisory board, and a potential liability for his country’s balance sheet.

Senior fund officials have previously insisted that the charismatic Low, who is known to be close to the prime minister’s family, has had “zero” involvement in 1MDB.

Arul Kanda, the fund’s executive director, said last month: “Jho Low has no ties with 1MDB and I have not come across any document that linked him to this company.”

However, emails and documents passed to the Malaysian investigative website the Sarawak Report and seen by The Sunday Times expose for the first time the young tycoon’s role as a secret broker for 1MDB.

Najib, 61, who has led the country since 2009, now faces calls for an inquiry into the billions of dollars spent at 1MDB. He may also have to answer questions over why Low’s role at the fund was denied.

The affair adds to political pressure on the prime minister, whose government was warned about a perception of widespread cronyism in a report by the US Department of State in 2010.

It comes amid growing popular discontent over rising living costs, fuelled by the extravagant spending habits of Najib’s wife, Rosmah Mansor. She is seen as out of touch with many ordinary citizens struggling on meagre wages.

The documents reveal how Low played a vital role in one of the fund’s most controversial deals: a £630m investment in a joint venture with the international oil firm PetroSaudi.

The oil firm was founded in 2005 by Tarek Obaid, a Saudi businessman who has been a partner of Renault’s Formula One team.

Emails show Low was pushing the investment, writing in one email: “We need to move fast. We want to sign and pay by sept 09.”

About £630m was provided by 1MDB for a joint venture with PetroSaudi in September 2009, but documents indicate that £440m was then transferred out of the venture.

A proposal document says £385m of these funds were to be used for a Panama investment fund headed by Li Lin Seet, who works with Low at Jynwel Capital. PetroSaudi says it was never implemented.

1MDB — which invested or lent more money to PetroSaudi after this deal — has said it fully recovered all its liabilities from the deal and made a significant profit.

There are questions, however, about who took over 1MDB’s interest and the exact location of the recovered funds, which were initially moved to the Cayman Islands.

In an interview with The Sunday Times, Mahathir bin Mohamad, who was Malaysia’s prime minister for 22 years, called for an investigation. “Somebody must be doing something stupid to part with $700m [£440m] for no very good reason as far as I can see,” he said.

Mahathir said he wanted greater transparency on 1MDB’s funds, including money invested in, or loaned to, PetroSaudi. “They say it is Cayman Islands, and they say they brought it back, and then they said they have not brought it back, so I cannot be sure where the money is,” he said.

There is particular scrutiny over Low’s role because of his links to Najib’s family. Low helped in the making of the film The Wolf of Wall Street — which starred Leonardo DiCaprio and was produced by Riza Aziz, Najib’s stepson.

The documents also show Low was in contact with the prime minister’s aides on at least two issues, including correspondence about Malaysia-Saudi relations.

A source close to Low dismissed claims that he was a secret broker as “without merit”, because he had said this year that he gave his views to 1MDB on various matters. He had not profited personally from the fund, the source said.

A PetroSaudi source said the attacks on 1MDB were “politically motivated” and the fund made £320m profit on the joint venture. The firm consulted Low on the project but he wasn’t paid, the source said.

A 1MDB source said it was always made clear that Low had never been employed or retained by the fund, and that was still the position. All decisions were made by 1MDB management, and criticism of the profitable PetroSaudi venture was “misplaced”, the source said.

The Malaysian government said the prime minister was not involved in the day-to-day operations of 1MDB, which is run by a professional and experienced team. Its accounts were audited by Deloitte.

The government said: “Views expressed by certain quarters concerning 1MDB should be examined in light of political motivation. However, if any wrongdoing is proven, the law will be enforced without exception.”

Additional reporting: Ændrew Rininsland

1MDB has concentrated on Middle Eastern connections but in which direction has the ‘investment’ been?

After Jho Low and his partners from PetroSaudi had completed the 1MDB deal, the management of public perceptions about what had happened clearly became crucial.

The joint venture buccaneers can soon be seen to have started to wield the most extraordinary influence over the presentation of 1MDB and then even the management of Malaysia/Saudi relations, through their manipulation of their alleged contacts through PetroSaudi boss Tarek Obaid and his largely inactive partner, Prince Turki.

Jho Low had already played shamelessly on Prince Turki’s connections to give the impression to 1MDB that the joint venture was linked with state to state relations, implying that he was acting on behalf of the Prime Minister of Malaysia and the father of the Saudi Prince, King Abdullah.

This is what he wrote to 1MDB CEO Shahrol Halmi on Sept 18th, introducing him to PetroSaudi executives

“I am pleased to confirm as per YAB Prime Minister’s discussions with HM King Abdullah Al-Saud on furthering Saudi-Malaysia bi-lateral ties, together with YAB PM’s discussions with HRH Prince Turki Al-Saud, PetroSaudi and 1MDB is on track with respect to your USd2.5b JVC partnership. “

This impression was also played up to the press at the launch of the deal, although the partners at PetroSaudi showed themselves notably anxious to avoid as much publicity as possible.

As PetroSaudi Director Patrick Mahony had put it to CEO Shahrol Halmi on Sept 21st:

“With regard to liaising with Robert [press advisor] on what we can release to the media, I will be the point person. I would suggest you send to me a draft of what you would like to release and we will let you know if it works for us. PSI is very press shy and usually never announces our investments (one of the main reasons governments like to work with us) but we understand you will need to make some statements and we would be happy to make them jointly with you.”

However, on the day of the deal, Halmi warned the team at PetroSaudi in an email that, despite their reluctance to involve Prince Turki, the Prime Minister had insisted on a “quote” from the Prince to make it appear that the Government of Saudi Arabia was involved in the private deal.

Interestingly, both sets of collaborators were not keen on the matter being played up to the international press, they just wanted to foster the concept of Saudi investment for local consumption.

From: Shahrol @ Hotmail [mailto:shahrol.a.halmi@hotmail.com]
Sent: Tuesday, 29 September, 2009 4:36 PM
To: Patrick Mahony
Cc: Casey Tang; Robert Ho
Subject: joint press release
Importance: High

Hi Patrick, can you help take a look and see if this is ok? The PM insisted on the quote from HRH Prince Turki and the equity figures. This statement is going to be released only to the local media, but there is no guarantee that the wire services won ’t pick it up. Planning to send this out late morning tomorrow, Malaysia time.
PRESS RELEASE

Joint Press Statement by PetroSaudi International and 1Malaysia Development Berhad

PetroSaudi International Limited and 1Malaysia Development Berhad in US$2.5 billion joint venture Partnership, opens new door to FDIs

KUALA LUMPUR, 30 September 2009: Malaysia and Saudi Arabia today entered a new era of economic cooperation with the setting up of a US$2.5 billion joint venture company, which will spearhead  flow of foreign direct investments from the Middle East as well as well as make strategic investments in high-impacts projects here.

The partnership between Malaysia Development Berhad ( “1MDB ”) and PetroSaudi International Limited ( “PSI ”) involves the creation of a joint venture company ( “JVC ”) with an initial capital of US$2.5 billion in which 1MDB and PSI will be contributing US$1.0 billion and US$1.5 billion in equity respectively.

This venture is the first undertaken by PSI in this region and underscores the confidence Saudi Arabia has in Malaysia and economic prospects here.

The 1MDB is wholly owned by the Government of Malaysia and was established recently to drive strategic initiatives for long-term sustainable economic development and promote in flow of FDI into the country.  PSI, based in Al-Khobar, Saudi Arabia, is mandated to carry out investments which can strengthen the relationships between the Kingdom of Saudi Arabia and key countries worldwide.

The JVC ’s objective is to seek, explore, and participate in business and economic opportunities which results in the enhancement of and promotion of the future prosperity and long-term sustainable economic d evelopment of Malaysia. It is also expected to actively make investments in the renewable energy sector.

The JVC is also expected to be a vehicle for investments from the Middle East into the region, thereby giving Malaysia the edge in drawing investments from the cash and resource-rich region.

PSI ’s Chairman HRH Prince Turki Bin Abdullah Bin Abdulaziz Al-Saud said: “Malaysia has long been a model of stability and development for developing countries. We believe that recent economic liberalisation policies announced by the Prime Minister will only make Malaysia a more attractive place for investors. We envisage Malaysia becoming an important partner for the Kingdom of Saudi Arabia.”

Also lauding the setting up of the JVC was 1MDB ’s Chairman Dato’ Mohd Bakke Salleh.

He said: “The JVC is set to further increase foreign direct investment from the Middle East, in particular Saudi Arabia. We will leverage on PSI ’s strong international presence, their networks and expertise to promote Malaysia as the preferred investment destination. ”

The JVC will initiate various projects in multiple sectors which are mutually beneficial as well as in line with 1MDB ’s mission to drive long-term sustainable economic development in Malaysia.” [press release officially put out on Sept 30th by 1MDB]

In response, PetroSaudi Director Patrick Mahony warned his own team (and his boss Rick Haythornewaite) to say nothing to journalists and to indicate to ‘bhe’ [Buried Hill Enterprises] that the deal was about waste management.

Buried Hill was the company which actually owned the Caspian Sea concession on which PetroSaudi had based its vastly inflated valuation. Perhaps it can be concluded that Buried Hill were unaware on how this association had been played up to the Malaysians?

” If any journalists ask, it is no comment. If bhe asks us, please say this jv is more around our waste management business and other areas of interest. Main point is to not comment to media and not say anything about numbers. Many thanks  [Patrick Mahoney to his team – Sept 30 2009]

Visit to Saudi Arabia January 2010

As part of the image building around this joint venture, Jho Low can soon be seen getting stuck into arrangements surrounding the January 2010 visit to Saudi Arabia by Najib Razak and his wife Rosmah.

Far from the “zero involvement” claimed, Jho Low can be seen to have been in the thick of these negotiations, making key initial introductions regarding this country to country diplomatic venture and putting the PM’s office in touch with the King’s staff via his contact with Tarek Obaid.

What was the Embassy up to?

Dear Sheikh Tarek,
From: Wan Shihab <wanshihab@gmail.com>
Date: Wed, 25 Nov 2009 21:34:50 +0800
To: <jamal@khashoggi.com>
Cc: Low, Jho (Personal)<jho.low@gmail.com>

Subject: Greetings and Introduction

Dear Mr. Jamal Kashoggi,

My name is Wan Ahmad Shihab and I am the Special Officer to the Prime Minister of Malaysia, the Hon. Mr. Najib Razak.

I was given your e-mail by Mr. Jho Low, so that we may begin communicating with each other on preparations for the interview with the Prime Minister scheduled for December 14th, 2009.

I am currently travelling with the Prime Minister and will return to Malaysia by December 1st, but please do not hesitate to contact me for any assistance which you may require leading up to the interview, and we will be happy assist you in whatever way we can.

Please find below all of my contact details should you need to reach me at any time.

I look forward to hearing from you. Thank you.

—
Wan Ahmad Shihab Ismail
Special Officer to the Prime Minister
Level 4, Prime Minister’s Office
Perdana Putra
62502 Putrajaya
Malaysia

Office: +603 8888 1433
Mobile 1: +6019 2633 488
Mobile 2: :+60193137047

Official e-mail: wanshihab@pmo.gov.my

Email correspondence even shows that Jho Low composed a letter on the 19th November 2010 on behalf of Najib Razak to be sent to the King. The ever helpful Li Lin Seet drew up the draft, while the entrepreneur involved himself in the timings of the arrangements:

Fyi attached. Comments pls.
Sent via BlackBerry from T-Mobile

From: seet.lilin@gmail.com
Date: Thu, 19 Nov 2009 00:20:36
To: Jho Low (gmail)<jho.low@gmail.com>

Subject: Emailing: Letter to KSA v2.docx

Change mid-dec to early next year

His Majesty King Abdullah bin Abdul Aziz al-Saud
The Custodian of the Two Holy Mosques
Kingdom of Saudi Arabia
Your Majesty,

I have the honour to convey to Your Majesty the gratitude and appreciation of the Government and people of Malaysia to the Kingdom of Saudi Arabia, for the services extended to the Guests of Allah from Malaysia who travelled to the Kingdom of Saudi Arabia to perform the Haj and Umrah. Despite the public health challenges posed by the H1N1 flu situation, Your Majesty increased the Malaysian pilgrims Haj quota for the 1430H haj season by 10,000 to 38,000 pilgrims.

On the issue of Yemeni Houthis rebels and their attacks on the sovereignty of the Kingdom of Saudi Arabia, the Government of Malaysia firmly condemns such violations. We unreservedly support the tough actions taken by Your Majesty in ensuring the security of the Kingdom of Saudi Arabia and the GCC against such despicable acts of violence.

I will also like to congratulate Your Majesty on the inauguration of King Abdullah Science and Technology University. The unparalleled facilities and world-class faculty assembled will no doubt provide intellectual fruits and technological advancements to benefit all mankind in generations to come.

Also, Your Majesty’s pro-business development policies have greatly benefitted both the public and private sectors of Malaysia. 1MDB, a Malaysian sovereign wealth fund has formed a joint-venture with PetroSaudi International to capitalize on global investment opportunities for the Kingdom of Saudi Arabia and Malaysia. MMC Corporation Berhad, a Malaysian company, has the privilege of partnering the Saudi Binladin Group to jointly develop and manage the new Jazan Economic City. These are just some examples of the ever-improving bilateral relationships and trade ties between the Kingdom of Saudi Arabia and Malaysia.

Malaysia is currently developing several economic zones such as the Iskandar Development Region in Johor and the Sarawak Corridor of Renewable Energy and it will be interesting if I can have an audience with Your Majesty to share your wisdom on various economic policies, such as the conception of the King Abdullah Economic City, and political issues during my visit to the GCC in early next year. I can also take the opportunity to update Your Majesty on various developments that I am undertaking in Malaysia.

May Allah the Almighty continues to bestow upon Your Majesty His guidance and blessings for Your Majesty’s leadership of the Kingdom of Saudi Arabia in particular and the Islamic world in general.

With Respect and Best Wishes.

Dato’ Sri Mohd Najib bin tun Abdul Razak

It seems that such was the youthful entrepreneur’s influence that he had gone from determining economic policy to foreign policy – and he had got in a handy plug for his other master Taib Mahmud and his pet SCORE plan as well!

The Malaysian PM, naturally, did achieve a meeting with the Saudi Arabian leadership. But, it had nothing to do with the PetroSaudi joint venture, although the Malaysian press continued to be spun the impression it was.

Intriguingly, just in advance of the meeting, Jho Low sent a ‘Very Private and Confidential Note” to Tarek Obaid about the meeting, purporting to have been speaking to “Mdm”.

Given Jho Low’s close relations to his friend Riza’s mother, there will be speculation that the message reflects the wife of the Prime Minister’s agenda for the visit….

In which case, the references to the opposition leader Anwar Ibrahim, who is now controversially languishing in jail, are particularly significant. Because, “Mdm” was clearly fearful and jealous of Anwar’s perceived influence in the Middle East and wanted him crushed.

Conspiracy to defame Anwar?

From: Low Jho

To: Tarek Al-Obaid

Date: Sat, 26 Dec 2009 12:26:39 +0000

Subject: VERY PNC NOTE

VERY PNC NOTE, delete post reading:

From MDM:

This is a very “focused & effective” trip. Objective is not MOU or general business ties.

Specific that PM is seeing the 3 highest levels in Saudis (one on one) being the King, Crown Prince and Prince Naif while First Lady sees the Queen and Crown Princess to build “effective ties”.

One on one discussions ensure “more open and frank discussions” to enhance “personal ties”. That is most important.

Will encourage Saudis to use words like “personal”, “trust”, “friendship”, “bond”, “ties”, etc… You get the gist of it. – the objective of visit is so that when PM is done with this visit:

a. Top 3 leaders in Saudi knows that PM is a trusted ally and someone they can pick up the phone and chat to re anything in Asia and beyond

b. Malaysians will realise from King Abdullah’s statements that it is a very personal relationship with PM and things happen because of that personal trust (award further substantiates that)

c. Quietly, Anwar is full of lies and for all those that believe Anwar has strong ties with the top leadership with Saudi, that is complete nonsense and people will tell over time he is a complete liar and lose all sense of credibility in Middle-East (his only last stand left beyond usa). If senior leadership in Saudi and Abu Dhabi make it quietly known to their friends in the gulf re their views on Anwar, he is history and even key business supporters will stay away from him knowing the position of the big boys.

Following this meeting there were numerous reports in the Malaysian press implying that Saudi Arabia and Malaysia were building ties and that the joint venture with PetroSaudi was involved.

Procuring Malaysian support for Saudi attacks on Yemen

Meanwhile, the increasingly wealthy and influential Jho Low was also apparently setting about doing diplomatic favours in the other direction.

In November 2009, Saudi Director of PetroSaudi, Tarek Obaid, whose brother is senior in the Saudi Governement, was asking Jho to organise a diplomatic favour after the Saudis had launched controversial attacks into North Yemen:

From: “Tarek Obaid” <Tarek.Obaid@Petrosaudi.com>
Subject: Saudi Announcement
To: Low, Jho (Personal)
Date: Fri, 13 Nov 2009 21:03:00 +0000

Dear Joe :-

Further to our discussion today, it would be highly appreciated if Malaysia could issue a strong statement of support to Saudi Arabia and it’s recent military operations and categorically condemn the incursions into Saudi territory of the Northern Yemeni rebel group known as the Houthis.

Please find below a draft statement that the Malaysian Prime Minister should issue in this regard.

Respectfully,
Tarek

Malaysia strongly condemns the criminal acts carried out by armed men from the Houthi rebel group in North Yemen who recently crossed and infiltrated the Jizan region in Saudi Arabian territory. Malaysia firmly supports the Kingdom of Saudi Arabia’s actions and categorically rejects any attack against any part of Saudi Arabia. The Kingdom has the full right to defend its territories and safeguard the safety of it’s citizens. Saudi Arabia under the wise leadership of the Custodian of the Two Holy Mosques King Abdullah bin Abdulaziz has a special standing in the Middle East and the wider Muslim world and it’s stability is of critical global importance.

 Six days later it appears that Jho Low was able to deliver:

Fixed by Jho Low for Tarek – Malaysian solidarity for Saudi Arabia’s attacks on North Yemen

By this time, of course, the fun loving young billionaire’s influence was assured as the key contact man between Najib, Rosmah and the Middle East.

In the wake of their handsome joint venture deal the PetroSaudi team hired one of the most expensive yachts in the world for a jaunt in the Mediterranean – and who should they invite and entertain for a week that summer on the Tatoosh, but the Prime Minister of Malaysia and his wife?

The Tatoosh rents for half a million dollars a week – Jho Low attracted press attention by inviting Paris Hilton on board in 2010

Naturally, Tarek’s well-connected friend, the founder of PetroSaudi, son of the then King of Saudi Arabia was also there.

Reportedly, there have been further Mediterranean cruises of this nature between Jho Low, Rosmah and Najib, the last being last summer when the couple controversially chose a charged political moment during the disappearance of the jet MH 370 to leave Malaysia and enjoy the sundeck instead with their now close friend Jho Low and his Saudi contacts.

From: Low Jho

To: wanshihab@gmail.com, Tarek Al-Obaid

Date: Sun, 27 Dec 2009 03:29:32 +0000

Subject: Re: Pictures from South of France (PM Najib & HRH Prince Turki)
Thanks so much Wan!

——Original Message——

From: wanshihab@gmail.com

To: jho.low@gmail.com

To: Tarek Al-Obaid

ReplyTo: wanshihab@gmail.com

Subject: Re: Pictures from South of France (PM Najib & HRH Prince Turki)

Sent: Dec 26, 2009 11:25 PM

Dear Jho and Mr. Tarek Al Obeid,

It would be a pleasure to email you  the photos of HRH. Unfortunately I am away with the Prime Minister at the moment whereas the photos are back in Malaysia and is not immediately accessible. I will send it through as soon as I return. Hope that’s alright.

May I take this opportunity to extend to you the season’s greetings and wish you a Happy New Year.

Warmest regards,

Wan

——Original Message——

From: Low, Jho

To: wanshihab@gmail.com

Cc: Tarek Al-Obaid

ReplyTo: jho.low@gmail.com

Subject: Pictures from South of France (PM Najib & HRH Prince Turki)

Sent: Dec 27, 2009 9:08 AM

Dear Mr. Wan Shihab,

Would you pls kindly email the pictures you have of The Hon PM Mohd Najib Razak with HRH Prince Turki Al-Saud and Sheikh Tarek Obaid asap? They wld like it strictly for their private records. I have cced Tarek on this email so you can email him and cc me asap.

Thanks.

Tony Blair connection

Another key target of Jho Low and PetroSaudi’s diplomatic offensive appears to have been former prime minister Tony Blair.

In the wake of the joint venture deal PetroSaudi hired Blair as a consultant and also as a valuable PR protection for the deal – a connection that has been widely used to try and sway public opinion:

Front man? Tony Blair’s failure to check out PetroSaudi  have landed him with criticism in the UK

His association with PetroSaudi on a retainer of $65,000 a month and his offers to negotiate deals for the company with Chinese investors and to make introductions for PetroSaudi threatens to land the ex-PM in the latest round in the UK’s on-going ‘Cash for Access’ scandal.

Malaysians might say that the billion dollar scandal surrounding 1MDB make “cash for access” a minor problem by comparison.

Boardroom presence – Jho Low’s lavish corporate movie

The Malaysian billionaire is the ultimate exponent of mixing business with pleasure.

He combines his low profile business activities, which he insists are not related in any way to Malaysian public investments,  with a high profile social life that has generated gossip columns from Las Vegas to St Tropez.

Indeed the display of wealth is clearly Jho Low’s style.

Even in his corporate video for investors in his present vehicle, Hong Kong based Jynwel Capital, the youthful tycoon cannot resist portraying himself and his business surrounded by luxury and excess.

Jho Low bought up Myla, reportedly Rosmah’s favourite underwear maker

Jho Low is portrayed posturing by the pool of a giant house in the Caribbean; being chauffeured and flown around the world; buying up businesses in mining, hotels, oil and ladies underwear (where he takes the opportunity to monitor a photographic session) and crucially, shaking the hands of wealthy Arabs, who have featured so prominently in his deals supposedly drawing investment into Malaysia’.

Indeed there could be no greater contrast with the lives of the millions of impoverished Malaysians, in the name of whose development billions were raised for 1MDB, than Jho Low’s present jet-setting lifestyle.

Jho Low with rapper Ludacris in October.

And it appears to be no coincidence that far from drawing in vital investment, Jho Low’s management of 1MDB’s portfolio has landed this massive public fund on the rocks with shocking that are now confronting the Treasury with Malaysia’s biggest financial crisis in years.

A further RM3 million needs to be found for debt repayments to prevent a default by the end of March.  That follows RM2 billion already raised from an unidentified source earlier this month, believed to be the crony billionaire Ananda Krishnan.

Meanwhile, over the past few days it has been reported that 1MDB’s bonds are being treated as junk on the financial markets, with all prospects of an IPO launch shelved as hopeless.

In previous days, when Low was at college he emailed fellow hard up students instructions on how to cheat US phone boxes to ring home to Malaysia for free.  After his heist at 1MDB his free-loading is on a considerably grander scale.

Jho Low’s celebrity pals

Jho Low with musicians Alicia Keys and Swiss Beatz

Jho Low first hit the headlines late in 2009, a few short weeks after the 1MDB joint venture was signed.

His extravagant lifestyle became the talk of New York, when he was seen partying with the likes of Lindsay Lohan, Megan Fox and the Hilton sisters.

Night spots reported that he was paying USD$900 each for copious bottles of Cristal to treat his celebrity friends – the supply seemed limitless.

By 2010 when his pal Riza Aziz was embarking on a Hollywood career he was behind the glitziest ever launch party at Cannes for their new production company Red Granite Pictures.

What everyone was by now asking was where was the money coming from?

Equanimity – the world’s 34th largest yacht is believed to be owned by Jho Low

But the hangers on didn’t care.  Celebs for hire, like Paris Hilton, were scooping up a million dollars an appearance to party alongside Jho Low’s billionaire playboys in the South of France and on some of the world’s most expensive yachts.

Less Lucky in Love

However, like many a young man, Jho Low has learnt the hard way that money cannot necessarily buy love.

Few can have set themselves up for a bigger fall than Taek Jho Low, when he splashed out $2 million dollars on a marriage proposal for his heart throb the Taiwanese pop-star Elva Hsio in Abu Dhabi.

$2 million proposal to music and fireworks at Atlantis Hotel in Dubai

Parachuters dropped from the sky with gifts of jewels, and an orchestra poured from the surrounding garden at the Atlantis Hotel, while the Abu Dhabi night sky exploded in heart shaped fireworks, declaring that Jho loved Hsio.

It was all filmed and placed on You tube by a professional events company. But Elva turned him down!

Since then, Jho Low has continued partying with the likes of Paris Hilton in St. Tropez and during the latest world cup in his entire entourage and office moved over to Brazil to enjoy a non-stop party.

However, while the lavish style may impress a certain kind of investor and a certain kind of political ally, it has tended to go down like a lead balloon with the ordinary folk and voting public, who now know that their development money has become inextricably linked to the Jho Low party circuit.

Jho Low is in regular contact with party pal Paris Hilton

In 2013, he flew out hip hop singer Swizz Beats, rapper Busta Rhymes for a concert in Penang for a pre-election concert.

He was also behind the booking of Psy. It is well known that these events back-fired on the friendly politician he was seeking to promote, Najib Razak.

Other friends in the music business include Alicia Keys and Usher who have also been photographed partying with the Malaysian tycoon.

Jho Low and Leonardo Dicaprio at the premier of The Wolf of Wall Street

In 2014, Sarawak Report exposed how Red Granite Pictures, owned by Najib Razak’s step-son Riza Aziz had financed the Hollywood blockbuster The Wolf of Wall Street.

The film cast another of Jho Low’s close friends Leonardo Dicaprio, who had also joined the trip with Paris Hilton to South Africa in 2010. Jho Low was invited to Leo’s lavish birthday celebration in 2014.

Jho Low was also prominent at the launch party for the film, posing next to Riza and Leonardo and even received a special thank you in the film credits, leading to speculation as to who really financed the film.

When Sarawak Report first asked about the sources of Riza Aziz’s enormous funds  libel threats were issued by the Hollywood lawyers Loeb & Loeb, threatening immediate action unless the posts were removed.

The posts were neither removed nor amended and months later the threats have not been carried out.

Wynton Private Equity Group – Jho Low’s Investments

With brother Szen Low, new right hand man at Jynwel

According to Jho Low, he set up Wynton Private Equity Group with school friends in 2002, using an initial start up of USD$25million.

However, its actual activities have been low key.  As of 2010, Wynton’s investments stood at USD$1billion with offices in Malaysia, Singapore and the British Virgin Islands.

However, it was Wynton that Jho Low was operating out of when he became involved in the 1MDB PetroSaudi Joint Venture, as email addresses in the correspondence by him and his colleagues indicate.

Tiffany from UBG/ Wynton

Lawyer Tiffany Heah emailed from Wynton, but she was also working at UBG bank, according to her LinkedIn profile.

Last year, thanks to court documents, Sarawak Report was able to demonstrate that in January 2011, 1MDB submitted a letter on behalf of Jho Low and The Wynton Group pledging to back another joint venture to buy out the prestigious Maybourne hotel group, which includes the leading London hotels Claridge’s, the Connaught and The Berkeley.

That pledge backed Wynton to the tune of a final offer of £1.28 billion.

However, according to the judge it was clear that the British businessmen selling the shares were not convinced by Mr Low or the reliability of the Malaysian Government’s support . As he put it “these [offers] were not at the time taken seriously by most of the shareholders’

Justice David Richards detailed in his judgement on a related case how as part of his bid Jho Low purchased debt in the hands of Ireland’s National Asset Management Agency (“NAMA”), which had been taken over from a distressed property tycoon Derek Quinlan.

Claridge’s Hotel – a deal Jho Low missed but 1MDB guaranteed his bid.

Tellingly, Irish press reports made no mention of Jho Low in this context, because the actual funder behind the purchase of this debt, according to the Irish Independent and other news outlets, was none other than Malaysia’s sovereign wealth fund One Malaysia Development Berhad (1MDB).

This debt purchase was an integral part of Jho Low’s private equity bid to take over the controlling shareholding of the Coroin Hotel group in London and the UK court judgement makes clear that he was the man who fronted the approach to NAMA and who had purchased the shares through a company associated with the Wynton Group called JQ2.

Jynwel Capital

Outside his Viceroy Hotel Group office HQ

Jho Low is filmed from the air on the phone in the Caribbean; being chauffeur-driven in a Rolls Royce; shaking hands through vast plate glass windows and on balconies over-looking Central Park New York.

This is the image that the young Penang born financier promotes in his motion picture quality corporate video for Jynwel Capital his latest venture, where he makes much of his famous connections, both in Hollywood and the Middle East (particularly Abu Dhabi), allegedly started through networking as a Harrow schoolboy and at Wharton Business School in the US.

These days, Jho Low likes to paint himself as a professional businessman with assets strewn across the globe.

Going global with his Arab connections? But is it also 1MDB money?

In 2012, Jynwel Capital was part of an investor group led by Sony which acquired EMI Publishing for USD$2.2billion.

In 2013, Jynwel partnered with developer Steven Witkoff to buy New York’s prestigious Park Lane Hotel for USD$660million and shortly after it acquired luxury lingerie brand MYLA.

In November of that year he also spent USD$2.3 billion in buying out the oil company Coastal Energy from the jailed Houston oilman Oscar Wyatt.

Jynwel has a 20% stake in the Electrum Group

In May 2014, Jho Low set his eyes on investing in gold as well, when Jynwel brought a 20% stake in mining conglomerate the Electrum Group and in October 2014, media reported that Jynwel Capital and funds affiliated with the government of Abu Dhabi had contacted Adidas AG’s Board offering to buy sports brand Reebok, which is worth  USD$2.2billion.

But it is Jho Low’s much vaunted contacts with the movers and shakers in the Middle East that have raised most eye-brows where 1MDB and Malaysia are concerned.

Top real estate in New York and a flat in the Time Warner building

The development fund has moved on from its early investments to become involved in a series of tie ups with Middle Eastern lenders and investors, each one appearing to be more wasteful and expensive than the last.

Two multi-billion Goldman Sachs bond issues, where the commissions appear to have been at a level of at least ten times the going rate of interest and provided the bank with record profits in the Far East were particularly notable.

What is known is that Aabar Investments, the Abu Dhabi fund which has been prominent in some of 1MDB’s subsequent ventures also tied in with Jho Low on his 1MDB backed attempt to buy the London Hotel Group.

Introducing American celebrities to Eastern capital… but what happened to Malaysia’s development money?

The CEO of Aabar was also finally cited by Riza Aziz as being the man behind the USD$100 million financing of the Red Granite Wolf of Wall Street production.  The announcement came after months of resisting to name their backer and to deny it was Jho Low.

In light of all the new evidence about his role in the PetroSaudi ventures, Malaysians will now be entitled to ask whether Jho Low was as meddlesome in some of these later Middle Eastern joint ventures and whether that might not also account for what seem to be equally strange disappearances of inadequately accounted for sums of cash.

Research by Sarawak Report indicates that in 2012 Jho Low purchased the most expensive ever mansion in Hollywood Hills at 1423 Oriole Drive, for just under USD$39million

HOW 1MDB’S $700 MILLION ‘LOAN REPAYMENT’ WAS USED TO BUY UBG BANK – NEXT STORY!

Vice-President of Jho Low’s Jynwel Capital Li Lin Seet living it up on the Alfa Nero yacht at St Tropez – rental USD$1.2million a week.

Crucial to Jho Low’s life as a wheeler dealer financier has been his team of trusted insiders.

Together, this band of close associates have circled the globe, enjoying a life of luxury and excess unimaginable to the bulk of ordinary Malaysians.

Yet, it is those ordinary folk who are effectively funding it all, thanks to 1MDB’s investment decisions, master-minded to a large extent, as it has now emerged, by Jho Low himself.

So, who were Jho Low’s special contacts and who helped him weave his magic?

Rosmah Mansor

Rosmah Mansor – a close friend of Jho Low, along with her son, her high living and ridiculously expensive collection of Birkin bags have raised eyebrows

Insiders say that Jho Low’s key initial Malaysian contact was the PM’s stepson Riza Aziz, whom he met while at school over in the UK.

Jho Low then spent plenty of time ingratiating himself with Riza’s Mum, Rosmah Mansor, whom he generally refers to as ‘Madame’ or ‘First Lady’.

By the time Najib Razak was Deputy Prime Minister, Jho Low was already well in with the family and full of helpful information for Rosmah and her husband about how to ‘fix things’ financially.

The PM has openly acknowledged that Jho Low offered crucial advice on how to turn the so-called Terengganu Sovereign Wealth Fund into One Malaysia Development Berhad (1MDB) and re-launch it as a development fund for Malaysia.

Rosmah’s high living has already created dangerous levels of comment and concern around Najib Razak’s premiership, simply because there has been no credible explanation forthcoming for it.

Handy bolt hole? Jho Low bought this £25,500,000 property in London’s Belgravia for Rosmah and Najib just before the last election – in case?

In the past few days Najib’s own  brothers have issued a formal  statement to the media, deploring any suggestion that this money might have come as “inherited wealth” from the Razak family.

However, this was the explanation that had been provided to the New York Times when the newspaper recently questioned the Prime Minister’s office.

The rest of the Razak family have now formally demanded that any such suggestion that their father, a former prime minister himself, might have corruptly acquired and passed down such sums of money be withdrawn.

It has left Najib isolated, even from his own family.

Riza Aziz

When Rosmah ran up a fantastic quarter of a million dollars bill at the bespoke luxury Bel-Air hotel in Beverly Hills, Red Granite insiders told Sarawak Report that the tab was picked up by the Hollywood production company.

In turn, the owner of Red Granite, Rosmah’s son and Najib’s step-son, Riza Aziz, was being financed, by all accounts, by Jho Low.

Enjoying the limelight Riza and Jho Low at premiere of Wolf of Wall Street

A recent article by the New York Times has confirmed that Riza’s luxury house in Beverly Hills and his multi-million dollar apartment in New York were bought by Low.

The duo have become well known the fixed members of a party circuit that has included jaunts at Caesar’s Palace in Las Vegas, yacht parties in the Mediterranean and luxury trips to watch Formula 1 and the World Cup in Brazil.

One famous Hollywood personality has said he was offered half a million dollars to accompany the revellers to Las Vegas, with private jet, hospitality and gambling chips all thrown in by Jho Low.

He declined, but it is believed that others (people of considerable international fame) have accepted.

Jho Low and Li Lin Seet – best pals and business allies enjoying the fruits of their activities

Riza has subsequently denied that it was Jho Low who provided the finance for his movies, including the $100million dollar bill for the Scorcese hit The Wolf of Wall Street.

However, as the New York Times has confirmed, many in the Hollywood community were led to understand by Red Granite at the time that Jho Low was indeed the funder of the film – he received a special credit of thanks at the end of the movie.

Li Lin Seet

Seet was a contemporary of Jho Low at Wharton Business School in Pennsylvania.

As his LinkedIn entry makes clear, Seet worked for Low’s first enterprise Wynton Capital and has hardly strayed from his side since.

Li Lin Seet – Jho Low’s Man Friday

Seet has also been part of the inner circle playing around town with Riza, Jho Low and the cool gang of billionaires with unlimited income – average age around 30.

Li Lin Seet and Riza Aziz – the party crowd round Jho Low

It was when Seet was still based at Wynton Capital that he sent and received numerous emails regarding the 1MDB PetroSaudi Joint Venture from this address.

With Paris Hilton at yet another match

He now describes himself as a Vice President of Jho Low’s current company Jynwel Capital, based in Hong Kong.

Seet was copied into the correspondence respecting the JV deal between PetroSaudi and 1MDB in September 2009.

That correspondence minutely reveals Jho Low’s driving involvement in every aspect of the deal.

It was also Seet who joined Jho Low and a fellow Wynton employee, lawyer Tiffany Heah (she also worked for UBG Bank) at their initial crucial meeting with PetroSaudi’s Patrick Mahony in New York, at which Mahony agreed that the firm could “act as a front” for their business activities.

From Singapore’s Unity Capital Management to partying with Leonardo in Las Vegas and LA!

And it was Seet who performed the role as the signatory for the firm Good Star, into which the USD$700,000,000.00 “loan” cum “premium” was paid on the conclusion of that joint venture deal.

On the day that the money finally transferred into the Good Star RBS Coutts Zurich account, Sept 30th, Seet went on Facebook:

Something big happen that day?…

A week later Li Lin Seet was embarking on the party lifestyle that became the hallmark of Jho Low and his crowd of business hangers on over the coming years – a lifestyle that was so expensive and extravagant that it attracted attention across the world.

Cristal is the most expensive champagne you can buy – this is what See messaged from Las Vegas:

A week later and the conspirators were drenched in Cristal in Las Vegas….

Li Lin Seet was also the signatory of the company Panama Investment Manager, which did a deal with PetroSaudi ‘front man’ Tarek Obaid to manage the funds of the PetroSaudi ‘subsidiary’ in the Seychelles.

New life as a private jet setter for Seet

That was the company which acted as the parent company of Javace Sdn Bhd and which later bought out the Taib family’s UBG bank.

Behind the scenes, we have established that PSI Seychelles had done a deal surrendering all of its USD$610million, which were the proceeds of the $700million “loan repayment” from 1MDB, putting the whole sum under the total direction and control of Panama Investment Management.

Armed with this decision making control, the Jho Low controlled Panama Investment Manager bought over UBG bank in the name of Tarek Obaid and PetroSaudi International:

Li Lin Seet – answered to Jho Low and was the signatory of the two companies that controlled the money which flowed from 1MDB to the UBG buy out

Delightfully for the young men involved, there was clearly plenty of money left over in the system to fund a very expensive life-style for Seet and some new found friends on the celebrity circuit.

But, it was a bad lesson.

Again on Facebook, Li Lin Seet gave an insight into the way he has learnt to do business:

“Most important of all we always get away with it by gaming the system hahahahaha…..”

Li Lin Seet hanging out with the big guys

Patrick Mahony – PetroSaudi Director and play-pal of Hollywood ‘bad girl’ Lindsay Lohan

The documents in our possession show how Jho Low and his team relied on a wide range of key professional advisors, mainly from the UK and the US, to pull off his deal with 1MDB.

These experts either knowingly engaged in his plan to make the PetroSaudi joint venture a “front” for further deals, or appear to have turned a blind eye to appropriate due diligence.

All of these businessmen, lawyers, bankers and politicians involved stood to make very large financial gains from their contributions to the 1MDB deal and some will face tough questions after the documents are handed in to the appropriate regulators next week.

Patrick Mahony – Investment Banker

Yachting with Lindsay – part of the new life?

This investment banker worked with the Ashmore Group, before joining PetroSaudi after the 1MDB deal as a director.

He had been involved in a previous joint venture between Ashmore and PetroSaudi, which had financed the oil company’s investments in Argentina in 2008 .

And when Tarek Obaid started negotiating with Jho Low he soon brought Mahony into the key negotiations.

After meeting Jho Low and his team for the first time Mahony wrote that he would “be happy” with the requirement that PetroSaudi should act “as a front” for Jho Low’s future deals.

It is clear that it was Mahony who masterminded the valuation of this relatively worthless oil company at a grossly inflated $2.9 billion dollars during the tense negotiations in the run up to the JV deal.

Emails show that in July Mahony had initiated an option on a so-called Farmin deal with a Canadian Company called Buried Hill, which held petroleum exploration rights in a politically contested region of Turkmenistan.

As of this time, these rights have yet to be exploited.

By September this option, which in the end cost PetroSaudi over USD$11 million to keep open, was due to expire.

Emails show that Mahony acted to extend the option for a further few weeks until the joint venture had been signed, but only after consulting with lawyers that such an extension would not bind PetroSaudi into taking up the agreement.

Mahony did not want to be “on the hook” of having to actually go through with taking up the option.

From: Patrick Mahony [mailto:Patrick.Mahony@Petrosaudi.com]
Sent: 01 September 2009 18:21
To: Paul Robinson
Subject: Re: BHE Extension Letter

Ok. Thanks.

Can we check one other thing under the psc with the turkmen govt. I presume a company must be in good standing, solvent etc or else the turkmen govt can terminate the psc. Can we please find out asap what the conditions are for the govt to terminate the psc?

Thanks

_____

From : Paul Robinson
Date : Tue, 1 Sep 2009 19:11:43 +0200
To : Patrick Mahony <Patrick.Mahony@Petrosaudi.com >
Subject : RE: BHE Extension Letter

If this doesn’t get signed we need to terminate asap and by next Tuesday at the latest

Paul Robinson

Ashmore Investment Management Limited

_____

From: Patrick Mahony [mailto:Patrick.Mahony@Petrosaudi.com]
Sent: 01 September 2009 17:59
To: Paul Robinson
Subject: RE: BHE Extension Letter

It seems to me that that is what his email is implying. As long as we are sure, then i’m ok. I’ll get them to sign an extension. When do we need to terminate by?

From: Paul Robinson [mailto:Paul.Robinson@AshmoreGroup.com]
Sent: Tuesday, 01 September, 2009 6:21 PM
To: Patrick Mahony
Subject: RE: BHE Extension Letter

We’ve no obligation if the option is extended only once it expires – is Roger claiming otherwise?

thanks

Paul Robinson

Ashmore Investment Management Limited

_____

From: Patrick Mahony [mailto:Patrick.Mahony@Petrosaudi.com]
Sent: 01 September 2009 11:18
To: Paul Robinson
Subject: Re: BHE Extension Letter

I had changed it to 120 days but apparently only in one place.
So this extends the option period, at which point we have no obligation. Once option period expires (and we don’t terminate farmin), then we are on the hook. Is that right?

_____

From : Paul Robinson
Date : Tue, 1 Sep 2009 12:13:20 +0200
To : Patrick Mahony <Patrick.Mahony@Petrosaudi.com >
Subject : RE: BHE Extension Letter

No – unless we fail to terminate the Farmin once the option period has expired – then it’s USD600k a month.

On Roger’s comments re: the extension letter – not sure I understand what he’s getting at. The letter’s attached again for reference. Is he going to sign this?

thanks

_____

From: Patrick Mahony [mailto:Patrick.Mahony@Petrosaudi.com]
Sent: 31 August 2009 22:17
To: Paul Robinson
Subject: FW: BHE Extension Letter

Are we on the hook for anything under our current agreement…? Thanks

From: Roger Haines [mailto:rhaines@buriedhill.com]
Sent: Monday, 31 August, 2009 6:03 PM
To: Tarek Obaid; Patrick Mahony
Cc: Jhocher@osler.com; Hugh Leonard; Clayton Clift
Subject: Re: BHE Extension Letter

Hi Tarek, Patrick had raised the issue of 2 months and I had said 30 days was sufficient and that if we ran out of time we can always agree to extend. His letter appears to have both 120 days from signing (60 day extension) and 90 days fro signing (30 day extension). FYI, some very fast breaking news, it looks like the Environmental Impact Assessment that the government has pushed us to commence, could now start as early as the last week in September and that under our existing agreement the funds for this will have to be available as well. Estimated cost is about $  U.S.   one million with a minimum payment of one third of the total up front. Roger

_____

From : Tarek Obaid <Tarek.Obaid@Petrosaudi.com >
To : Roger Haines; Patrick Mahony <Patrick.Mahony@Petrosaudi.com >
Cc : Jhocher@osler.com <Jhocher@osler.com >; Hugh Leonard; Clayton Clift
Sent : Mon Aug 31 08:11:56 2009
Subject : Re: BHE Extension Letter

Hi Roger,

If I remember correctly it was 60 days? Am I wrong?
T

On 31/08/2009 13:05, “Roger Haines “<rhaines@buriedhill.com >wrote:
Hi Patrick, I am having Hugh and Joe look at it, I don’t think there is any problem with extending for a month but I believe there is a small timing glitch in the main agreement that will need to be addressed as well. The extension can be signed in counterpart or if you prefer it can be signed in  London   by either Hugh or Clayton. Roger

_____

From : Patrick Mahony <Patrick.Mahony@Petrosaudi.com >
To : Roger Haines
Cc : Tarek Obaid <Tarek.Obaid@Petrosaudi.com >
Sent : Fri Aug 28 10:51:08 2009
Subject : Fw: BHE Extension Letter

Roger – as discussed, attached please find an extension letter for our deal. As we are still in discussions and the period is going to expire early next week, we should try to get this signed early next week. Many thanks. Patrick

The day after the money from 1MDB was banked, October 3rd, Patrick Mahony informed his colleagues he was planning to terminate the option.

Subsequent negotiations for a possible merger with Buried Hill were then embarked upon, but these too were dropped before the end of the year in December 2009.

Time to pull out after an extension to the option had been negotiated to cover the period till the signing of the Joint Venture?

Ed Morse – Top US Banker/ Politician

Ed Morse – Global Head of Commodities at Citigroup

Ed Morse is a senior American banker and a former Deputy Secretary of State for Energy.

He currently heads up the commodities desk at the giant US Citigroup bank, but in September 2009 he was between jobs following the collapse of Lehman Brothers, where he had previously worked.

Documents show that he was engaged by Mahony on behalf of the prospective joint venture group on September 20th, in order to value PetroSaudi on behalf of 1MDB.

As it was 1MDB’s own auditors who needed the reassurance on the asset value that PetroSaudi was allegedly bringing to the company, it might seem strange for them to have accepted a valuer who had been hired by their partner?

If so, even stranger was the fact that Morse was able to deliver his valuation of the company at a staggering USD$2.9 billion in less than ten days.

In his lengthy report Morse acknowledged that he had been heavily assisted in his preparations by information sent to him by PetroSaudi about their company.

This included, of course, the assumption that PSI was about to become a ‘Farm In’ partner of Buried Hill in their Turkmenistan concession on the Caspian Sea.

On the very day that Morse delivered his report on 29th September, 1MDB officials signed the JV Agreement.

It leaves certain questions about how hard and fast Shahrol Halmi and his fellow executives were able to read and digest this crucial but wordy valuation report, in order to check that it met their own due diligence requirements.

Because, by the end of the day they had validated it and signed all the necessary documents.

Morse, meanwhile, also on the same day of 29th September, issued an invoice for USD$100,000 for his week’s work, which appears to have been paid immediately.

Ten days later the $100,000 invoice for Morse’s report.

Tim Buckland – Senior Lawyer at White & Case

Legal firm White & Case lent its office space to the 1MDB negotiations managed by their lawyers in London

The moment the joint venture negotiations got underway in the last ten days of September, a legal team from the top London firm White & Case was drafted in to support PetroSaudi.

The firm lent its own offices to host the meetings with 1MDB when they came to London to thrash out the details on 23rd and 24th September.

This was helpful, because PetroSaudi’s own offices at that time consisted of a cramped rental space in an office hire building in Victoria.

Heading the team was Tim Buckland, who worked and re-drafted all the documents that were initially sent over by Jho Low’s office run by Tiffany Heah in New York, in order to give them the full professional touch needed to seal a deal with a sovereign government fund.

How to siphon off the $700m – White & Case Power Point presentation

In the process, Buckland must inevitably have come to understand the full mechanism behind Jho Low’s manoeuvre to siphon off $700 million of the $1 billion injected by 1MDB into the joint venture plan.

In fact, his team handily drew up a key power point presentation, in order to spell out the process to the players involved.

Full power point presentation by Case & White

The gross size of this “loan” cum “premium” does not appear to have troubled Buckland.

In fact, shortly after the deal he chucked in his job at White & Case and took up a new role as a Director of PetroSaudi at their brand new office at 1 Curzon Street, Mayfair.

Included in the documents which Buckland drew up, was a transfer of the supposed ‘$700 million loan’, allegedly paid by PetroSaudi’s parent company into its subsidiary 1MDB PetroSaudi on 25th September.

Did he ever check if the money had ever been transferred?

Because just four days later 1MDB was forced to ‘pay back’ the $700m in a hard currency transfer into the Good Star account at RBS Coutts in Zurich.

RBS Coutts – Bankers to the Queen

Earl Hume – Chairman of Coutts and Patron of the British Malaysia Society

RBS Coutts are the bankers to the Queen of England and their Chairman Earl David Hume is the son of a former British Prime Minister.

He is also the Chairman of the British Malaysian Society, amongst other august roles and appointments.

The documents available to Sarawak Report show that the private Swiss bank BIS had originally been approached to open an account for Good Star and discussed the proposed $700 million “premium” payment with Patrick Mahony.

However, it appears the deal did not sit well with their anti-money laundering compliance regulators, because the bank withdrew.

From: chr.zuc.a1@bsibank.com
To: Patrick.Mahony@Petrosaudi.com
Subject: Additional information please

Dear Patrick, 

 Please let us come back on our questions, my compliance needs some additional information before sending her presentation to our General Management. 

_________________________________________________________________ 

1. Business Plan

Outflows
USD 100         JP Morgan London
USD 200         remains at 1MDB Petro Saudi Ltd (BVI)
USD 700         will go to various accounts to be opened at BSI (says Tarik Obaid) – to explain

PM: The 100 (at JPM) and 200 (at BSI) will be used to fund the assets costs – basically exploration and production costs – and also to purchase assets. The 700m is premium that was made in the transaction and will be used to fund future transactions in any sector (not necessarily oil and gas) 

We please need additional details on the remaining 700 m : beneficiaries, location, depositary bank ?

 It seems that the Malaysian Sovereign Fund invests only in Malaysia. Is this money going back to Malaysia f.ex. and if so, when ? 

_________________________________________________________________

2. Joint  Venture Contract :  

PM: The JV company is the BVI company called 1MDB PetroSaudi Ltd and this is a JV between PetroSaudi International (Holding) Cayman Ltd and  1 Malaysia Development Berhad (Malaysia) . 

Our Compliance please needs the draft agreement between the contracting partners. 

It is difficult for her to give an opinion to our General Management  on the deal without the joint venture draft.

_________________________________________________________________

3.  “1 Petro Saudi International Holdings Cayman Ltd (Cayman) ”

What is the purpose of this account and how will it be used please ?

__________________________ _________________________________________________________________

Thank you

Christophe Zuchuat 

Directeur Adjoint 

BSI SA 
8, Boulevard du Théâtre – 1204 Genève
Tel. +41 58 809 13 52 – Fax +41 22 809 43 03
chr.zuc.a1@bsibank.com  – www.bsibank.com 
________________________________________ 

From: Patrick Mahony  [mailto:Patrick.Mahony@Petrosaudi.com]
Sent: mercredi, 23.  septembre 2009 23:21
To: Zuchuat Christophe  (BSI-Geneve)
Subject: RE: Feedback compliance positive / GM  also
Sensitivity: Confidential

Please  see answers below. Let’s discuss tomorrow. Merci

From:  chr.zuc.a1@bsibank.com [mailto:chr.zuc.a1@bsibank.com]
Sent:  Wednesday, 23 September, 2009 5:33 PM
To: Patrick  Mahony
Subject: Feedback compliance positive / GM  also
Sensitivity: Confidential

Dear  Patrick,

Thank you for your  valuable information and help.
Our compliance is  currently consolidating all information,
and will submit it  to our General Management who is already informed.
Overall, the  outlook is quite positive.

Allow me 3  questions please :
____________________

Business  Plan

Outflows
USD 100          JP Morgan London
USD 200          remains at 1MDB Petro Saudi Ltd  (BVI)
USD 700          will go to various accounts to be  opened at BSI (says Tarik Obaid) – to explain

Can you explain us  briefly where and how the money will be invested ?
We suppose the  business plan is financing oil investments/projects.
1. My  compliance has to give some sort of explanation on the 700  especially .
We are very happy  it stays at BSI.

  PM:  The 100 (at JPM) and 200 (at BSI) will be used to fund the assets costs –  basically exploration and production costs – and also to purchase assets. The  700m is premium that was made in the transaction and will be used to fund  future transactions in any sector (not necessarily oil and  gas) 

_______________________

2.  Joint Contract : it is not clear   between  which entities the  contract will be :

Joint Venture  Contract between : linked to cash flow ?
•       1Malaysia  Development Bhd (Malaysia)
•       1MDB Petro Saudi  Ltd (BVI)

Joint Venture  Contract between : linked to ownership ?
•       1 Petro  Saudi International Holdings Cayman Ltd (Cayman)
•       1MDB Petro Saudi  Ltd (BVI)

PM:  I don’t follow question, let’s discuss tomorrow. The JV company is the BVI  company called 1MDB PetroSaudi Ltd and this is a JV between PetroSaudi  International (Holding) Cayman Ltd and 1 Malaysia Development Berhad  (Malaysia).   

__________________________

PricewaterhouseCoopers
3.  Valorization of  Argentinean and Turkmenistan’s Assets :   very  important to get please

PM:  This will happen but may be another competent authority as PWC is being too  slow.

__________________________

Thank you for your  important support
Best  regards

Christophe  Zuchuat 
Directeur  Adjoint 

BSI  SA 
8,  Boulevard du Théâtre – 1204 Genève
Tel.   +41 58 809 13 52 – Fax +41 22 809 43 03
chr.zuc.a1@bsibank.com – www.bsibank.com 

Last minute, post-signing amendments to the joint venture changed the details of the bank assigned to receive the money to RBS Coutts.

Yet emails, as late as 2nd October, indicate that RBS Coutts was also having problems, as its compliance team had yet to determine who was the beneficial owner of the account that was receiving the $700 million that had been paid by 1MDB.

Shahrol Halmi told his bank to inform Coutts that the beneficial owner was a company in the Seychelles called Good Star and it appears that by the end of the day the transfer had been completed.

So, are RBS Coutts in Zurich satisfied they performed their full due diligence duties in this transactions?

Rick Haythornewaite – Top Business Executive

Rick Haythornewaite – top businessman who added the Chair of PetroSaudi to his list of appointments

This top British businessman is the Chairman of PetroSaudi deal and has held that position since before the joint venture deal.

He has also been Chairman of Master Card, Network Rail and currently he is the Chairman of Centrica (British Gas).

Haythornewaite is believed to receive a lucrative salary, in return for working two days a week at the PetroSaudi offices, which were originally a short step away from his residence near Victoria.

It is clear that he was not engaged in the direct correspondence surrounding the original 1MDB transaction.

However, he was closely involved in the merger talks with Buried Hill and he subsequently engaged extensively with investors, as PetroSaudi sought to expand its operations, following the injection of what eventually nearly totalled $1 billion in lending from 1MDB.

From: Rick Haythornthwaite [mailto:rh@rhaythornthwaite.com]
Sent: 16 December 2009 14:17
To: jen…….od.com
Subject: Re: BHE

D

We have indeed broken off negotiations with BHE for good reason. Plenty to get on with though.

Let’s meet up in the New Year.

In the meantime, have a great Christmas.

With best regards

Rick Haythornthwaite

rh@rhaythornthwaite.com

_____

From : <jenk….ood.com >
To : Rick Haythornthwaite <rhaythornthwaite@star-capital.com >
Cc : David Allen <allen_david_c@yahoo.co.uk >
Sent : Mon Dec 14 04:11:31 2009
Subject : BHE

Rick
I’ve heard a rumour that the PSAE deal with Buried Hill has been called off. If correct that’s a shame given all the effort you’ve put in to make it work. And as we discussed when we met late October I did think it would have been a great “anchor asset “for PSAE, subject of course to resolving the boundary dispute between Azerbaijan and Turkmenistan.

Anyway hopefully you have a Plan B for PSAE? In principle it remains a great vehicle for the upstream hydrocarbon sector.

I’m in the UK for the next couple of months if you thought there was merit in a further chat.

Regards

Records seen by Sarawak Report show that after the $300 million injected in the initial transaction there were at least two more tranches of lending by 1MDB into PetroSaudi of $340 million in July 2010 and another $340 million in September 2010.

Tony Blair – International Politician

Tony Blair – criticised over conflicts of interests by mixing business with politics in the Middle East

The benefits of getting Tony Blair in as a paid ‘Ambassador’ for PetroSaudi were obvious for previously this little known company trying to create a front as a major player.

Blair himself is the current Middle East Envoy for  the US, EU, UN and Russia, but his private business activities run parallel to his continuing political activities, raising widespread criticism in the UK.

Earlier revelations by the Sunday Times showed that PetroSaudi had hired him on a contract for $65,000 a month and a 2% cut on any oil deal that he had a hand in negotiating.

In the January following the 1MDB PetroSaudi Joint Venture, an emailer calling themselves  “Number One” sent PetroSaudi Director Patrick Mahony some answers for a Star Newspaper Journalist, who had provided a list of questions for PetroSaudi International, which had just announced its buy out of the Sarawak bank UBG.

Question 1) There is speculation/expectations that this deal involving UBG, will eventually see the involvement of one of your jv partners 1MDB. Is this true and why (not)?

Answer: The move to acquire, privatise and delist UBG is envisaged as a venture to be undertaken solely by PetroSaudi International…..

…. Question 4) There is a cynical view that the deal is in some ways, a bailout of CMSB [Cayha Mata Sarawak Berhad], controlled by the Sarawak Chief Minister’s family. Your comment please

Answer: PSI is a reputable international company owned by Sheikh Tarek Obaid jointly with the Royal Family of the Kingdom of Saudi Arabia. Our main objective is to look for good partners and value propositions for our stakeholders. We have no interest in the fortunes of CMSB…

From: Number One

To: patrick.mahony@petrosaudi.com

Date: Wed, 13 Jan 2010 17:52:09 +0800

Subject: response to the star re ubg

Attachment(s): 1

From: Number One
To: patrick.mahony@petrosaudi.com
Date: Wed, 13 Jan 2010 17:52:09 +0800
Subject: response to the star re ubg

Email to ++++++++++++++ of The Star.

1) There is speculation/expectations that this deal involving UBG, will eventually see the involvement of one of your jv partners 1MDB. Is this true and why (not)?

Answer: The move to acquire, privatise and delist UBG is envisaged as a venture to be undertaken solely by PetroSaudi International.  As part of our corporate strategy, PSI enters into joint-ventures with different partners or sometimes chooses to go it alone when the occasion or opportunity demands for us to do so. PSI’s JV with 1MDB will afford significant opportunities in the energy sector in the Middle East and this region but is a separate venture from the one PSI is pursuing with UBG.

2) As far as listed construction companies are concerned, there are several industry stalwarts in the country that make attractive takeover targets. Why did you pick UBG? What value can it bring you?

Answer: PSI were presented with several possibilities but none had the full suite of options which were looking for, namely not only having a strong construction arm but also upside in oil and gas. It is also a plus that UBG’s subsidiaries – Putrajaya Perdana and Loh & Loh – have a strong niche in the respective areas.

3) The plan would involve delisting UBG from the stock exchange. What do you plan to use UBG as a vehicle for and which sectors primarily and would it necessarily involve purely the construction sector?

Answer: PSI and UBG complement each other with their own unique strengths and capabilities. Our upstream oil & gas expertise will add value to UBG’s existing investments in the sector while we see ourselves benefitting from UBG’s strength in constructions and water infrastructure. This relationship offers a unique opportunity for mutual value creation.

4) There is a cynical view that the deal is in some ways, a bailout of CMSB, controlled by the Sarawak Chief Minister’s family. Your comment please

Answer: PSI is a reputable international company owned by Sheikh Tarek Obaid jointly with the Royal Family of the Kingdom of Saudi Arabia. Our main objective is to look for good partners and value propositions for our stakeholders. We have no interest in the fortunes of CMSB.

One can speculate on the identity of this spokesman for UBG/ CMS.

Li Lin Seet – early connections with UBG buy out

However the identity of the Number One person in charge of Sarawak at that time was never in doubt.

It was Taib Mahmud, whose family had scandalously enjoyed an almost 100% ownership of UBG bank until quite recently.

Under pressure to sell out and facing less profitable times for banking anyway, the Taibs had been engaging in a number of deals regarding UBG.

In May 2008 the then public company expended a nominal sum acquiring a 51% shareholding in a newly incorporated Cayman Island company called Unity Capital International, which in turn had 100% ownership of a SNG$2million Singapore subsidiary called Unity Capital Management.

Best pals and business allies – Jho and Seet enjoying the fruits of their activities

The Vice President of Unity Capital Management from August of that year was, according to his LinkedIn page, Jho Low’s long term business colleague Li Lin Seet.

Later, in July 2008, UBG made a massive new share issue in return for acquiring a company worth RM332million, according to its parent company CMS’s Annual Report of that year.

Those new shares were restricted entirely to one company buyer nominated by the seller (in contravention of stock market rules), making this new player an eventual 52.6% shareholder in the bank according to UBG’s later 2009 Annual Report.

How Majestic Masterpiece acquired a huge chunk of UBG bank in a restricted share issue in July 2008

The company concerned was Majestic Masterpiece, owned by a Middle Eastern consortium (called the Abu Dhabi-Kuwait-Malaysia Investment Corporation) represented by none other than Jho Low.

Even richer than Jho Low – Sarawak’s billionaire CM Taib Mahmud brought in Low to front a buy out of his UBG bank shares

According to media reports, Jho Low at one point claimed he had a 10% stake in Majestic Masterpiece and the buy out gave him a place on the UBG board, alongside Taib’s son Mahmud Abu Bekir and son in law, Syed Ahmad Alwee Asree.

However, the 2009 Annual Report registered him as having a zero shareholding in the register of Director’s Interests.

It was widely known by this stage that the Taibs were strenuously looking for a buyer for the bank.

In fact, no less than three earlier deals had fallen through, when in January 2010 the Taib family parent company CMS announced that its subsidiaries had received an offer for their shares in UBG from PetroSaudi International for a total consideration of RM465,525,388 (USD$130million)

PetroSaudi announced its buy out proposal for UBG in January 2010

Given all the connections therefore, between Taib and Jho Low and the fact that PetroSaudi’s only other high profile involvement in Malaysia was its recent deal with 1MDB, into which the state development company had poured so much money, the questions by journalists such as those from the Star were not at all surprising.

However, PetroSaudi and Jho Low have all specifically and repeatedly denied that any of the money from the 1MDB joint venture deal was channelled into Taib’s UBG bank buy out.

The document trail that links 1MDB money to UBG

Before – PetroSaudi’s low rent office space in Greatcoat Place

However, Sarawak Report’s analysis of thousands of emails and documents relating to PetroSaudi and 1MDB indicates that this was a company with very little cash base and few real assets with which it could buy out UBG.

A valuation of USD$2.9billion dollars, which had been presented to 1MDB in advance of the joint venture, was based mainly on a temporary negotiation with a Canadian company called Buried Hill, which had an unexplored oil field concession.

However, those negotiations fell through straight after the signing of the joint venture agreement.

Frantic negotiations during late August had enabled PetroSaudi to extend their options for a few more weeks till the end of September, at a total cost of just over $11 million – but the so-called Farmin agreement was terminated on October 4th, two days after 1MDB’s money was transferred into the Good Star account.

After the deal – plush suites at 1Curzon Street in Mayfair

PetroSaudi and Buried Hill then entered into new negotiations over a possible merger of the two companies over the coming months.

However, by December the prominent British business figure, who had been brought in to act as Chairman of PetroSaudi, Rick Haythornewaite, was confirming that all negotiations had been called off.

“We have indeed broken off negotiations with BHE for good reason.” Haythornewaite informed a contact in December 2009.

This meant that in January, at the time of the offer for UBG, PetroSaudi could no longer claim the USD$2.9billion asset base it had boasted of in September to 1MDB.

The company had received a working capital of USD$300 million from the deal with 1MDB and the documentation shows that at least two further tranches of USD$500 million were drawn from 1MDB later in July 2010 and September 2010 under the Murabaha Loan Agreement, which had been set up after the original Joint Venture was dissolved in March 2010 (a day before it would have been necessary to disclose the terms of the JV agreement including the $700 million “loan repayment” in the accounts).

Both of these further tranches from 1MDB were divided into separate bank accounts, giving USD$340 million to the PetroSaudi operating account with JP Morgan in Geneva and USD$160 million to the Good Star account with RBS Coutts in Zurich.

Further payments to the Good Star account reach a total of at least USD$1.2billion paid by 1MDB

There seems to have been no attempt on these later occasions to explain the reason for the transfers to Good Star, in terms of a loan or anything else. But Shahrol Halmi signed the transfers on behalf of 1MDB, which was paying all the cash into the 1MDB PetroSaudi Joint Venture.

MURABAHA FINANCE AGREEMENT JUNE 14th 2010

DRAWDOWN NOTICE SEPT 2014

Research by Sarawak Report has indicated that much of the working capital, which had passed under the control of the actual joint venture company, run by PetroSaudi from its new London base in Mayfair’s Curzon Street, was invested in new oil exploration and actual drilling.

Two drill boats were purchased for around a quarter of a million dollars, in order to exploit a new concession gained by the company in Venezuela.

So, the money to buy out UBG looks to have come from elsewhere and the evidence, in fact, shows very clearly how that the $700 million “loan repayment” was channeled into the company PetroSaudi International in the Seychelles, which eventually acted as the buyer for UBG.

How Tarek Obaid surrendered control of the USD$700 million loan repayment

PetroSaudi Director Tarek Obaid fronted the buy out..

A significant document indicates that back at the time of the signing of the 1MDB Joint Venture, September 29th 2009, the PetroSaudi Director Tarek Obaid specifically surrendered all rights to the so-called loan repayment to his company by 1MDB.

He signed a seemingly strange letter from PetroSaudi’s head office in the Caymans to PetroSaudi International Limited, PO Box 1239, Seychelles (naturally assumed to be a direct subsidiary) in which he declared:

“..we have directed the Company [1MDB PetroSaudi JV] to pay a sum of USD700 million (the “Transferred Amount”) to your account. We write to confirm that we shall have no rights, title or interest whatsoever in and to the Transferred Amount or any part thereof which shall be paid by the Company to PetroSaudi International Limited and we shall make no claims whatsoever in respect thereof (whether in respect of PetroSaudi International Limited or any of your affiliates) and we hereby expressly acknowledge that henceforth PetroSaudi International Limited is the only person entitled to the legal and equitable title and interest on and to the Transferred Amount which shall be paid by 1MDB PetroSaudi Limited to PetroSaudi International Limited pursuant to the abovesaid letter.”

OBAID LETTER TO PETROSAUDI SEYCHELLES

STRICTLY PRIVATE AND CONFIDENTIAL

The Board of Directors
PetroSaudi International Limited
P.O. Box 1239,
Offshore Incorporations Centre,
Victoria, Mahe,
Republic of Seychelles.

Dear Sirs,

Loan Agreement dated 25 September 2009 between PetroSaudi Holdings (Cayman) Limited and 1MDB PetroSaudi Limited (the “Loan Agreement”)

We refer to our letter dated 29 September 2009 addressed to 1MDB PetroSaudi Limited (the “Company”) in respect of the above matter.

Pursuant to the said letter, we have directed the Company to pay a sum of USD700 million (the “Transferred Amount”) to your account. We write to confirm that we shall have no rights, title or interest whatsoever in and to the Transferred Amount or any part thereof which shall be paid by the Company to PetroSaudi International Limited and we shall make no claims whatsoever in respect thereof (whether in respect of PetroSaudi International Limited or any of your affiliates) and we hereby expressly acknowledge that henceforth PetroSaudi International Limited is the only person entitled to the legal and equitable title and interest on and to the Transferred Amount which shall be paid by 1MDB PetroSaudi Limited to PetroSaudi International Limited pursuant to the abovesaid letter.

Yours faithfully,

………………………………………

Tarek Obaid

Authorised Signatory

It might seem odd for a parent company to make such a commitment to a subsidiary.

However, there was actually no evidence that such a subsidiary actually existed within the PetroSaudi group structure. Anyway, it is clear from the documents that in the first instance the $700 million was paid into an entirely different company, Good Star Limited.

Shared Mail Box address for the two companies in the Seychelles, but no incorporation records.

Our researches indicate that there is no company by the name of PetroSaudi International Limited actually incorporated in the Seychelles, according to the islands’ official online corporation records.

Nor for that matter is Good Star Limited (which is in fact incorporated in the Cayman Islands) – however both these two companies do share the same mail box address PO Box 1239 at the Offshore Incorporations Centre in Mahe.

Panama Investment Manager

As demonstrated, the $700 million dollars over which Tarek Obaid had surrendered all rights, (followed by another $320 million in total) had in fact been sent to Good Star anyway, not PetroSaudi International Limited (Seychelles).

Brains behind PetroSaudi, Director Patrick Mahony

However, another interesting document, also drawn up by Jho Low’s legal assistant Tiffany Heah and sent to Patrick Mahony on 28th September, indicates that a sum of USD$610 million was indeed planned to make its eventual way into the PSI Seychelles company based at the same address as Good Star.

This document lays out an ‘Investment Management Agreement’ between PetroSaudi International Limited ‘incorporated in the Seychelles’ and Panama Investment Manager ‘incorporated in Panama’.

Under the agreement, PSI Limited agrees to surrender control over a sum of USD$610 million to Panama Investment Manager, allowing it to invest the money as it sees fit for a period of ten years.

Tarek Obaid signed the document on behalf of PSI Seychelles, which is described as a wholly owned subsidiary of  PetroSaudi Holdings (Cayman) Limited (Company No.: MC-231027).

Panama Investment Manager was put in direct charge of $610 million dollars – and it was controlled by Jho Low through his deputy –   Li Lin Seet

Signing for Panama Investment Manager was Jho Low’s side-kick Li Lin Seet, on behalf of the company’s board of directors.

This clearly secured control of the money by Jho Low, even though it was nominally being spent “via” PetroSaudi (Seychelles).

In short, PSI was acting as a front for Jho Low’s investments, just as Patrick Mahony had agreed on Day One. Crucially the contract spelt out:

During the continuance of its appointment hereunder, the Investment Manager….shall have full discretion to manage and to invest or divest the whole or part of the investments of the Client… as it deems fit.

For the initial investment, the Client shall subscribe for 610 million non-voting ordinary shares of USD1.00 each in the capital of the Manager

PANAMA INVESTMENT DOCUMENT – sent by Jho Low’s lawyers

Further documents prepared in the rushed week leading up to the joint venture give all the evidence that could possibly be needed to confirm the suspicion that the money being controlled by Panama Investment Manager on behalf of PSI Seychelles emanated from the exact same USD$700 million payment due from 1MDB.

This is because Jho Low and his colleague Li Lin Seet had even prepared a power point entitled ‘Internal Presentation on The Use Of Funds” for PSI’s “Internal Management” to make the situation clear to their PSI colleagues.

The accompanying email exchanges reveal that the masterminds in New York wanted to make sure that their London based “front” operators could be in no doubt about what was going to be done with the money and who would control it:

Li Lin Seet sent the Power Point to PetroSaudi Managers on 28th of September one day in advance of the signing of the joint venture:

From: SEET Li Lin [mailto:seet.lilin@gmail.com]
Sent: Monday, 28 September, 2009 1:23 AM
To: Patrick Mahony

Subject: Internal Presentation on Asset Allocation

Li Lin Seet’s Power point presentation on how the funds would be used

The rest of the power point is self-explanatory:

Jho Low’s INTERNAL MANAGEMENT PRESENTATION ON FUNDS ALLOCATION 

The full document explains in clear detail how $90 million ‘loan repayment’ provided by 1MDB would be retained for ‘expenses’, while the remaining $610 million would be placed in the hands of “trusted partners”, “via PSI (Seychelles)”.

That trusted partner, who had “full discretionary management power” over the money, was the company Panama Investment Manager, of whom the signatory was Jho Low’s trusted henchman Li Lin Seet.

However, in his emailed reply Mahony made clear that he found such an open declaration of the state of affairs to be unnecessarily indiscreet.

“I don’t think this is necessary, the Investment Management Agreement will suffice” he rapped out

To which Jho Low replied:

“No probs. Was just being extra careful to be sure”

FULL EMAIL EXCHANGE – PRESENTATION ON ASSET ALLOCATION

From: jho.low@gmail.com
To: Patrick Mahony; SEET Li Lin
Date: Mon, 28 Sep 2009 03:36:00 +0000
Subject: Re: Internal Presentation on Asset Allocation

No probs. Was just being extra careful to be sure. All good now I hear.

Sent via BlackBerry from T-Mobile

_____

From: Patrick Mahony
Date: Mon, 28 Sep 2009 05:35:12 +0200
To: SEET Li Lin<seet.lilin@gmail.com>
Subject: RE: Internal Presentation on Asset Allocation

I don’t think this is necessary. The investment management agreement will suffice. Let’s discuss

From: SEET Li Lin [mailto:seet.lilin@gmail.com]

Sent: Monday, 28 September, 2009 1:23 AM
To: Patrick Mahony
Subject: Internal Presentation on Asset Allocation

Resending due to mail error.

PSI Seychelles will not have any management rights or control – fund manager will have full discretionary management power

Since Panama Investment Manager was also a company controlled by Jho Low, through its signatory Li Lin Seet, this is confirmation that the money siphoned off from 1MDB was now in the hands of the tycoon pal of the PM, who had driven through the entire deal from start to finish.

No surprise?

The following January it was announced that the offer for UBG bank from PetroSaudi was being extended by its ‘subsidiary company’ based in the Seychelles, PetroSaudi International Limited.

Tarek Obaid signed the buy out in the capacity of Director of the company and it was announced to the world that this was a purchase by PetroSaudi and it had nothing to do with money siphoned out of 1MDB.

Jho Low and Paris Hilton partying in St. Tropez

With the new available information this is a contention that is hard to sustain.

Journalists are therefore entitled to return and ask Jho Low and 1MDB their original question, whether it is not the case that the money employed in the UBG bank buy out was indeed a “bail out of CMSB” using public funds via 1MDB?

And had PetroSaudi not indeed acted out the role as “a front” for Jho Low, which at the very start of their negotiations on Sept 9th Director Patrick Mahony had written to agree the company would be “very happy with”?

Having fun on Malaysia’s development budget? Tycoon Jho Low at a regular jaunt with Paris Hilton

Together with London’s Sunday Times newspaper, Sarawak Report has completed an in-depth investigation into the trail of the missing billions at the heart of Malaysia’s 1MDB (One Malaysia Development Berhad) financial scandal.

We have obtained access to thousands of documents and emails relating to transactions by 1MDB, including its initial joint venture with the little known oil company PetroSaudi International from 2009.

What the documents establish is that, in spite of copious official denials, the entire joint venture project was conceived, managed and driven through by the Prime Minister’s associate and family friend the party-loving billionaire tycoon, Jho Low.

The documents also prove that the USD$700 million so-called “loan” that was supposedly repaid to PetroSaudi as part of the joint venture agreement, was in fact directed into the Swiss bank account of a company called Good Star, which is controlled by Jho Low.

That money was then partly used to buy out Taib Mahmud’s UBG bank in Sarawak at a very advantageous price for the chief minister and his family, who had been failing to get a deal on the open market.

PetroSaudi had agreed to act as “a front” for Jho Low on such deals, according to the documents, and it was a subsidiary of PetroSaudi International registered in the Seychelles, which bought UBG, using money siphoned from 1MDB.

How Jho Low managed the 1MDB PetroSaudi Joint Venture deal

Brains behind PetroSaudi, Director Patrick Mahony

Among the email exchanges obtained by Sarawak Report are documents from an initial meeting that took place in New York on September 8th 2009, between the then Wynton Capital head, Jho Low and the UK businessman Patrick Mahony, who had been introduced a few days earlier by PetroSaudi’s CEO, Tarek Obaid.

Mahony worked for the investment group Ashmore, which was funding PetroSaudi’s main operation, an oil well in Argentina.

Also at the meeting were two of Jho Low’s close colleagues, Li Lin Seet and a UBG bank lawyer, Tiffany Heah.

In an email written to “Jho, Seet and Tiffany” the following day, Mahony made clear on behalf of PetroSaudi that the company was very willing to become involved in a series of deals proposed by Jho Low, which were expected to involve 1MDB and Petronas.

Mahony also understood that Jho Low wanted “to use PetroSaudi International as a front” for certain deals and he said that “we would be happy to do that”:

“Jho / Seet / Tiffany” begins the lengthy email

“….I think what would make sense is that we set up a joint venture where we contribute our assets and you can contribute cash to match our asset base. We can then decide where that cash goes. Some of it may go to paying us back for some cost and some should stay in the JV for new acquisitions. We can discuss how those acquisitions will work and how money should flow once we do the deals through the JV…. I am assuming here that 1MDB will be our partner first and that Petronas will come in later…. Over time, Petronas could buy the JV and both PSI and 1MDB would have made a big return on the initial investment.

Lastly, we know there are deals you are looking at where you may want to use PSI as a front, we would be happy to do that. You need to let us know where….  On this idea of being a front, we need your input”

[PSI FRONT EMAIL]

Patrick Mahony 
To:Jho Low 
Subject:Cover Email – Read First

Jho / Seet / Tiffany,

Many thanks for your time the other day. As discussed, there seems to be a number of things we can do together. However, I think we should try to focus on the more actionable ones for now and we can then spend more time exploring some of the other areas where we might be able to cooperate. In my mind, the immediate businesses to focus on are upstream oil and gas and oil services through PetroSaudi International (PSI) and related companies. Other than that, there are more opportunities we can discuss and I will mention them later. What I have tried to do below is break out the various deals and what some next steps might be. I will also be sending you presentations in separate emails (files are too big to send in one email) to give you more detail on each opportunity.

PetroSaudi – Upstream

This is the main deal and the first one we should work on together. The opportunity here is to buy into a platform with assets in Argentina and Turkmenistan at the moment but with good access to other assets in the Caspian, Middle East, Latin America and West Africa. There are many deals PSI on offer to PSI at the moment and, with the right financial and technical partner, we could close these quickly.

I have sent you for your reference a brief presentation on PSI and a quick one-pager on what the PSI story is and what the opportunity is for an investor/partner.

Briefly, we can value the Argentinean assets at around $50-$75m and the Turkmenistan asset at around $700m pre-border dispute being resolved and $1b-$1.5b after the border dispute is resolved. Argentina has approximately 30m barrels of oil and Turkmenistan 500m. If we do the deal we want with the Canadian company that currently owns the asset in Turkmenistan, we will also pick up a block in the Gambia but the value of this unclear at this point. Argentina also merits a good amount of discussion because there are different ways to look at this and it depends on our partner’s appetite for Argentina.

I think what would make sense is that we set up a joint venture where we contribute our assets and you can contribute cash to match our asset base. We can then decide where that cash goes. Some of it may go to paying us back for some cost and some should stay in the JV for new acquisitions. We can discuss how those acquisitions will work and how money should flow once we do the deals through the JV.

We also have a solid, experienced operating team in PSI and we can use them to work with Petronas when we decide it is time for Petronas to enter the JV or the assets directly. I am assuming here that 1MDB will be our partner first and that Petronas will come in later. If this is the case, we can have Petronas either come into the JV or partner with us directly at the asset level and fund the development costs. I somewhat favour the latter as this would guarantee funding for the assets for development and it is also very standard in the industry to have farm-ins by technical partners. Over time, Petronas could buy the JV and both PSI and 1MDB would have made a big return on the initial investment. This is just a thought on structure, we can obviously discuss what you have in mind and what you think would be appropriate. We can also merge our Turkmenistan asset with the one Petronas has (would make sense).

Lastly, we know there are deals you are looking at where you may want to use PSI as a front, we would be happy to do that. You need to let us know where. We can, for example, buy one oil and gas company in Indonesia (called Star Energy – I have guaranteed access to that deal) and could use that as a platform. On this idea of being a front, we need your input but if Indonesia is one place where you would like to be, we could buy this as a local platform to do more deals.

In Summary, I think PSI in upstream is the first deal we should look at together. I think we should aim at answering the following questions as a next step:

1. Who will be the partner in the JV with PSI? 1MDB or Petronas?
2. What is the right structure?
3. How do you want to run DD on this? I have set up virtual data rooms for both Turkmenistan and Argentina but you need to help us help you and let us know what sort of teams will be conducting DD for you, what info they will want etc. From our side our full technical team out of London will be available to assist you and your team in your technical/asset DD. However any discussion on the JV and how that will work will only be with Tarek and me.
4. What is a realistic timeline to close a deal (I think this will depend somewhat on 2 above)? 

PetroSaudi – Oil Services

PSI has recently gotten involved in oil services through Ashmore, the emerging market fund manager I was telling you about. Ashmore owns a company called Neptune that has two drill ships and a semi-submersible and company called Rubicon that owns FPSO’s (Floating, Production, Storage and Offloading vessels). PSI has options to buy into these companies or buy them outright. (I have sent you presentations on both Neptune and Rubicon.)

Furthermore, PSI is in the process of forming a JV with Venezuela’s national oil company (PDVSA) to do oil services in Venezuela. There is a big opportunity here because many companies (Halliburton etc) are either looking to get out of Venezuela or are being forced out. What we are doing is taking over these assets (cheaply) and putting them in a JV with PDVSA, where PDVSA would guarantee very long term contracts on the assets. Venezuela has rapidly declining production and a big need to reverse this so the government is very focused on the country’s services industry and making sure Venezuela’s exploration and production is being looked after properly. We can easily invest quite a bit of money into this JV and get a fast return on cash through the contracts PDVSA would give the JV. We could also put some of the Neptune or Rubicon assets in this JV.

Another deal in this space is with the Schahin group in Brazil. Schahin are a very large construction and finance group in Brazil and the head of the group runs the Brazil-Arab Chamber of Commerce (which is how we know him). After making it big in construction and finance, Schahin decided to enter the offshore oil services sector, realising that Petrobras would be driving global demand for this industry going forward. They have since bought drill ships and semi-submersibles and have them all contracted out to Petrobras (this is rare in the industry, most people buy vessels and then look for contracts – here the contracts are there so revenue is guaranteed once the vessel is ready for service). Some of the vessels are still in ship yards in Korea and China and these require financing to complete them. The deal here is to provide Schahin with financing so that the ships get built and can start working on the guaranteed contracts from Petrobras. Schahin is already the largest offshore oil services company in Brazil and the opportunity here is to become a partner/shareholder in this company. This would put anybody who is serious about offshore oil services instantly in the country that will control approximately 30% of the offshore oil services market for the foreseeable future. We like this deal a lot and the partner, Schahin, is a stellar, blue-chip group in Brazil. Investment required here is approximately $600m.

In summary, the offshore oil services space is very interesting to us as it is an asset-intensive business that generates large, steady cash flow (day rates on these vessels are from $100k per day to $500k per day). You can leverage the assets with banks and the key is getting contracts with national oil companies where, again, the Saudi influence helps (as we have demonstrated in Venezuela). The deals in this space require large numbers so we need an investor with deep pockets if we are going to do this.

As discussed, it is my understanding that MISC, Petronas’ service company, has a desire to become big in this space. If so, we could make MISC larger overnight by selling them Neptune, Rubicon and then having them enter into this JV with the Venezuelan National Oil Company (that the Saudis can control because of the relationship in OPEC) and with Schahin, the largest supplier of offshore vessels to Petrobras, who in turn is the largest contractor of offshore vessels in the world (and where MISC already has an FPSO operating).

Again, there may be a 2-step transaction we can do here by first doing deals with 1MDB before getting MISC in. There is value in consolidating a few assets under one roof before the ultimate owner comes in. So 1MDB and PSI could again make a return on their investment before the ultimate buyer acquires the company. Again – just a thought on structure, you need to tell us what is achievable on your end and who will actually be doing this.

Next steps here would be:

1. Determine whether MISC, Petronas or 1MDB have appetite for this space? If so, how much? Between an acquisition of Neptune+Rubicon, the JV with PDVSA and the Schahin deal we could be talking up to $2b of cash required (of course some of this is financeable).
2. If this is interesting, decide which deals we should do first?
3. Discuss structure.
4. Let us know timing and how you would want to DD.

Other

As discussed, there are a few other areas we are active in and maybe some other areas you would like to work with us in. Below are areas we would certainly be willing to discuss with you.

1. Saudi Arabia – are there any sectors/industries that Malaysia would like to be involved in in KSA? If so, we would be happy to discuss and see how we can help you enter the Kingdom for those areas.
2. Waste Management – I have sent you a presentation on this business. As per my email earlier this evening, this is certainly a company and sector we like and we have the right ingredients of technical know-how, experienced management and government support to make this very successful globally. However the company is currently undergoing a bit of a restructuring and overhaul so we will not be ready to discuss M&A opportunities until January. In any case, I think we have plenty to do between now and then.
3. Funds – do you invest in funds through Khazanah or any other sovereign pools in Malaysia? As discussed, we have access to a few managers we like and have helped them to get funds to manage from various Saudi sovereign sources. There are opportunities here to also get Malaysian funds under management with these managers and even buy pieces of the management company. There a few deals we can do here but need to understand if a) you have pension, SWF or other money that goes to independent fund managers and b) if you have interest in owning fund management businesses. One interesting structure would be for 1MDB (or another vehicle) to buy a stake in an asset management company (we have a few with teams with good track records) and then make sure that funds come in from whichever sovereign sources. We can discuss.
4. Real Estate – we are putting together a fund (see presentation emailed) that will manage Saudi sovereign funds to invest in UK real estate. There is a benefit from being a sovereign investor in UK real estate because you don’t pay capital gains taxes. The idea here is to start with UK but then raise more Saudi sovereign funds over time and grow this to buy real estate internationally. We have a good team set up and are ready to go on this. We thought maybe we could make this a fund with both Malaysian and Saudi investors – a sort of joint Malaysian/Saudi real estate fund. We will own the management company here so we will obviously give a piece of it to whoever can bring funds to manage. Again, we can discuss.
5. Other – we are happy to discuss anything from your end you would like us involved in.

I have tried to list the main things we are involved with above and have been very transparent. I know I don’t need to say this but a lot of the information I have given you is very confidential and the principals involved here would prefer to keep it that way. The idea is to be open so we don’t waste any time and can quickly see what we can do together.

I suggest we meet again soon to discuss all of this. We really need to nail down what deals interest you, structures and how funds would flow. What I have tried to think of here are deals that are very standard in the industries we are talking about and would therefore be very justifiable to any investment committee. I am also thinking of structures where funds need to move a few times, which generally makes it easier for any fees we would need to pay our agents.

I look forward to hearing from you.

Best,
Patrick

This letter from Mahony was also significant in that it conceded that PetroSaudi in fact had virtually no real “asset base”, even though the company planned to achieve a paper valuation for the purposes of the joint venture of well over $2 billion.

This valuation was to be based on an oil concession in Turkmenistan, which was actually still owned by a completely separate Canadian company, called Buried Hill, with whom Mahony had initiated negotiations for a possible joint venture in July:

“Briefly, we can value the Argentinean assets at around $50-$75m and the Turkmenistan asset at around .. $1b-$1.5b after the border dispute is resolved. Argentina has approximately 30m barrels of oil and Turkmenistan 500m. If we do the deal we want with the Canadian company that currently owns the asset in Turkmenistan, we will also pick up a block in the Gambia but the value of this unclear at this point”

Despite PetroSaudi being essentially valueless, therefore, it nevertheless apparently held one key advantage for Jho Low’s purposes of creating “a front” – the owner, a friend of the Director Tarek Obaid, was Prince Turki bin Abdullah, one of the sons of the then King of Saudi Arabia.

Founding owner of PSI, Prince Turki bin Abdullah

Jho Low was clearly eager to move swiftly ahead with a deal, because from this date the correspondence shows that negotiations for the 1MDB PetroSaudi joint venture were conducted at a breakneck speed, all at the initiative of Jho Low and his team, who were skillfully abetted by the UK businessman Patrick Mahony.

Also dated on September 9th, for example, is an email sent by Jho Low’s colleague Li Lin Seet to Tarek Obaid and Patrick Mahony, on the subject: “Proposed Timeline For Joint Venture with PetroSaudi”.

In the email Seet said that Low had “spoken to the Top Boss” and that there was a “target to close a deal by 20th Sept where all agreements are signed and monies can be paid to PetroSaudi before end of Sept.”

Low, who was copied in on the email trail, ‘replied to all’ the next day:

“We need to move fast n we need as much detailed info u have as fast as possible. We want to sign and pay by sept 09. Wil be emailing out a timeline”[sic].

[EMAIL PROPOSED TIMELINE]

    Great.

Sent via BlackBerry from T-Mobile

_____

From : Patrick Mahony
Date : Fri, 11 Sep 2009 00:55:57 +0200
To : Taek Jho Low <jho.low@gmail.com >; Seet Li Lin <seet.lilin@gmail.com >; Tarek Obaid <Tarek.Obaid@Petrosaudi.com >
Subject : Re: Proposed timeline for JV with PetroSaudi

Jho – fully understood. I have been preparing virtual datarooms for you, which we will give you access to. In terms of me emailing you the potential deals and some info, I apologise for the delay but we were working on signing a deal this week, which we finally did late last night and this has taken a lot of my time. I have also been in a different city everyday since I left you in new york. I am preparing something to send to you and you will get it overnight tonight. Thanks

_____

From : “jho.low@gmail.com”
Date : Thu, 10 Sep 2009 23:15:17 +0200
To : seet.lilin@gmail.com <seet.lilin@gmail.com >; Patrick Mahony <Patrick.Mahony@Petrosaudi.com >; Tarek Obaid <Tarek.Obaid@Petrosaudi.com >
Subject : Re: Proposed timeline for JV with PetroSaudi

We need to move fast n we need as much detailed info u have as fast as possible. We want to sign and pay by sept 09. Wil be emailing out a timeline.

Sent via BlackBerry from T-Mobile

_____

From : seet.lilin@gmail.com
Date : Thu, 10 Sep 2009 21:13:12 +0000
To : Patrick Mahony <Patrick.Mahony@Petrosaudi.com >; Tarek Obaid <Tarek.Obaid@Petrosaudi.com >
Subject : Re: Proposed timeline for JV with PetroSaudi

Hi Patrick,

Are you guys going to include the waste mgmt company as one of the assets? That would fall under our radar as well. Can you please include it?

Thanks

Sent via BlackBerry from T-Mobile

_____

From : Patrick Mahony
Date : Wed, 9 Sep 2009 20:13:40 +0200
To : Seet Li Lin <seet.lilin@gmail.com >; Tarek Obaid <Tarek.Obaid@Petrosaudi.com >
Subject : Re: Proposed timeline for JV with PetroSaudi

Yup – on my end should be me and tarek cc’ed on everything. Thanks

_____

From : SEET Li Lin
Date : Wed, 9 Sep 2009 19:52:19 +0200
To : Patrick Mahony <Patrick.Mahony@Petrosaudi.com >; Tarek Obaid <Tarek.Obaid@Petrosaudi.com >
Subject : Re: Proposed timeline for JV with PetroSaudi

Dear Tarek,

FYI. Jho has instructed me to keep you posted on our progress.

Regards

Seet

On Wed, Sep 9, 2009 at 12:34 PM, Patrick Mahony <Patrick.Mahony@petrosaudi.com >wrote:

I am gathering presentations for you and you will have an email from me latest tomorrow morning my time. This is good news. Many thanks. Patrick

_____
From : SEET Li Lin
Date : Wed, 9 Sep 2009 18:28:58 +0200
To : Patrick Mahony <Patrick.Mahony@Petrosaudi.com >
Subject : Proposed timeline for JV with PetroSaudi

Dear Patrick,

Jho has spoken to the top boss and received the following guidance:

1) Target to close a deal by 20th Sept where all agreements are signed and monies can be paid to PetroSaudi before end of Sept.

2) Arrange for official signing and meeting of dignitaries by end Sept

The key thing is the list of assets currently in PetroSaudi, their valuation and descriptions in order for us to proceed and drill down to the numbers.

Thanks

It is notable that none of these emails on the Proposed Timeline for the Joint Venture are copied to anyone from 1MDB.

“Storyline for 1MDB”

Indeed later emails show that it was not until September 15th that the CEO of 1MDB, Shahrol Halmi, and his Malaysian colleagues were involved in the proceedings and again it was on the initiative of Jho Low, who organised a conference call between the parties.

Email exchanges show how the PetroSaudi Directors collaborated with Low, Li Lin Seet and Tiffany Heah on how they would present the company to the team from 1MDB. They drew up what they called a Storyline for their Conference Call and Seet opened up with a number of suggestions:

From: SEET Li Lin <seet.lilin@gmail.com >
Date: Tue, 15 Sep 2009 17:26:00 +0200
To: Jho Low <jho.low@gmail.com >; Tiffany Heah <tiffany.heah@gmail.com >; Patrick Mahony <Patrick.Mahony@Petrosaudi.com >
Subject: Storyline for Conference call with 1MDB

Hi Patrick,

I will circulate you some information on 1MDB soon….

Storyline for Conference Call: Patrick and Shahrol
1) ????? Introduction on background
a. ?????? Emphasize on ties with Tarek and role of Tarek in KSA
b. ????? Emphasize on Prince Turki?s role in PSI
c. ?????? Hint that PSI is owned indirectly by King Abdullah.

2) ????? Events that has occurred
a. ?????? King Abdullah learnt about 1MDB from PM Najib Razak and spoke to PM about joint-investments between KSA and Malaysia through a JV.
b. ????? Prince Turki was tasked by King Abdullah to follow up on this matter and has met PM Najib Razak to re-iterate this desire. Leaders or both countries are committed to partnership between PSI and 1MDB.
c. ?????? In fact, both leaders will very much like a deal completed by end of September in order for it to be the centerpiece of their meeting on 30 ^th Sept 2009.

Patrick responded to Jho Low’s assistant advising more caution:

“Ok. Need to be careful about some of the things we say – especially things concerning the big man in KSA. Let’s please discuss before the call. Thanks”

Meanwhile both parties agreed there was no “need to mention about the assets or any oil & gas matter in this call” as such details would be handled later.

STORYLINE EMAIL TRAIL

From: Patrick Mahony
To: Patrick Mahony
Subject: Fw: Storyline for Conference call with 1MDB

Ok. Need to be careful about some of the things we say – especially things concerning the big man in KSA. Let’s please discuss before the call. Thanks

_____

From: SEET Li Lin <seet.lilin@gmail.com>
Date: Tue, 15 Sep 2009 17:33:41 +0200
To: Jho Low<jho.low@gmail.com>; Tiffany Heah<tiffany.heah@gmail.com>; Patrick Mahony<Patrick.Mahony@Petrosaudi.com>
Subject: Re: Storyline for Conference call with 1MDB

Patrick,

?

Jho will like to emphasize that we do not need to mention about the assets or any oil & gas matter in this call since information will be sent to 1MDB this Friday.

?

Thanks

_____

From: SEET Li Lin <seet.lilin@gmail.com >
Date: Tue, 15 Sep 2009 17:26:00 +0200
To: Jho Low <jho.low@gmail.com >; Tiffany Heah <tiffany.heah@gmail.com >; Patrick Mahony <Patrick.Mahony@Petrosaudi.com >
Subject: Storyline for Conference call with 1MDB

Hi Patrick,

I will circulate you some information on 1MDB soon. Also, please take note that Prince Turki needs to be in Malaysia on 30th Sept 2009 for signing. Kindly book his calendar.

Thanks

?

Storyline for Conference Call: Patrick and Shahrol

1) ????? Introduction on background

a. ?????? Emphasize on ties with Tarek and role of Tarek in KSA

b. ????? Emphasize on Prince Turki?s role in PSI

c. ?????? Hint that PSI is owned indirectly by King Abdullah.

2) ????? Events that has occurred

a. ?????? King Abdullah learnt about 1MDB from PM Najib Razak and spoke to PM about joint-investments between KSA and Malaysia through a JV.

b. ????? Prince Turki was tasked by King Abdullah to follow up on this matter and has met PM Najib Razak to re-iterate this desire. Leaders or both countries are committed to partnership between PSI and 1MDB.

c. ?????? In fact, both leaders will very much like a deal completed by end of September in order for it to be the centerpiece of their meeting on 30 ^th Sept 2009.

3) ????? Investment objectives of JV

a. ?????? Leverage on key strengths of both countries to invest in areas which may spur sustainable economic development in Malaysia.

4) ????? Timing and milestones

a. ?????? Given the pressing timeline, 1MDB might need to travel to Geneva next week to finalize deals

b. ????? Deal must be completed by 30 ^th September (signed and asset/cash injection completed)

5) ????? Other details

a. ?????? 5 board members, 3 from PSI, 2 from 1MDB. Usual reserve matters to protect 1MDB as minority.

b. ????? PSI will provide timeline and other drafts by this Friday, including structure etc.

c. ?????? New hires will be jointly agreed.

???????????????

?

?

After this conference call apparently took place it was again Jho Low who proceeded to initiate more formal written introductions between the 1MDB team and their future joint venture partners, through an email entitled “re-Introductions for PSI and 1MDB” – at this stage the two companies were only 10 days away from signing their initial billion dollar deal on 29th September.

YAB PM Najib Razak – friend of Jho Low

During this initial email introduction of September 18th, Jho Low again insinuated that he was representing the highest authorities, in this case the “YAB PM” directly, in the matter.

The twenty-something tycoon again focused on playing up PetroSaudi’s owner Prince Turki’s royal connection, impressing on the 1MDB Chief Executive an entirely untrue assertion, which was that the negotiations were officially connected to “furthering Saudi-Malaysia bi-lateral ties”.

This is not the only time that the correspondence shows Jho Low assuming a quasi governmental and diplomatic status in his dealings between Malaysia and the Middle East. Did the Foreign Ministry know anything about it and if not, whom was Jho Low representing?

“I am pleased to confirm as per YAB Prime Minister’s discussions with HM King Abdullah Al-Saud on furthering Saudi-Malaysia bi-lateral ties, together with YAB PM’s discussions with HRH Prince Turki Al-Saud, PetroSaudi and 1MDB is on track with respect to your USd2.5b JVC partnership. YAB PM has confirmed that he looks forward to the signing ceremony on 28 September 2009 to be attended by HRH Prince Turki Al-Saud.”  said Jho Low to 1MDB’s Shahrol Halmi 18th September.

[INTRODUCTIONS EMAIL]

            Bcc me and seet

Sent via BlackBerry from T-Mobile

_____

From : Patrick Mahony
Date : Mon, 21 Sep 2009 15:00:53 +0200
To : Robert Ho <robert.ho@tia.com.my >; Shahrol Halmi <shahrol.halmi@tia.com.my >; ‘jho.low@gmail.com’ <jho.low@gmail.com >; TarekObaid <Tarek.Obaid@Petrosaudi.com >
Subject : RE: Introductions for PSI and 1MDB

Great. Many thanks

From: Robert Ho [mailto:robert.ho@tia.com.my]
Sent: Monday, 21 September, 2009 2:57 PM
To: Patrick Mahony; Shahrol Halmi; ‘jho.low@gmail.com'; Tarek Obaid
Cc: ‘caseykctang@gmail.com’
Subject: Re: Introductions for PSI and 1MDB

Thanks, Patrick. It will be low key as the event will be closed door. No media presence but we will issue short press release. Am out now. Will send you the draft later.
Regards,

Robert

_____

From : Patrick Mahony <Patrick.Mahony@Petrosaudi.com >
To : Shahrol Halmi; Low, Jho (Personal) <jho.low@gmail.com >; Tarek Obaid <Tarek.Obaid@Petrosaudi.com >
Cc : ‘Casey Tang’ <caseykctang@gmail.com >; Robert Ho
Sent : Mon Sep 21 08:49:39 2009
Subject : RE: Introductions for PSI and 1MDB

Dear Shahrol,

Tarek has asked me to answer on his behalf as he is not able to get to a computer at the moment. First of all regarding the overview of PetroSaudi, I attach a brief presentation. This is a bit dated and only includes the upstream oil and gas ambition of PSI (it also does not have any asset specific data) but should give you a sense of what we are about. Obviously PSI will aim to invest in other areas as it works with you going forward.

With regard to liaising with Robert on what we can release to the media, I will be the point person. I would suggest you send to me a draft of what you would like to release and we will let you know if it works for us. PSI is very press shy and usually never announces our investments (one of the main reasons governments like to work with us) but we understand you will need to make some statements and we would be happy to make them jointly with you.

I look forward to meeting you in London and hearing from Robert.

All the best,

Patrick

Patrick Mahony

PetroSaudi International Ltd.

Tel: +41-78-86-888-68

patrick.mahony@petrosaudi.com

From: Shahrol Halmi [mailto:shahrol.halmi@tia.com.my]
Sent: Sunday, 20 September, 2009 10:40 AM
To: Low, Jho (Personal); Tarek Obaid
Cc: ‘Casey Tang'; Patrick Mahony; Robert Ho
Subject: RE: Introductions for PSI and 1MDB
Importance: High

Thanks Jho

Dear Tarek, pleased to make your acquaintance. Looking forward to meeting face to face next week.

I understand that you’ve couriered over a copy of PSI’s company profile late last week. Unfortunately it being a long weekend over here in Malaysia, we haven’t received anything yet.

In the spirit of moving as expeditiously as possible, would it be possible for Robert, our Corporate Communications person to liaise directly with his PSI equivalent to get going on joint statements, and to agree on levels of detail we are comfortable with releasing to the media?

Sincerely,

Shahrol

 

From: Low, Jho (Personal) [mailto:jho.low@gmail.com]
Sent: Friday, 18 September, 2009 8:31
To: ‘Shahrol Halmi'; Tarek.Obaid@petrosaudi.com
Cc: ‘Casey Tang'; ‘Patrick Mahony’
Subject: Introductions for PSI and 1MDB
Importance: High

Hi Tarek, Shahrol,

I am putting the both of you together as per the mutual interests of PetroSaudi and 1Malaysia Development Berhad (1MDB)

I am pleased to confirm as per YAB Prime Minister’s discussions with HM King Abdullah Al-Saud on furthering Saudi-Malaysia bi-lateral ties, together with YAB PM’s discussions with HRH Prince Turki Al-Saud, PetroSaudi and 1MDB is on track with respect to your USd2.5b JVC partnership.

YAB PM has confirmed that he looks forward to the signing ceremony on 28 September 2009 to be attended by HRH Prince Turki Al-Saud.

Would appreciate if you could keep the working group to a PNC – 4 member list serve as I understand due to the urgency of the matter, NDAs have not been signed, and PSI in participate is quite sensitive about information flow in respect of HRH.

My suggestion is have Patrick and Casey work the details reporting back to Tarek and Shahrol for decision making, etc.
Thank you.

(I trust all of you can now officially communicate and don’t need to cc me for proper governance purposes)

 

Shahrol Halmi – out of the loop

Jho Low had also reassured his 1MDB correspondents, therefore, that they were “on track with respect to your USD$2.5 billion Joint Venture partnership”, despite having been advised from the start that PetroSaudi would be bringing zero cash to the deal, only its supposed assets.

The extent to which Shahrol Halmi was still playing catch up is revealed later in the same email trail, when the 1MDB chief admitted two days later on 20th September that he had yet to receive or read anything about the company he was due to start billion dollar joint venture negotiations with the following week in London:

From: Shahrol Halmi [mailto:shahrol.halmi@tia.com.my]
Sent: Sunday, 20 September, 2009 10:40 AM
To: Low, Jho (Personal); Tarek Obaid
Cc: ‘Casey Tang'; Patrick Mahony; Robert Ho
Subject: RE: Introductions for PSI and 1MDB
Importance: High

Dear Tarek, pleased to make your acquaintance. Looking forward to meeting face to face next week.   I understand that you’ve couriered over a copy of PSI’s company profile late last week. Unfortunately it being a long weekend over here in Malaysia, we haven’t received anything yet. [1MDB CEO Shahrol Halmi, 20th Sept]

In response Patrick Mahony sent him on Tarek’s behalf:

“a brief presentation. This is a bit dated and only includes the upstream oil and gas ambition of PSI (it also does not have any asset specific data) but should give you a sense of what we are about.” Mahoney also warned Halmi that PSI is “very press shy” .. .(one of the main reasons governments like to work with us)” and he therefore required to be sent advance drafts of any planned publicity.

[POWER POINT PRESENTATION ATTACHED]

Three days later on Wednesday 23rd September a team from 1MDB, including Halmi, was already over in London, supposedly negotiating the terms of the deal.

Yet again, the correspondence shows the whole set up was organised and arranged by Jho Low, with his assistant Li Lin Seet contacting PetroSaudi beforehand to strategise the meeting at the offices of oil company’s own lawyers, White & Case.

Jho Low would of course attend as a go-between, as the emails made clear:

From: Seet Li Lin [mailto:seet.lilin@gmail.com]
Sent: Monday, 21 September, 2009 2:06 PM
To: Patrick Mahony

Subject: Meeting in LDN

Hi Patrick,

Jho is tied up in meetings and could not do the call. He requests that you bcc himself and me in any correspondence to 1MDB. Also, the meeting on Wednesday is expected from 11am to 5pm. Can you get White and Case to book 2 meeting rooms. 1 for 1MDB and PSI. 1 for Jho and PSI.

In the same email exchange Seet explains to PetroSaudi’s Patrick Mahony that, as far as 1MDB was concerned, matters were a done deal:

“Jho has softened the ground so the 1MDB ppl are expected to come and meet, chat to know each other and sign.”  Seet wrote to Mahony a couple of days beforehand.

SEPARATE MEETING ROOMS EMAIL

Ok. Thanks. Yes – W&C

—–Original Message—–

From: Seet Li Lin <seet.lilin@gmail.com>

Date: Mon, 21 Sep 2009 15:54:21

To: Patrick Mahony<Patrick.Mahony@Petrosaudi.com>

Subject: Re: Meeting in LDN

Hi, give us a couple more hours for JVA.

 Meeting in LDN on Wed will be at White and Case?

 ——Original Message——

From: Patrick Mahony

To: Li Lin Seet (gmail)

Subject: RE: Meeting in LDN

Sent: Sep 21, 2009 14:34

 Thanks. ETA for first draft of agreement is still in a few hours…?

 —–Original Message—–

From: Seet Li Lin [mailto:seet.lilin@gmail.com]

Sent: Monday, 21 September, 2009 3:33 PM

To: Patrick Mahony

Subject: Re: Meeting in LDN

 Understand. Will do just that. Will prep B and M lawyers.

 ——Original Message——

From: Patrick Mahony

To: Li Lin Seet (gmail)

Subject: RE: Meeting in LDN

Sent: Sep 21, 2009 13:26

Ok. I’ve just been bbm’ing with jho and i think we need their counsel to stay longer in case. I also need to get the 1mdb lawyer and my lawyer in touch asap. I will wait until you send the jva but what i suggest is that when you send me the jva, you introduce me to your lawyers by email and then i will forward the jva to my lawyers and introduce my lawyers to your lawyers. Thanks

—–Original Message—–

From: Seet Li Lin [mailto:seet.lilin@gmail.com]

Sent: Monday, 21 September, 2009 2:06 PM

To: Patrick Mahony

Subject: Meeting in LDN

Hi Patrick,

Jho is tied up in meetings and could not do the call.

He requests that you bcc himself and me in any correspondence to 1MDB.

Also, the meeting on Wednesday is expected from 11am to 5pm. Can you get White and Case to book 2 meeting rooms. 1 for 1MDB and PSI. 1 for Jho and PSI.

Jho has softened the ground so the 1MDB ppl are expected to come and meet, chat to know each other and sign. Their legal counsel will be here as well.

Thanks

Jho Low crafted the whole Joint Venture deal before either PetroSaudi or 1MDB saw what was the plan

These same emails provide the equally telling information that the first draft copy of the Joint Venture deal to be negotiated with 1MDB was drawn up by Jho Low’s own office.

On the 21st September, two days before negotiations were due to start on the billion dollar deal, that draft was still being eagerly anticipated by Low’s contacts at PetroSaudi.

Mahony Sep 21, 2009 14:34: “ETA for first draft of agreement is still in a few hours…?

Seet Li Lin 21 Sep 2009 15:54:21: “Hi, give us a couple more hours for JVA”

PetroSaudi’s Patrick Mahony then suggests to Seet that his lawyers and Jho Low’s lawyers should first liaise with each other, before they contacted 1MDB’s lawyers, about the content of the proposed Joint Venture document being drawn up by Jho Low’s team in New York:

From: Patrick Mahony,
To: Li Lin Seet (gmail),
Subject: RE: Meeting in LDN Sent: Sep 21, 2009 13:26

“I also need to get the 1mdb lawyer and my lawyer in touch asap. I will wait until you send the jva but what i suggest is that when you send me the jva, you introduce me to your lawyers by email and then i will forward the jva to my lawyers and introduce my lawyers to your lawyers. Thanks”,

The inescapable conclusion is that the jet-lagged team, arriving from Malaysia the next day, had acted as little more than on-lookers in the drawing up of this ‘joint venture’, for which only they would be putting up any cash, on behalf of the Malaysian public.

According to the contract about to be place on the table in front of them USD$1 billion was due on day one, with a further drawing rights available of up to USD$5 billion.

Final moves – how Jho Low orchestrated a “loan repayment” due to PetroSaudi into a “premium” destined for his own Good Star account

Last week Sarawak Report triggered outrage when it revealed the details of the original Joint Venture Agreement, signed by 1MDB and PetroSaudi on 29th September 2009, which till then had been kept secret.

Key player – Jho Low’s side kick Li Lin Seet, signatory of Good Star

The reason for the anger was discovery of a massive USD$700 million “loan repayment” obligation placed on 1MDB, supposedly due to ‘pay back a loan’ owed to PetroSaudi’s parent company on the signing of the deal.

It had been agreed this money would be paid out of the billion dollars contributed by 1MDB, writing off 2/3 of its investment.

However, telling emails written by Patrick Mahony at the very same time to the Swiss private bank BSI, show that while the money was being described as a loan repayment under the terms of the joint venture, he preferred to describe this whopping sum as a “premium” (bonus) to the prospective recipient bank:

From: Patrick.Mahony@Petrosaudi.com
To: chr.zuc.a1@bsibank.com
Subject: Additional information please

“….The 700m is premium that was made in the transaction and will be used to fund future transactions in any sector (not necessarily oil and gas)

EMAIL: ‘LOAN’ OR ‘PREMIUM’?

From: chr.zuc.a1@bsibank.com
To: Patrick.Mahony@Petrosaudi.com
Subject: Additional information please

Dear Patrick, 

 Please let us come back on our questions, my compliance needs some additional information before sending her presentation to our General Management. 

_________________________________________________________________ 

1. Business Plan

Outflows
USD 100         JP Morgan London
USD 200         remains at 1MDB Petro Saudi Ltd (BVI)
USD 700         will go to various accounts to be opened at BSI (says Tarik Obaid) – to explain

PM: The 100 (at JPM) and 200 (at BSI) will be used to fund the assets costs – basically exploration and production costs – and also to purchase assets. The 700m is premium that was made in the transaction and will be used to fund future transactions in any sector (not necessarily oil and gas) 

We please need additional details on the remaining 700 m : beneficiaries, location, depositary bank ?

 It seems that the Malaysian Sovereign Fund invests only in Malaysia. Is this money going back to Malaysia f.ex. and if so, when ? 

_________________________________________________________________

2. Joint  Venture Contract :  

PM: The JV company is the BVI company called 1MDB PetroSaudi Ltd and this is a JV between PetroSaudi International (Holding) Cayman Ltd and  1 Malaysia Development Berhad (Malaysia) . 

Our Compliance please needs the draft agreement between the contracting partners. 

It is difficult for her to give an opinion to our General Management  on the deal without the joint venture draft.

_________________________________________________________________

3.  “1 Petro Saudi International Holdings Cayman Ltd (Cayman) ”

What is the purpose of this account and how will it be used please ?

__________________________ _________________________________________________________________

Thank you

Christophe Zuchuat 

Directeur Adjoint 

BSI SA
8, Boulevard du Théâtre – 1204 Genève
Tel. +41 58 809 13 52 – Fax +41 22 809 43 03
chr.zuc.a1@bsibank.com  – www.bsibank.com 
________________________________________ 

From: Patrick Mahony  [mailto:Patrick.Mahony@Petrosaudi.com]
Sent: mercredi, 23.  septembre 2009 23:21
To: Zuchuat Christophe  (BSI-Geneve)
Subject: RE: Feedback compliance positive / GM  also
Sensitivity: Confidential

Please  see answers below. Let’s discuss tomorrow. Merci

From:  chr.zuc.a1@bsibank.com [mailto:chr.zuc.a1@bsibank.com]
Sent:  Wednesday, 23 September, 2009 5:33 PM
To: Patrick  Mahony
Subject: Feedback compliance positive / GM  also
Sensitivity: Confidential

Dear  Patrick,

Thank you for your  valuable information and help.
Our compliance is  currently consolidating all information,
and will submit it  to our General Management who is already informed.
Overall, the  outlook is quite positive.

Allow me 3  questions please :
____________________

Business  Plan

Outflows
USD 100          JP Morgan London
USD 200          remains at 1MDB Petro Saudi Ltd  (BVI)
USD 700          will go to various accounts to be  opened at BSI (says Tarik Obaid) – to explain

Can you explain us  briefly where and how the money will be invested ?
We suppose the  business plan is financing oil investments/projects.
1. My  compliance has to give some sort of explanation on the 700  especially .
We are very happy  it stays at BSI.

  PM:  The 100 (at JPM) and 200 (at BSI) will be used to fund the assets costs –  basically exploration and production costs – and also to purchase assets. The  700m is premium that was made in the transaction and will be used to fund  future transactions in any sector (not necessarily oil and  gas) 

_______________________

2.  Joint Contract : it is not clear   between  which entities the  contract will be :

Joint Venture  Contract between : linked to cash flow ?
•       1Malaysia  Development Bhd (Malaysia)
•       1MDB Petro Saudi  Ltd (BVI)

Joint Venture  Contract between : linked to ownership ?
•       1 Petro  Saudi International Holdings Cayman Ltd (Cayman)
•       1MDB Petro Saudi  Ltd (BVI)

PM:  I don’t follow question, let’s discuss tomorrow. The JV company is the BVI  company called 1MDB PetroSaudi Ltd and this is a JV between PetroSaudi  International (Holding) Cayman Ltd and 1 Malaysia Development Berhad  (Malaysia).   

__________________________

PricewaterhouseCoopers
3.  Valorization of  Argentinean and Turkmenistan’s Assets :   very  important to get please

PM:  This will happen but may be another competent authority as PWC is being too  slow.

__________________________

Thank you for your  important support
Best  regards

Christophe  Zuchuat
Directeur  Adjoint

BSI  SA
8,  Boulevard du Théâtre – 1204 Genève
Tel.   +41 58 809 13 52 – Fax +41 22 809 43 03
chr.zuc.a1@bsibank.com – www.bsibank.com 

This explanation given by Mahony to BSI clearly contrasts with the reason provided in the joint venture agreement for the removal of the money, which said that PetroSaudi’s parent company had injected the loan into the subsidiary it had created to take part in the deal – but then (naturally) expected the money back once the joint venture was signed.

Jho Low’s lawyer, Tiffany Heah

Our research has shown that this careful repayment provision had been written in to the very first draft of the agreement, provided by Jho Low’s own legal team in New York, which was sent over to PetroSaudi by lawyer Tiffany Heah.

From: Tiffany Heah
To: Patrick Mahony
Date: Mon, 21 Sep 2009 12:36:37 -0400
Subject: JVA
Attachment(s): 1

DRAFT ORIGINAL JOINT VENTURE DOCUMENT FROM JHO LOW’S LAWYERS

It can be seen through a series of drafts over the course of the following week that the PetroSaudi legal team from White & Case in London, headed by the lawyer Tim Buckland, then re-wrote, added to and refined the clause, arguably strengthening its provisions, while making the wording more subtle.

FINAL JV DOCUMENT

That entire process was completed in just one week, between the presentation of Jho Low’s original version of the contract at the key first London meeting on 23rd September and the signing of the joint venture on 29th.

And during that fevered period, this expensive team of London lawyers kindly provided a couple of power point presentations, in order to break down the whole procedure for the less gifted brains involved:

JOINT VENTURE STRUCTURE STEPS PLAN POWER POINT

One of the most interesting aspects of the above White & Case power point presentation, designed for the negotiations for 1MDB 23rd September, is how closely it resembles the presentation sent over to PetroSaudi by Jho Low’s underling Li Lin Seet a week earlier on September 14th:

From: SEET Li Lin
To: Patrick Mahony, Tarek.Obaid@petrosaudi.com
CC: Jho Low, Tiffany Heah
Date: Mon, 14 Sep 2009 02:17:52 -0400
Subject: Re: Proposed conference call: 330pm (US Eastern time)
Attachment(s): 1

Dear Tarek and Patrick,

We will be using the following set of presentation for our discussion.

Do let me know if the proposed timing is good for you all.

JOINT VENTURE STRUCTURE INTERNAL PRESENTATION POWER POINT

Shortly after the signing of the deal Buckland resigned his position at White and Case and took up his present job – as a Director of PetroSaudi.

“Seen no evidence” that Jho Low has ever been involved – CEO Arul Kanda Kandasamy

Likewise, Patrick Mahony, who had been employed as an investment banker by the hedge fund Ashmore during the period of his engagement in the PetroSaudi negotiations, also resigned his position straight after, in favour of a Directorship at PetroSaudi’s plush, brand new offices in Curzon Street, in the heart of London’s Mayfair

Yet, despite all the evidence, 1MDB’s brand new CEO, Arul Kanda Kandasamy, was still maintaining last week in statements to journalists that he has been able to find no evidence whatsoever of any involvement by Jho Low in the affairs of 1MDB.

Bank transfers

What that evidence goes on to show is that the critical manoeuvres for transferring the USD$700 million “loan” cum “premium” into the control of Jho Low took place straight after the signing of the agreement on the 29th September – that and Jho Low was involved and copied in on every step.

Jho Low – on the case with 1MDB

We have copies of a ‘PetroSaudi Loan Agreement’, which had been drawn up by White & Case indicating that this vast sum of money had been loaned from the parent company PetroSaudi Cayman Holdings to 1MDB PetroSaudi on 25th September.

The letter was signed by PetroSaudi’s boss, the twenty something Tarek Obaid.

However, there is no evidence to suggest that this ‘loan’ was anything apart from an entirely contrived transaction between two arms of PetroSaudi, a company with very little working capital.

Three days later 1MDB was committed to pay it back in hard currency.

PETROSAUDI LOAN AGREEMENT 25th Sept 09

In order to complete the heist of $700 million from 1MDB into the Jho Low controlled account that was waiting for it, the CEO of 1MDB Shahrol Halmi needed to concede to a ‘repayment’ request under the joint venture agreement crafted by Jho Low.

The documentation for this completion of the deal was again clearly collaborated between Jho Low and Patrick Mahony’s team of lawyers from White & Case.

Mahony sent Jho Low an email on 30th September entitled Funding/ Completion Instructions and Documentation, which contained 7 crucial documents, including a so-called letter of demand for the $700 million ‘loan’ as well as last minute instructions on bank account changes:

EMAIL FUNDING / COMPLETION INSTRUCTIONS AND DOCUMENTATION

1MDB_TKC_director_acceptance_letter.pdf
1MDB_SABIH_director_acceptance_letter.pdf
1MDB_PetroSaudi_Limited_Written_Resolutions.pdf
Loan_Repayment_Demand_2.pdf
Form_A.pdf
Signatories_letter.pdf
PetroSaudi_Letter_of_Agreement.pdf

From: Patrick Mahony
To: jho.low@gmail.com
Date: Wed, 30 Sep 2009 00:18:09 +0200
Subject: FW: Funding/ Completion Instructions and Documentation

The letter of demand, signed by PetroSaudi CEO Tarek Obaid, to 1MDB required the immediate “repayment of the “loan” of $700 million from the 1MDB PetroSaudi joint venture company to what he describes as “the bank account of our affiliate PetroSaudi International Limited”.

PetroSaudi CEO had cited a Good Star account for “Final Crediting”

However, Sarawak Report has been able to establish from the extensive documentation that the above account at RBS Coutts in Zurich did not in fact belong to PetroSaudi, or to an affiliate.

Rather it was registered in the name of a company called Good Star Limited, which is a company controlled by Jho Low.

Mahony and Tarek Obaid received payments from Good Star – their account details for Good Star match the 1MDB payment

This means that the money, which was stated as having been paid back to PetroSaudi as part of the joint venture agreement, was in fact signed over by Tarek Obaid to an entirely separate third party, Good Star Limited.

Signatory for Good Star is Li Lin Seet

Jho Low has publicly stated, time and again, that he has had nothing whatsoever to do with the investment activities of 1MDB and that he has received no money or benefits from the development fund.

However, Sarawak Report has established from the documentation that the signatory and Chief Investment Officer for Good Star was none other than Jho Low’s deputy Li Lin Seet.

Seet had acted as the tycoon’s key right hand man throughout the management of the deal between 9th-29th September 2009 and was copied in on all the correspondence we have received relating to the deal.

Chief Investment Officer and signatory of Good Star

The Singapore number listed above, was included in a contract signed on 29th September between Good Star and Patrick Mahony, straight after the joint venture agreement with 1MDB.

We have established that it still belongs to Seet Li Lin, who is now the Vice-President of Jho Low’s company Jynwel Capital.

Seet returned our call made to this number last week, confirming his identity and his role at Jynwel.  But, when we asked about Good Star and his role as its Chief Investment Officer he said:

“What? I don’t know what you are talking about” and then turned off his phone.

Shahrol Halmi knew all along – RBS Coutts, the Queen of England’s own bank

Yet another email trail in this fascinating set of documents involves last minute frantic interchanges between the banks involved in transferring this huge sum of money to Good Star.

These make clear that the head of 1MDB knew that this company was the destination for the $700 million, not an affiliate of PetroSaudi.

Because, when 1MDB’s own bank, Deutsche Bank Malaysia, came back asking for confirmation on behalf of RBS Coutts Zurich as to the identity of “the beneficiary with regard to the 1MDB remittance” Halmi replied to his banking officer Jacqueline Ho:

“From : Shahrol Halmi
Date : Fri, 2 Oct 2009 08:21:15 -0400
To : ‘jacqueline.ho@db.com’ <jacqueline.ho@db.com >; Casey Tang <casey.tang@tia.com.my >
Subject : Re: RESEND : URGENT REQUEST OF RBS COUTTS

Jac, please use this address for GOOD STAR LIMITED.

P.O.Box 1239, Offshore Incorporation Centre, Victoria, Mahe, Republic of Seychelles

Thanks

The PetroSaudi team and Jho Low were copied into this email exchange and Jho Low commented to Patrick Mahony:

“Shld be cleared soon. Pls update tarek.”

Surely, the head of 1MDB must have been aware that Good Star was an account that had nothing to do with PetroSaudi’s official company structure, since there was no record of it in the PetroSaudi International group of companies?

EMAILS URGENT REQUEST OF RBS COUTTS

    Sent via BlackBerry from T-Mobile

_____

From : jho.low@gmail.com
Date : Fri, 2 Oct 2009 12:28:01 +0000
To : <patrick.mahony@petrosaudi.com >
Subject : Fw: RESEND : URGENT REQUEST OF RBS COUTTS

Shld be cleared soon. Pls update tarek.

Sent via BlackBerry from T-Mobile

_____

From : Shahrol Halmi
Date : Fri, 2 Oct 2009 08:21:15 -0400
To : ‘jacqueline.ho@db.com’ <jacqueline.ho@db.com >; Casey Tang <casey.tang@tia.com.my >
Subject : Re: RESEND : URGENT REQUEST OF RBS COUTTS

Jac, please use this address for GOOD STAR LIMITED.

P.O.Box 1239, Offshore Incorporation Centre, Victoria, Mahe, Republic of Seychelles

Thanks

_____

From : Jacqueline Ho <jacqueline.ho@db.com >
To : Casey Tang; Shahrol Halmi
Sent : Fri Oct 02 06:19:20 2009
Subject : RESEND : URGENT REQUEST OF RBS COUTTS
Dear Casey and Shahrol

Please see an email request from RBS Coutts to reveal the beneficiary name pertaining to 1MDB’s remittance.

In that sense, I believe RBS needs confirmation on the beneficiary’s name in order to complete their internal risk mitigating processes as no name was

We will await your instructions on whether to reveal the beneficiary name and address (please provide) to RBS Coutts.
As requested by them, we will have to send it out via email and an authenticated swift message so would appreciate a reply as soon as possible.

Best Rgds
Jacqueline Ho
Corporate Coverage
Deutsche Bank (M) Bhd
Tel: + 603 20317798
Mob: +6012 2059561
Email: jacqueline.ho@db.com

—

This e-mail may contain confidential and/or privileged information. If you
are not the intended recipient (or have received this e-mail in error)
please notify the sender immediately and destroy this e-mail. Any
unauthorized copying, disclosure or distribution of the material in this
e-mail is strictly forbidden. —– Forwarded by Jacqueline Ho/db/dbcom on 10/02/2009 05:41 PM —–

Prakash Gopi/db/dbcom 

10/02/2009 04:55 PM

To Jacqueline Ho/db/dbcom@DBAPAC

cc Jeremy Lewis/db/dbcom@DBAPAC

Subject Fw: REQUEST OF COUTCHZZ

Jac,

RBS Coutts is requesting for bene’s full details.
Can we proceed to provide the necessary information. If so, appreciate if you could provide me with the relevant details.

Warm Regards,

Prakash Gopi
Global Market Operations
Deutsche Bank (M) Bhd
03-20536851

—– Forwarded by Prakash Gopi/db/dbcom on 02/10/2009 04:53 PM —–

Laurent.Schmid@rbscoutts.com 

02/10/2009 04:38 PM

To Prakash Gopi/db/dbcom@DBAPAC

cc Eliane.Humair@rbscoutts.com, Thomas.Tuerler@rbscoutts.com

Subject RE: REQUEST OF COUTCHZZ

Dear Prakash,
Please urgently confirm the full name of the final beneficiary of the funds per e-mail and authenticated swift (see details below) in order for us to apply the funds.
We are not in a position to credit the funds without full beneficiary details (full name, address, account no.).

Kind regards,

Mr Laurent Schmid
Regulatory Risk 

RBS Coutts Bank Ltd
Lerchenstrasse 18
P.O. Box
8022 Zurich, Switzerland
Tel. +41 43 245 53 52
Fax +41 43 245 54 04
laurent.schmid@rbscoutts.com
www.rbscoutts.com 

____

From: Humair, Eliane (RBS Coutts, CH)
Sent: Freitag, 2. Oktober 2009 10:27
To: Cousin, Dominik (RBS Coutts, CH); Tuerler, Thomas (RBS Coutts, CH); Schmid, Laurent (RBS Coutts, CH)
Subject: FW: REQUEST OF COUTCHZZ

TO URGENT

Eliane Humair
Investigations Department

RBS Coutts Bank Ltd
Stauffacherstrasse 1
P.O. Box
8022 Zürich
Telephone +41 (0)43 245 58 62
Facsimile +41 (0)43 245 57 99
eliane.humair@rbscoutts.com
www.rbscoutts.com

_____

From: Prakash Gopi [ mailto:prakash.gopi@db.com]
Sent: Freitag, 2. Oktober 2009 10:22
To: Humair, Eliane (RBS Coutts, CH)
Cc: Jeremy Lewis; Krystof Balwierz
Subject: Fw: REQUEST OF COUTCHZZ

Dear Eliane,

I have received this msg from Krystof Balwierz on behalf of yourself today.

May i urgently enquire what further details you require from DEUTMYKL since our MT103 msg had indicated that the funds were to be credited to acc 11116073.

Thank you.

Warm Regards,

Prakash Gopi
Global Market Operations
Deutsche Bank (M) Bhd
03-20536851

—– Forwarded by Prakash Gopi/db/dbcom on 02/10/2009 04:13 PM —–

Chooi-Fong Liew/db/dbcom 

02/10/2009 04:09 PM

To Krystof Balwierz/db/dbcom@DBCOM cc

Prakash Gopi/db/dbcom@DBAPAC Subject

Fw: REQUEST OF COUTCHZZ

Hi Krystof

I have forwarded the email to my colleague who is handling this. You can laise directly with him direclty.

Regards.
Chooi fong

—– Forwarded by Chooi-Fong Liew/db/dbcom on 10/02/2009 04:06 PM —–

Chooi-Fong Liew/db/dbcom 

10/02/2009 04:01 PM

To Prakash Gopi/db/dbcom@DBAPAC cc

Subject

Fw: REQUEST OF COUTCHZZ

Pls help.

—– Forwarded by Chooi-Fong Liew/db/dbcom on 10/02/2009 04:01 PM —–

Chooi-Fong Liew/db/dbcom 

10/02/2009 03:59 PM

To Connie Lam/db/dbcom@DBAPAC, Umadevi Maslamani/db/dbcom@DBAPAC cc

Subject Fw: REQUEST OF COUTCHZZ

HI

Pls note email below . Did you send the pymt instruction? Bene Bank unable to apply. Pls provide addl details via BKTRUS33.

Thanks.
Chooi fong

Thanks to Halmi’s positive intervention, the $700 million transfer appears to have been finally banked later that day.

Jho Lo’s side-kick Li Lin Seet provided a series of comments on Facebook during this period of dealmaking. On September 30th, the day the money was transferred from 1MDB he gushed:

The deal is clinched

Ten days later, with the money securely transferred, he and his friends were clearly living it up in Vegas:

Raining Cristal – the world’s most expensive champagne – was this all thanks to Malaysia’s diverted development money?

Jho Low’s inner team were not the only ones with reason to celebrate.

On the same day that Tarek Obaid sent his letter of demand to 1MDB, on 29th September, Good Star also issued two contracts, signed by Jho’s underling Li Lin Seet.

One contract was to Tarek Obaid himself, paying him a “broker fee of USD$85 million”‘

DOCUMENT GOOD STAR TAREK

The other contract was from Good Star to Patrick Mahony, hiring him as an Investment Manager for a fund also of $85 million, but with a planned leverage of up to $500 million.

This contract entitled Mahony to a baseline 2% management fee, per annum.

DOCUMENT GOOD STAR MAHONY

Jho Low himself has meanwhile embarked on a career as one of the world’s richest and most flamboyant youthful tycoons.

Research by Sarawak Report indicates that in 2012 he has purchased the most expensive ever mansion in Hollywood Hills at 1423 Oriole Drive, for just under $39million, dwarfing the $17.5m he spent on buying a house for his pal, the PM’s step son Riza Aziz.

$39 million dollar mansion

He is also believed to be the proud owner of one of the world’s largest ocean-going yachts, which is currently bound from Tahiti towards the Far East:

Jho Low is believed to have taken delivery of Equanimity , the world’s 34th biggest yacht in July 2014

Low’s Cristal Champagne splashing antics have subsequently, of course, become legendary in the gambling and nightclub hotspots in the world. This phenomenon was notably recorded by the world’s gossip columns from late October in 2009, when he first starting catching the attention of the celebrity writers in the United States.

In recent years the youthful ‘billionaire tycoon’ has concentrated on building a name for himself as a philanthropist in the West, stating just last week to Forbes Magazine that “philanthropy is cool…and good for business and good for PR”.

New look – is Jho Low a Charity Man?

It seems reasonable, therefore, to ask whether Malaysia’s 1MDB development money has been channeled towards pleasure and debauchery, as well as good causes in the West, instead of helping the intended poor of the country from whence the money has come?

NEXT – SEE HOW THE 1MDB “LOAN REPAYMENT” LINKED WITH THE BUY OUT OF OF SARAWAK’S UBG BANK

Nik Faisal Ariff Kamil, featured as the Executive Director of Investments for UBG in the 2008 Annual Report

Documents available to Sarawak Report highlight the key role played by a well-known contact of the tycoon Jho Low, called Nik Faisal Ariff Kamil, during the company PetroSaudi International’s negotiations to raise a further billion dollars in loans out of 1MDB in the course of 2010.

This was the same period during which PetroSaudi was also negotiating to buy out the Taib controlled bank, UBG.

At the time Nik Faisal was 1MDB’s Chief Investment Officer.

But, astonishingly, he also held the post of Executive Director of Investments for UBG.

Jho Low, meanwhile, was a member of the Board of the bank, having headed a substantial share acquisition a few months earlier.

Correspondence shows that Nik Faisal was looped into extensive discussions with PetroSaudi over what was described as “Project Uganda”.

This project appeared to be focused around the loans to PetroSaudi and also the buy out of UBG – given that the correspondence on “Project Uganda” email network referred to both these topics only.

It raises questions over whether Nik Faisal was essentially UBG’s ‘man inside’ 1MDB at this crucial negotiating time – acting as an effective cat’s paw for Jho Low?

Chief Investment Manager at 1MDB during 2009 – previously he was at a “leading national investment institution”

Nick Faisal and his senior colleague Jasmine Ai Swan Loo both moved to 1MDB, yet they are still registered as part of UBG’s key executive team – did Nik come over on ‘secondment’ to 1MDB during 2009?

Jho Low’s UBG connection

In 2008 the Jho Low controlled company Majestic Masterpiece was issued a major share in the the Taib family owned bank, following a share swap deal, involving the purchase by UBG of shares in the highway construction company Putrajaya Perdana Berhad.

How Majestic Masterpiece acquired a huge chunk of UBG bank in a restricted share issue in July 2008

Low, who claimed he had a personal stake in the venture, then joined the board at UBG, which had been seeking a buy out for some time.

Nik Faisal was UBG’s Executive Director of Development at the time and is known to be close to Jho Low. He is now a Director of another highway construction company called Prolintas, which has received the contract to build the Damansara-Shah Alam Elevated Expressway.

Jasmine Loo Ai Swan, UBG’s Legal & Compliance Director

However, he also remains a Director of UBG, according to Bloomberg.

Likewise, another key UBG colleague Jasmine Loo Ai Swan, who was the bank’s Legal & Compliance Executive Director, also joined 1MDB as Executive Director Group Strategy, in March 2011.

However, she too appears to have retained her position at UBG bank and also as a Director of Putrajaya Perdana Berhad.

SRC Connection

Nik Faisal’s connections to Jho Low and the mysterious transactions linked to 1MDB have already attracted considerable comment, because of his role as the Director and Manager of another highly controversial government owned company called SRC Sdn Bhd.

SRC originally belonged to 1MDB and it took out a loan of RM4 billion from the Malaysian public’s Old Age Pension fund, Kumpulan Wang Persaraan.

Critics have repeatedly demanded to know the details of this transaction and what the money was for. However, information about the deal was removed from the 1MDB accounts through the transfer of the company to the direct ownership of the Finance Ministery in 2012.

Till this date the Ministry has failed to present SRC’s own illegally outdated accounts and the details have remained hidden.

UBG key executives were also key executives at 1MDB

Our evidence raises a clear conflict of interest therefore, in that Nik Faisal was working right inside 1MDB as its Chief Investments Officer throughout 2010, at the very time PetroSaudi was negotiating two further loans from the fund and was also engaged in buying out UBG bank.

Documents make clear that two further PetroSaudi loans totalling USD$1 billion (on top of the original $1 billion already invested through the joint venture in 2009) were drawn from 1MDB on 26th July and 8th September 2010.

Meanwhile PetroSaudi’s buy-out of UBG, which was announced in January, was completed in late September 2010.

Nik Faisal Ariff Kamil was continually consulted by PetroSaudi executives throughout this period, as the documents make clear, and he was the leading figure at the bank in the day to day negotiations over the raising of the loans.

He is referred to in emails as 1MDB’s Chief Investment Officer and enjoyed the email address: nik.kamil@1mdb.com.my:

From: Patrick Mahony
To: Nik Faisal Ariff Kamil
Date: Thu, 9 Sep 2010 13:47:42 +0200
Subject: RE: Signed Docs

Attachment(s): 2

Nik – please find attached revised docs. Many thanks

—–Original Message—–

From: Nik Faisal Ariff Kamil [mailto:nik.kamil@1mdb.com.my] Sent: 09 September 2010 00:02
To: Patrick Mahony
Subject: Re: Signed Docs

Thanks

Nik Faisal Ariff Kamil
Chief Investment Officer
1Malaysia Development Bhd
C +6016 2072855

—– Original Message —–

From: Patrick Mahony <Patrick.Mahony@Petrosaudi.com>
To: Nik Faisal Ariff Kamil
Sent: Thu Sep 09 02:52:21 2010
Subject: RE: Signed Docs

Nik,

As per my email below, attached please find all of the signed documents.

Best,

Patrick

—–Original Message—–

From: Patrick Mahony

Sent: 08 September 2010 06:19

To: Nik Faisal

Subject: Signed Docs

Dear Nik,

This is to confirm that all docs have been signed and have been couriered to you. We will also send you pdf versions later today. Please kindly execute wire transfer of usd500m in the accounts I mentioned for value today, 8 September.

Many thanks and best regards,

Patrick

The “attached” documents referred to by PetroSaudi’s Patrick Mahony in the above email exchange referred to the so-called ‘draw down’ notices, through which the company availed itself of lending from 1MDB under the terms agreed when the joint venture was turned into a murabaha loan agreement, June 14th 2010.

The September transaction was the second of two draw downs in 2010 – one on July 26th for USD$500 million and one on September 8th 2010, both for USD$500 million, according to the documents.

In the week before the earlier July transfer by 1MDB, PetroSaudi’s Patrick Mahony had messaged Jho Low:

“Sent drawdown notice to nik. It is on uganda”

The Documents:

Virtually identical documents were sent between the players involved in Project Uganda for both the separate ‘draw downs’ of $500 million by PetroSaudi from 1MDB.

From: Patrick Mahony
To: Nik Faisal Ariff Kamil
Date: Thu, 9 Sep 2010 13:47:42 +0200
Subject: RE: Signed Docs

Nik – please find attached revised docs. Many thanks

SEE ATTACHMENT

From:
1MDB PetroSaudi Limited
Kingston Chambers
PO Box 173
Road Town
Tortola

British Virgin Islands

To:
1Malaysia Development Berhad
Level 21, Suite 12.01
The Gardens South Tower
Mid Valley City Lingkaran Syed Putra
59200 Kuala Lumpur
Malaysia

8 September 2010

Letter of Agreement and Notice of Request for Additional Tranche

We refer to the murabaha financing agreement made between you and us and dated 14 June 2010 pursuant to which the Parties agreed, inter alia, that you would make available a murabaha facility to us upon the terms and conditions set out therein (the “Murabaha Financing Agreement”).

Unless otherwise stated in this letter of agreement (the “Letter”), all capitalised terms not defined in this Letter and all clause references shall be given the same meaning and interpreted in the same manner as in the Murabaha Financing Agreement. In addition, the term “Effective Date” shall mean the date on which this Letter is agreed to and acknowledged by you by your countersignature of this Letter.

1. Pursuant to the terms of the Murabaha Financing Agreement, the Parties agreed that the Additional Tranche may be utilised by us for the purpose set out in Clause 2.1(b) (Additional Tranche) thereof, namely to finance the purchase of Commodities from the nominated Suppliers by way of one or more Transactions (the “Additional Tranche Purpose”). The Parties agreed that in respect of any Transaction, we would use all proceeds we receive from the sale to a buyer of any Commodities purchased under the Transaction as working capital for capital expenditure. The process for the purchase and subsequent sales of the Commodities are set out in Clauses 5 (Purchase by Seller), 6 (Sale to Purchaser) and 7 (Agency Appointment) of the Murabaha Financing Agreement (the “Commodities Process”).
2. Notwithstanding the provisions of the Murabaha Financing Agreement in respect of the Additional Tranche Purpose and the Commodities Process, we hereby request that the Additional Tranche is made available by you directly to us in one or more drawings without regard to the Commodities Process, such drawings to be utilised by us as working capital for capital expenditure and to be made in accordance with the drawing procedure set out in paragraph 5 of this Letter.
3. In order to implement the request referred to in paragraph 2 of this Letter, we hereby request your agreement to the following with effect from the Effective Date:

(a)        that any clauses relating to the purpose of the Additional Tranche or the Commodities Process be disapplied and instead the purpose of the Additional Tranche be construed in accordance with paragraph 2 of this Letter;

(b)       that the definition of “Transaction” be construed as a drawing under the Additional Tranche in accordance with the drawing procedure set out in paragraph 5 of this Letter and the definition of “Settlement Date” be construed as the date upon which the relevant Transaction is drawn down by us;

(c)        that the Deferred Price applicable to a Transaction (as such term is construed in accordance with paragraph 3(b) of this Letter) and payable on a Deferred Price Payment Date be the amount of such Transaction;

(d)       that the Profit applicable to a Transaction (as such term is construed in accordance with paragraph 3(b) of this Letter) be calculated by applying to the outstanding Transaction the profit return rate referred to in the definition of “Murabaha Profit” in the Murabaha Financing Agreement (based on the outstanding amount of such Transaction); and

(e)        that any defaults and breaches of any Finance Document that are solely triggered by the matters contemplated in paragraph 2 of this Letter be waived in all respects for all time.

4. In addition, we refer to the provisions of Clause 2.7 (Availability of Additional Tranche) of the Murabaha Financing Agreement and pursuant thereto we wish to request for the full amount of the Additional Tranche to be made available to us. For the purposes of the Murabaha Financing Agreement, this Letter shall be designated as an Additional Tranche Request. By countersigning this Letter below, you agree to the making available of the full amount of the Additional Tranche and this Letter shall be an Additional Tranche Confirmation Notice for the purposes of Clause 2.7 (Availability of Additional Tranche) of the Murabaha Financing Agreement.
5. Upon your countersignature of this Letter, the full amount of the Additional Tranche shall be made available to us in one or more Transactions (as such term is construed in accordance with paragraph 3(b) of this Letter) and the provisions of Clauses 3.1 and 3.2 of the Murabaha Financing Agreement shall apply to such Transactions save that:

• references to “Purchase Order with Unenforceable Promise to Purchase” shall be construed as being references to an irrevocable notice of drawing, and for such purpose we attach at Annex A hereto a completed notice of drawing for an amount of US$500,000,000;
• the aggregate amount of the Transaction together with any previous Transactions does not exceed the Additional Tranche Amount; and
• Clauses 3.2(c) and 3.2(d) shall be disapplied.

6. Following the Effective Date, the Murabaha Financing Agreement shall remain in full force and effect and the provisions thereof shall not be amended or waived in any way whatsoever other than as stated herein, and in particular, Clauses 2.6 (Payments) and 8 (Prepayments, Reduction, Cancellation and Reconversion) shall remain in full force and effect, except as amended hereby. In addition, the Parties agree that as of the occurrence of the Effective Date, the departure from the Additional Tranche Purpose and the Commodities Process will not form the basis of any claim by any Party including as to the validity and/or enforceability of the Murabaha Financing Agreement.
7. This Letter shall be designated a Finance Document for the purposes of the definition of “Finance Documents” in Clause 1.1 of the Murabaha Financing Agreement.
8. By countersigning this Letter below, you hereby warrant to us that you have received all corporate, regulatory and other approvals and consents required for the purposes of entering into the transactions contemplated by this Letter and the Murabaha Financing Agreement, as amended by this Letter.
9. Clauses 15 (Notices) and 25 (Counterparts) of the Murabaha Financing Agreement shall apply mutatis mutandis as if set out in full in this Letter. Notwithstanding the provisions of Clause 18.2 (Amendment costs) of the Murabaha Financing Agreement, the provisions of Clause 18.1 (Transaction Expenses) thereof shall apply to this Letter.
10. This Letter, including any non-contractual obligations arising out of or in connection with this Letter, is governed by the laws of England.

Please acknowledge your receipt of this Letter, and confirm your agreement to the above by signing and returning the enclosed counterpart of this Letter.

Yours faithfully

This Letter has been executed and delivered as a deed on the date which appears on the first page of this Letter.

Executed as a deed by 1MDB PETROSAUDI LIMITED acting by its authorised signatory who, in accordance with the laws of the British Virgin Islands, is acting under the authority of 1MDB PetroSaudi Limited

………………………………………………………….Tarek ObaidDirector

 

We, 1MALAYSIA DEVELOPMENT BERHAD, acknowledge receipt of this Letter and we hereby confirm our agreement to, and undertake to be bound by, the terms and conditions set out in this Letter.

NOTICE OF DRAWING

 

ANNEX A:

ANNEX A

NOTICE OF DRAWING

To:   1MALAYSIA DEVELOPMENT BERHAD

From: 1MDB PETROSAUDI LIMITED

Date:     23 July 2010

Murabaha Financing Agreement dated 14 June 2010 between 1MDB Petrosaudi Limited and 1Malaysia Development Berhad, as amended from time to time (the “MFA”)

1. We hereby give notice in accordance with Clause 3.1 of the MFA that we wish to make a drawing under the Additional Tranche, such drawing to be made as follows:

(a)        Amount:                      US$ 500,000,000

(b)       Drawdown Date:        26 July 2010.

2. Upon the full amount of the Additional Tranche becoming available to us pursuant to the provisions of Clause 2.7 of the MFA, this notice is irrevocable.
3. The Amount should be credited on the Drawdown Date as follows:

(a)       Amount:                                  US$ 340,000,000

Pay to:                                    Chase Manhattan Bank New York

ABA:                                      021000021

Swift:                                      CHASUS33

Account:                                 001-1-008182

In favor of:                              J.P. Morgan (Suisse) SA

Swift:                                      MGTCCHGG

For further credit:                   7619400

(b)       Amount:                                  US$ 160,000,000

Pay to:                                    Chase Manhattan Bank New York

ABA:                                      021000021

Swift:                                      CHASUS33

For Account of:                      RBS Coutts Bank Ltd, Zurich

Swift:                                      COUTCHZZ

In Favor of Account:              11116073.2000

IBAN:                                     CH7308620111160732000

4. Terms defined in this notice have the same meaning as in the MFA.

In each case the documents (see Annex A from the earlier July agreement) show that the staff at 1MDB divided the payments into separate accounts.

Annex A – during the September negotiations two options were offered to 1MDB to divide either 300/200 or 320/160 – since the $40 million could be ‘re-balanced’ later

With regard to the payment of both tranches it can be seen that of USD$500 million $340 million was sent to PetroSaudi’s own working account at JP Morgan in Geneva and $160 million was sent to the RBS Coutts account belonging to the company Good Star in Zurich, which was controlled by Jho Low.

The documents relating to the Murabaha agreement were sent by PetroSaudi’s Patrick Mahony to the email addresses at “Project Uganda” in May 2010.

These included a copy of the agreement; a copy of PetroSaudi’s “Letter of Guarantee” to pay back the marabaha loan and a copy of a “Letter of Agreement”, whereby the PetroSaudi owned company 1MDB PetroSaudi agreed, as part of the deal, to buy out 1MDB’s shares in the original Joint Venture.

These documents show that PetroSaudi were nominally paying USD$1.2 billion for the 1MDB shares, providing a nominal profit to 1MDB of $200 million.

However, this was translated into a loan to PetroSaudi and the agreement provided for a further USD$1,5 billion of potential borrowing “with a maximum aggregate amount of United States Dollars two billion and seven hundred million (USD 2,700,000,000)”:

Patrick Mahony
To: Project Uganda
Date: Tue, 4 May 2010 15:08:58 +0200
Subject: FW: 1MDB Docs

Attachment(s): 3

DOCUMENTS – Murabaha Loan Agreement
– PetroSaudi “letter of guarantee”
– “letter of agreement” between PetroSaudi and 1MDB

The inevitable concern is why did this Government run fund, chaired by the Prime Minister, allow such a clear conflict of interest amongst its most senior members of staff who were negotiating these vast loans to a company with an extremely limited asset base?

Effectively, these executives at 1MDB were negotiating to lend public money to PetroSaudi at the very same time that PetroSaudi was negotiating to buy out their own bank UBG.

1MDB and PetroSaudi have consistently and continually denied that any money from 1MDB went into the UBG bank buy out, from which it has been speculated that Jho Low himself made a very handsome profit of several million ringgit.

To the contrary, the Malaysian media were encouraged to disseminate that PetroSaudi was a “cash rich” company “owned by the Saudi Royal family” and close to the Saudi Government, which was “ultimately investing in Malaysia”, all thanks to the growing close ties of the Saudi Royal Family with Prime Minister Najib Razak’

Spinning the press in Malaysia about “cash rich” PetroSaudi

But, if this was the case, then what relevance did the details of the 1MDB loan agreements with PetroSaudi have to the UBG buy out and why were they sent to the team at Project Uganda?

However, Sarawak Report has now demonstrated that little of this media spin of the time was true.  PetroSaudi was a company with a limited cash base, which was borrowing from Malaysia to the tune of billions of dollars, rather than investing in the country.

Project Uganda press release on UBG buy out deal

This media campaign and image building around PetrSaudi appears to have been deliberately orchestrated by the team at Project Uganda, based at 1MDB and PetroSaudi.

Significantly, in one example, the Project Uganda team were clearly collaborating over a press release about initial announcement by UBG bank of the buy out offer by PetroSaudi in January 2010.

From: Project Uganda
To: Patrick Mahony, Tarek Obaid
Date: Mon, 11 Jan 2010 08:41:24 +0800
Subject: RE: PetroSaudi Invests RM1.4 billion in Malaysia to show confidence in Government

Attachment(s): 1

MONDAY, 11 JANUARY 2010

PRESS RELEASE

PETROSAUDI INTERNATIONAL LIMITED MAKES RM1.4 BILLION FOREIGN DIRECT INVESTMENT ON ITS OWN TO REAFFIRM ITS CONFIDENCE AND COMMITMENT TO THE ECONOMIC PROSPECTS OF MALAYSIA

1. BACKGROUND

• On 29 December 2009, Majestic Masterpiece Sdn Bhd (“MMSB”), Concordance Holdings Sdn Bhd (“CHSB”) and PPES Works (Sarawak) Sdn Bhd (“PPES”) received letters of offer from PetroSaudi International Ltd. (“PSI”) to acquire all of UBG Berhad (“UBG”) shares held by the 3 parties for a cash consideration of RM2.50 per share.
• MMSB is a wholly-owned subsidiary of Abu Dhabi-Kuwait-Malaysia Investment Corporation (“ADKMIC”), whose shareholders include prominent Middle-Eastern investors, had in 2008 became the major shareholder of UBG with a 52.62% interest or 263,307,474 shares in UBG.
• CHSB, a wholly-owned subsidiary of Cahya Mata Sarawak, holds 141,558,155 shares in UBG, representing a 28.29% interest.
• PPES, a 51% subsidiary of Cahya Mata Sarawak, holds 44,652,000 shares of UBG, representing an 8.92% interest.
• On 8 January 2010, MMSB and CMS (based on their announcement) accepted the offers from PSI to dispose of their respective entire equity interests in UBG, subject to, inter-alia the approval of their respective shareholders. PetroSaudi International Limited (“PetroSaudi”) is an investment holding company with its head office in the Kingdom of Saudi Arabia.
• PetroSaudi main focus is in energy, construction and other strategic projects in various regions around the world, leveraging on its indepth knowledge of complex global systems that define the various industries. PetroSaudi distinguishes itself by forging strong relationships in every country in which it performs business. An example is in 2009, PetroSaudi formed a USD2.5bn joint-venture with 1MDB of Malaysia to focus on projects that encourage sustainable economic development within and outside of Malaysia to promote FDI into Malaysia.
• Upon completion of the acquisitions by PSI from MMSB, CHSB or PPES that result in PSI holding more than 33% of UBG shares, the obligation will be triggered by PSI to undertake a mandatory take-over for all the remaining ordinary shares in UBG not already held by PSI.
• Once an MGO is triggered at UBG level, PSI will automatically trigger an obligation to undertake a mandatory take-over for all the remaining ordinary shares in Putrajaya Perdana Berhad (“PPB”) and Loh & Loh Corporation (“LLCB”) not presently held by UBG.
• The “downstream” take-over offers of PPB and LLCB arose as a result of the change of control at UBG where UBG is the controlling shareholder of both PPB and LLCB.
• PSI has indicated its intention to privatise and delist UBG, PPB and LLCB from Bursa Malaysia Securities Berhad and expect the take-over and delisting exercise to complete in the first quarter of 2010.
• The entire exercise, assuming full acceptances by shareholders of UBG, PPB and LLCB will cost PSI approximately RM1.4b.

MMSB, CHSB and PPES has on 8 January 2010 accepted PSI’s offer to acquire the entire equity interests in UBG from the respective companies, subject to, inter-alia the approval of the shareholders of the respective companies.

PSI intends to privatise and delist UBG, PPB and LLCB from Bursa Malaysia Securities Berhad and expect the take-over and delisting exercise to complete in the first quarter of 2010.

2. RATIONALE

• Following PSI’s first foray into the region by the formation of a USD2.5 billion JV with 1MDB, this is the second and separate initiative by PSI on its own to reaffirm its confidence and commitment to the economic prospects of Malaysia.
• PSI has tracked the transformative phases of UBG as a player in the financial services sector, to that of construction and water infrastructure and more recently in the energy sector with keen interest.
• PSI believes that the acquisition of UBG will give it an immediate and strong foothold in Malaysia covering all the right sectors where PSI can share synergies and knowledge with UBG, PPB and LLCB as a group.

3. GOING FORWARD

• If the privatisations of UBG, PPB and LLCB materialise, PSI intends to continue maintaining a high level of transparency and corporate governance in all 3 companies despite being out of public scrutiny.
• PSI intends to add value to the UBG group in the long term and assures the companies that transition will be a smooth one. There will be no major changes to the management structure and PSI expects that the companies will continue “business as usual”.
• With PSI’s expertise in the oil and gas sector, it hopes to bring on board more oil and gas technical competencies to assist UBG in extracting value from its current oil and gas investment in Thailand and identifying future investments in the sector.
• PSI will reciprocally benefit from the construction and engineering expertise and skills of PPB and LLCB and could potentially open doors to these two companies in countries where PSI has presence, particularly in Saudi Arabia.
• There may also be potential synergy between the UBG group and the PetroSaudi’s group of portfolio companies.
• When the time is appropriate, PSI may invite other investors to share the upsides with the potential relisting of either UBG, PPB and/or LLCB.

These emails (of which there are many more) show that Mahony and his collaborators at “Project Uganda” were sharing information about the details of the 1MDB loans throughout 2010 and also about the buy out negotiations for UBG.

It indicates that the two deals were being linked by a team of the same people working on the same project under the code name Project Uganda.

Nik Faisal Ariff Kamil, 1MDB’s Chief Investment Office, over from his other job at UBG, was clearly one key member of the Project Uganda team in looped into these emails.

Another was clearly Jho Low.

Tony Pua – not the first time DAP has queried KPMG’s role

The release of documents by Sarawak Report relating to the joint venture between the development fund 1MDB (One Malaysia Development Berhad) and the firm PetroSaudi has created new insights into matters that have long been left woefully under-explained by the official accounts, say critics.

Among those who have protested at the lack of transparency over the fund is the opposition DAP spokesman Tony Pua.

He has now identified what appears to be a serious potential irregularity on the part of the original accountants, who audited the fund.

The matter arises out of Sarawak Report’s publication yesterday of a copy of the Muharaba loan document, which converted the original joint venture with PetroSaudi into a loan deal instead.

Related documents from PetroSaudi state that the agreement was signed on June 14th 2010.

Documents relate to the dating of the loan as June 14th 2010

All a matter of dates

The key detail that springs out of the discovery of these documents says Tony Pua, is this matter of the date. The previously unpublished materials make clear that the loan was completed on June 14^th 2010.

The significance of this simple detail is that it differs to what had been earlier officially recorded in the accounts, which had been signed off by KPMG in October of that year.

These claimed that the loan was signed on the last day of March 2010, which was  the day before the end of the accounting period.

Crucially, this had enabled the details of the earlier Joint Venture arrangement to be left out of the published accounts, on the basis that only the terms of the subsequent loan were deemed to be relevant for the purposes of the audit.

All about hiding the $700 million loan in the Joint Venture Agreement?

That Joint Venture agreement had controversially provided for the repayment of a $700 “loan” to PetroSaudi out of the money injected by 1MDB – a fact that was not known until Sarawak Report published the JVA document last month.

According to Tony Pua, if the joint venture agreement had not been in fact converted to the loan until the following June, then the details of the agreement, including the loan, ought legally to have been recorded in the public accounts.

Yesterday, Tony Pua told Sarawak Report that he found the development “shocking”.

“This information implies that the accountants engaged by 1MDB at the time were complicit in concealing information” he told Sarawak Report.

If so, this would be in violation of their legal and professional responsibilities.

The DAP spokesman is now asking for a response from the accountancy firm about its role in the affair, some years after it stepped down from its role at 1MDB. In a later statement he said:

“There is no question that KPMG would have had complete access to the JV Agreement and all the relevant material documents which were completed before 31^st March 2010 to arrive at its report. The apparent [attempt] to hide this information from the Financial statements and the failure to red flag the above transactions meant that the KPMG would have failed their duty to protect the interest of the Government and the Malaysian public at large”

1MDB has been notable in having a history of difficulties in keeping their accountants and in reporting the fund’s accounts on time and KPMG was later replaced by Ernst and Young.

After an 18 month wrangle over producing the 2013 accounts they too were replaced by the KL branch of Deloittes.

The Deloittes 2013 accounts for 1MDB were finally published a year late in March 2014. These accounts stated that the fund had finally disposed of all its investments in PetroSaudi 12^th September 2012, by selling their share for USD$2.318 billion to an “external party”.

1MDB’s loan interest was sold off to an anonymous buyer say the latest accounts. The payment of $2.318m was invested in an anonymous fund managed by an anonymous licensed investment manager.

1MDB has consistently failed to disclose who this external party was that was prepared to pay $USD2.318 billion to to take over a lending commitment to PetroSaudi  – a commitment that appears to have extended to as much as $2billion dollars according to the documents now available.

Moreover, instead of restoring this money to the hard pressed fund, which is currently laden with debts that it cannot service, the 1MDB 2013 accounts declared that 1MDB’s manager had instead invested it in a ‘Segregated Portfolio” registered in the Cayman Islands and managed by a ‘licensed investment manager”.

In response to questioning the management of 1MDB has steadfastly refused to identify who that investment manager might be.

However, investigations finally enabled them to be identified as the Hong Kong registered Bridge Partners, who were managing 1MDB’s funds through a company registered in the British Virgin Islands named Brazen Sky.

The setting up of Brazen Sky was noted in the 2013 Accounts

Commentators noted that Bridge Partners were a small company of investors, bordering on the low key in terms of their published information.

After their involvement in 1MDB was published the company allegedly removed all their details from their website.

Cabinet “clears” 1MDB after meeting latest accountants

The Development Fund was promoted at the PM/ FM’s brainchild

Yet, despite these glaring insufficiencies, those responsible for 1MDB have nevertheless continued to insist that all is well with the floundering fund and there has been no mismanagement.

1MDB is currently over RM40billion in debt with repayments due of RM3 billion by the end of this month.

The Prime Minister, who set up 1MDB and heads its Board of Advisors, has so far dismissed all criticism as “politically motivated” and his supporters are arguing that those critics have  misconstrued the facts.

On Wednesday, the Prime Minister finally responded to the headlines by bringing a team from the current accountants Deloittes to a meeting of the Cabinet, which had last week declined to sanction the raising of more public money to meet 1MDB’s RM3 billion debt repayment.

Following the accountants’ presentation the Prime Minister then released a public statement confirming that as a result of the briefing the whole Cabinet has officially “cleared” 1MDB of any wrongdoing:

“Having received clarifications from 1MDB and Deloittes Cabinet expressed confidence that no wrongdoing has been committed within 1MDB”

“Having received clarifications .. Cabinet expressed confidence that no wrongdoing had been committed by 1MDB”

So, the Prime Minister has come out fighting his critics.

However this announcement also included a major concession in that Najib has at last relented to calls to bring 1MDB to the attention of the Auditor General for a full report.

Just a few weeks ago the same Auditor General had stated that he saw no need to examine 1MDB’s accounts, because they had been signed off by respected international accountancy firms.

Despite 1MDB being “cleared” the PM has at last relented to calls to bring in the Auditor General

And Najib’s statement ended on a less confident note, in the light of what the Auditor General might find:

“If any wrongdoing is proven the law will be enforced without exception”

Commentators have noted this was is a strange declaration, given that the Cabinet had just expressed itself “fully satisfied” that there has been no mishandling of the fund on the part of 1MDB.

Crucially, there was no mention in the Prime Minister’s statement or elsewhere as to whether the cabinet has also reversed its earlier decision last week not to release the RM3 billion Najib desperately needs to bail out the funds latest round of debt repayments due by the end of March.

Tony Pua has called for a thorough review of the evidence provided by Sarawak Report.

Just connecting influential Arabs with 1MDB, like Prince Turki?

The lawyers for Jho Low, the London firm Schillings have now finally issued a statement on behalf of the tycoon, in response to questions from the news agency AFP.

The widely reported response acknowledges that Low was “consulted” on the PetroSaudi joint venture deal with Malaysia’s 1MDB development fund, “but has never been involved in criminal acts with respect to this transaction”.

This latest statement contrasts with earlier claims by Jho Low’s spokespeople Edlemen in New York, who announced last year on his behalf:

“Mr. Low has never held any position in 1MDB or in the Malaysian government. Mr. Low was appointed as one of the many advisors invited by the stakeholders of Terengganu Investment Authority (TIA) to provide advice from Jan 2009 to mid-May 2009 given his market-based knowledge. Mr. Low has not been involved in TIA since mid-May 2009.“[Statement by Low’s PR company Edleman in May]

The PetroSaudi joint venture deal took place between September 8th and September 29th of 2009.

Patrick Mahony – sought “letters of comfort”

And Sarawak Report has copies of detailed correspondence between Jho Low, 1MDB and the managers of PetroSaudi, relating to what appears to have been a further $1 billion paid out in loans by 1MDB to the oil company during the course of 2010.

That money appears itself to have been borrowed by 1MDB and ought therefore legally to have been declared to the Bank Negara Malaysia by 1MDB, according to expert advice given to Sarawak Report.

However, the correspondence shows that Jho Low, who took an authoritative role in the negotiations, was insisting to colleagues that the Central Bank should not be informed of the loan, because it would cause “unnecessary delays”.

Crucially, Low repeatedly informed PetroSaudi Director Patrick Mahony, who was anxious for confirmation that the Central Bank had indeed authorised the loan, that this was not needed because only:

” Mof approval is required for the loan which we have signed by pm who is also FM”

No need to tell Central bank, we have Ministry of Finance Approval and FM (also PM) has signed…

This claim appears to confirm that the Prime Minister was fully engaged in these negotiations and had personally signed the loan by 1MDB to PetroSaudi.

It also appears to confirm that Jho Low was acting as the interface between the Prime Minister/ Finance Minister on such matters with PetroSaudi.

Of even more concern is an apparent decision by Jho Low together with the “FM who is also PM” to leave the Bank Negara in the dark about the loan, despite the anxious and repeated requests by PetroSaudi’s own lawyers for a “letter of comfort” to confirm that the bank had given its approval, which they insisted was legally required.

As PetroSaudi boss Patrick Mahony put it to Low in the course of the correspondence:

“I know you know my guys are freaking out”

Yet, Low continued to insist that because the loan was “off-shore to off-shore” there was no need to declare the transaction to the bank and the legal advisors could be ignored.  As he put it “Bank Negara consent not required”:

JL: Bank negara consent not required
JL: As its foreign borrowings
JL: So we r sending offshore to offshore
JL: Or else we’ll have unncessary delays
Patrick: According to your lawyers it is
JL: Take it out pls
Patrick: We had it last time
Patrick: We need comfort we are getting this money in an approved manner
JL: Last time local borrowings
JL: This is foreign
JL: Just don’t want bnm [Bank Negara Malaysia] to delay it

Experts linked to Bank Negara have confirmed to Sarawak Report that this is not the case and that because a loan was involved, which 1MDB a public body was ultimately responsible for, the bank should have been informed.

Jho Low was wrong.

How half a billion dollar loan was fixed via BBM 

These revealing exchanges between Mahony and Jho Low took place through Blackberry messenger between Wednesday 21st July and Tuesday 27th July 2010, according to Mahony.

Kept in the loop, PetroSaudi’s Tarek Obaid – but how about 1MDB’s own chiefs?

He then sent the entire transcript by email to his fellow Director Tarek Obaid to put him in the picture about the situation.

It places the conversations in the days running up to a deal to loan to PetroSaudi of USD$500 million planned for 26th July 2010.

Mahony refers to “Monday” as the date decided, which was indeed the 26th and corresponds to papers acquired by Sarawak Report, which relate to a USD$500 million Murabaha loan agreement between 1MDB and PetroSaudi, dated on that day.

From: Patrick Mahony
To: Tarek Obaid
Date: Tue, 27 Jul 2010 14:11:33 +0200
Subject: Bbm transcript

This is my conversation with jho – it is between last wednesday and today…

Participants:

Patrick, JL

Messages:

———

Another key aspect of this significant exchange is the casual acknowledgement by Jho Low that responsibility and liability for the loan would lie with 1MDB:

JL: Just insert “any required regulatory approvals” so its
mdb’s [1MDB’s] liability n responsibility
JL: That covers all rather than specific bnm [Bank Negara Malaysia]

But, yet again 1MDB appears barely to be engaged in this negotiation.

Nik Faisal Ariff Kamil, UBG’s man in 1MDB

As with the previous joint venture loan agreement the preceding year, the executives of 1MDB seem to be virtual by-standers in the affair, with the UBG bank place-man, Nik Faisal receiving documents from PetroSaudi as agreed with Jho Low.

In the event, it appears that because of Mahony’s protests the original loan plan may have indeed eventually have been reported to the Bank Negara, an outcome which was described by Jho Low as “worst case”.

Low confirms that he had already got Ministry of Finance and 1MDB Board approval for the loan, but because Mahony had flagged up the issue over getting Bank Negara approval as well he might have to fly to KL to sit down with the lawyers and work things out, a worst case scenario.

It begs the question as to why the Minister of Finance and Board had signed without checking the matter with the Central Bank, since this was required?

The entire exchange once again destroys any suggestions that Jho Low was merely engaged in a distant consultative role when it came to the negotiations between PetroSaudi and 1MDB.

USD$160 went to Jho Low’s company

Jho Low’s interest in the loan deal was plain to see from the documents that eventually covered the distribution of the money.

As Sarawak Report has previously demonstrated $160 million out of the $500 million loan was sent to the RBS Coutts Zurich account of the company Good Star, which was controlled by the tycoon.

The remaining $340 million went to the PetroSaudi operating account held by JP Morgan in Geneva.

Whether there were two identical loans that went through on July 23rd and then September 8th, or whether the Central Bank was indeed informed, resulting in the “worst case scenario” envisaged by Low – a delay till September – is something that merits further research by the official Audit Office investigators, who are now being tasked with examining what happened at 1MDB.

Given the close links to the UBG bank buy out negotiations by many of the players in these 1MDB loan negotiations, it is worth pointing out that PetroSaudi’s offer for UBG was announced in January 2010, but that the buy out was not completed until September 29th.

Meanwhile, a USD$500 million transfer was made to PetroSaudi from 1MDB on September 8th. Then, on September 16th, Tarek Obaid, as Director of PetroSaudi International (Seychelles), had paid on USD$260 million into its subsidiary Jarvace Sdn Bhd, which bought UBG.

Capital transfer to Jarvace Sdn Bhd just days before

Yachts in the South of France

The revelations of Jho Low’s role in these dealings, while actively a Director on the UBG board, throws inevitable scrutiny onto his personal relationship with the Prime Minister/Finance Minister/ Chairman of the Board of Advisors of 1MDB.

Jho Low, far from acting as a mere advisor, was clearly heavily involved in the deal and in directing it with the avowed support of the Prime Minister.

Altogether, Rosmah, Taib, Raziah & Robert Geneid at Monaco Aug 2010,  after enjoying a stint on the PetroSaudi hired Tatoosh

His close relations with the PM and his family can not be in doubt over this entire period and this socialising also connected closely with the Taib family, the majority owners of UBG.

Two weeks beforehand Jho Low was living it up in St Tropez with Paris Hilton. Newspapers in New York had registered Jho Low when he first started splashing money in October 2009 straight after the PSI joint venture was signed.

In the August of 2010 the Prime Minister and his wife were the honoured guests in Monaco of Prince Albert, where Rosmah played sponsor to the first of a series of Islamic Fashion Shows, designed to raise money for the Prince’s Environment Foundation.

The Taibs, the Geneids, the Hii family and Rosmah and Najib joined Prince Albert’s entourage at the extravagant fashion event after having reportedly spent time on Jho Low’s hired yacht off the South of France.

The Tatoosh was rented just before the event by PetroSaudi to entertain Malaysian friend in the South of France

Jho Low hired the Tatoosh Yacht and pretended to his guests (Najib and Rosmah) that it belonged to PetroSaudi owner Prince Turki bin Abdullah

Jho Low hired the Tatoosh Yacht and pretended to his guests (Najib and Rosmah) that it belonged to PetroSaudi owner Prince Turki bin Abdullah

Rosmah presented a $100,000 cheque to Prince Albert’s foundation, which Sarawak Report has already reported was in fact funded by the Sarawak timber tycoons, the Hii family, who are cronies of the one of the world’s worst destroyers of the environment, Taib Mahmud.

Low is believed to have told his guests that the yacht (which rents out at around half a million dollars a week) belonged to the owner of PetroSauid, Prince Turki bin Abdullah, the son of the King of Saudi Arabia.

In late 2009 after the PetroSaudi Joint Venture Agreement there had clearly been another such gathering in the South of France, according to the correspondence.  Jho Low later contacted the PM’s office for photographs:

From: Low Jho
To: wanshihab@gmail.com, Tarek Al-Obaid
Date: Sun, 27 Dec 2009 03:29:32 +0000
Subject: Re: Pictures from South of France (PM Najib & HRH Prince Turki)

Thanks so much Wan!

——Original Message——

From: wanshihab@gmail.com
To: jho.low@gmail.com
To: Tarek Al-Obaid
ReplyTo: wanshihab@gmail.com
Subject: Re: Pictures from South of France (PM Najib & HRH Prince Turki)
Sent: Dec 26, 2009 11:25 PM

Dear Jho and Mr. Tarek Al Obeid,

It would be a pleasure to email you  the photos of HRH. Unfortunately I am away with the Prime Minister at the moment whereas the photos are back in Malaysia and is not immediately accessible. I will send it through as soon as I return. Hope that’s alright.

May I take this opportunity to extend to you the season’s greetings and wish you a Happy New Year.

Warmest regards,

Wan

——Original Message——

From: Low, Jho
To: wanshihab@gmail.com
Cc: Tarek Al-Obaid
ReplyTo: jho.low@gmail.com
Subject: Pictures from South of France (PM Najib & HRH Prince Turki)
Sent: Dec 27, 2009 9:08 AM

Dear Mr. Wan Shihab,

Would you pls kindly email the pictures you have of The Hon PM Mohd Najib Razak with HRH Prince Turki Al-Saud and Sheikh Tarek Obaid asap? They wld like it strictly for their private records. I have cced Tarek on this email so you can email him and cc me asap.

Thanks.

This may have been a private meeting, but it appears to have related to matters of public interest.

Khadem enjoying San Tropez

There are two very different sides to the prominent Abu Dhabi civil servant Khadem Al-Qubaisi, who chairs the emirate’s Aabar sovereign fund, according to an extensive body of information that has been passed to Sarawak Report.

For example, when he appeared in Kuala Lumpur on March 12th 2013, playing the key figure in a much vaunted multi-billion joint venture investment project with 1MDB, he cut a highly traditional figure.

Clad in flowing white Arab robes he presented a picture of strict Muslim sobriety.

However, as our photographs show,  there is another side to this senior executive.

In Las Vegas and the South of France he has become recently known as a super rich playboy, who owns a string of sports cars, three vast villas and one of the world’s largest yachts.

Khadem in his role as top fund manager

This Mr Qubaisi favours ‘daring’ t-shirts featuring lewd graphics or terrorist gunmen. He owns nightclubs and hangs out in strip joints (see below).

Sovereign wealth

Yet Al-Qubaisi is one of Abu Dhabi’s most senior fund managers.

He is the Chairman of Aabar, which is a major subsidiary of the Abu Dhabi sovereign wealth fund IPIC (International Petroleum Investment Company) of which he is also the Managing Director.

His immediate boss is Sheik Mansour a brother of the Crown Prince Sheikh Mohamed Zayed Al-Nahyan, who accompanied Al-Qubaisi on the 2013 visit to Putrajaya for the official signing ceremony of the so-called ‘joint venture investment’ between the United Arab Emirates and Malaysia.

Aabar Chairman Khadem Al-Qubaisi stretches out his hand to shake the deal (at his right side is Aabar’s CEO Mohamed Ahmed Badawy Al-Husseiny, who eventually claimed to have backed Wolf of Wall Street’s $100 million production costs)

Prime Minister Najib Razak made sure that the full day event was attended with the greatest possible fan-fare, as it was announced that the two countries would raise billions for investment in projects in Malaysia on a supposedly 50:50 basis, which would allegedly provide Malaysians with “hundreds of thousands of well-paying jobs”.

According to news reports on the official 1MDB press site, local media were told that the Arab country had committed no less than RM39 billion ringgit of investment for Malaysia, RM18 billion of which was for a joint venture with 1MDB:

 “The oil-rich United Arab Emirates (UAE) has committed RM39bil to two projects that will create hundreds of thousands of well-paying jobs for Malaysians.

The projects involve the setting up of a RM21bil strategic petroleum reserve in Tanjung Piai, Johor, and a RM18bil strategic partnership in the Tun Razak Exchange (TRX)….The second project, involving Abu Dhabi-based sovereign fund Aabar and 1Malaysia Development Bhd (1MDB), is to promote fresh economic initiatives to spur billions of ringgit in long-term sustainable investments in Malaysia.” [Star newspaper]

But, as it turns out, two year later no money has been raised by Abu Dhabi for this venture.

According to DAP’s opposition spokesman Tony Pua, USD3 billion was raised in borrowing by 1MDB in the name of these projects, but it was not matched by Aabar.  And of even that money, only half can be publicly accounted for:

“Just over half of that money is now missing. About RM5 billion of it went into an anonymous fund and is parked somewhere”, says Pua.

In fact, it is clear that far from investing in Malaysia, ‘joint venture partners’ such as Abu Dhabi’s Aabar have been sucking a fortune out 1MDB.

Khadem Al-Qubaisi having shed his sober image to party once again

Aabar’s strange investment strategies with 1MDB

For example, as Sarawak Report exclusively revealed two years ago, a USD$1.75 billion bond issue that was raised in March 2012 to fund 1MDB’s purchase of a power plant, Tanjong Energy, ended up being fantastically expensive, not least because it was jointly guaranteed by Aabar.

San Trop club scene lures Al-Khubaisi

In July 2013 Sarawak Report published details of that bond issue, which until then had been kept secret.

These reveal that the terms of the deal which 1MDB entered into with Aabar could hardly have been more invidious.

Given the costs involved the conditions are barely inexplicable, say experts like the Edge Magazine, which has examined the matter in detail.

To begin with the rate of interest was 5.99%, meaning the money could easily have been raised much more cheaply elsewhere.

Even more extraordinary was the 11% declared in fees by the commissioning bank Goldman Sachs International, when a more usual rate for such a deal would have been less than 1%.

And there was another very peculiar aspect to the loan, which lost 1MDB a huge amount of money, say critics.

Is this how Abu Dhabi’s top public investor is expected to behave off duty?

This was an option that was granted to Aabar to buy up 49% of the power plant in return for its guarantee of the loan.

Staggeringly, the terms of the deal also allowed Aabar to keep 45% of the proceeds (RM9.3 billion) of the Malaysian funded bond issue, in return for its role as ‘co-guarantor’.

In order to buy Aabar out of this prejudicial position 1MDB later had to pay at least USD$250 million, says Pua.

The Edge business magazine has itself calculated that the total cost of this barmy agreement might have actually exceeded USD$1 billion.

The magazine says that Aabar was also the guarantor of a second Genteng power plant purchase loan, which was framed along similar lines later in August 2012.

These deals were, needless to say presided over by the 1MDB Advisory Board and its Chairman, the Finance Minister and Prime Minister.

Time to investigate the links between Aabar and Jho Low?

Terrorism t-shirt – cool in the South of France?

It is against this background that Sarawak Report has now obtained documents, which show that the company Good Star Limited, Male, Seychelles, paid USD$20.75 million into the Edmund de Rothschild Private Bank (BPERE), Luxembourg account of a company owned by the Aabar Chairman, Khadem al-Qubaisi on 20th February 2013.

Sarawak Report revealed earlier this month that Good Star is a company controlled by the businessman Jho Low, who is closely linked to the Malaysian Prime Minister cum Finance Minister cum 1MDB Advisory Board Chairman, Najib Razak.

This Cayman Island company with an address in the Seychelles received a total of at least USD$940 million of the USD$2.2 billion that was supposedly invested in the “front company” PetroSaudi by 1MDB in 2009/2010.

Hovering or presiding? Jho Low accompanying PM’s wife Rosmah and the Crown Prince during March 12 2013 signing visit

The details of our expose have revealed Jho Low to be the man driver of the whole PetroSaudi deal in 2009/10.

We have also demonstrated how Jho Low claimed to be acting on behalf of the Prime Minister.

So was Jho Low still in the 1MDB driving seat during the later 1MDB power plant purchase deals in 2012 and the Aabar ‘joint venture agreement’ in March 2013 and if so why did his company pay Vasco Investment Services, a company which is beneficially owned by Khadem al-Qubaisi,  USD$20.75 million in February 2013?

Network of links between Jho Low and Aabar

As the Chairman of the private Hakkasan Group al-Qubaisi is now also a major nightclub owner

Sarawak Report has over the past months identified numerous links between Aabar Investments and the businessman Jho Low.

Coincidentally, many of these links also involve 1MDB.

Abu Dhabi first appeared on the scene in the context of Jho Low back in 2008, when a company fronted by Low, called Majestic Masterpiece, took a substantial interest in the Sarawak Taib family owned UBG bank.

UBG had just managed to persuade the Employee Provident Fund (controlled by the former State Secretary of Sarawak amongst others) to buy out its share of RHB Bank for over RM1.4 billion in 2007.  Therefore, it’s parent company CMS had money to invest.

The Edge has detailed how Jho Low offered to invest that money and then sell the bank on for a profit for Taib, having made a cool one hundred million up front from the Sarawak politician, by persuading him to buy up chunks of Iskandar, in which he had already taken a stake, before he had even paid the deposit.

Another Khadem T-shirt tells that he answers to no man

The owner of Majestic Masterpiece was an outfit named ADKMIC Abu Dhabi-Kuwait-Malaysia Investment Corporation, based in Abu Dhabi.

This is a shadowy corporation to have taken a commanding stake in one of Malaysia’s largest banks, because it has never declared its Directors and Shareholders.

However, under pressure, the twenty something at the time Jho Low blabbed to the Star newspaper that both he and the wife of the Sultan of Terengganu (whose petroleum fund was later the foundation of 1MDB) were on the board and that he was a 10% shareholder, alongside two named Kuwaiti and Emirate figures, Sheikh Sabah and Yousef Al Otaiba and  ‘a few others’.

According to the interview, it was not long after this, in 2008, that Jho Low claimed he was consulted by the Chairman of the Abu Dhabi Commercial Bank (ADCB) on whether to buy out some of EPF’s stake in RHB, which ADCB then did, taking a 25% share in the bank.

In fact, ADCB soon made moves to get rid of its shares in RHB, selling them on in June 2011 to none other than Aabar.

The Prime Minister cum Finance Minister Najib Razak was prominent at the signing ceremony for the transfer deal, as was Khadem al-Qubaisi, clad once more in flowing white attire.

Khadem (second right) signs Aabar’s purchase of RHB bank share with CEO Mhmd Ahmed Badawy Al-Husseiny at his side

Sarawak Report has seen strong evidence to support the conclusion that Jho Low had been closely involved in factoring this RHB deal, which involved the sale of a quarter share of a key Malaysian bank by one arm of Abu Dhabi’s sovereign wealth management apparatus, the Abu Dhabi Commercial Bank, to another – the IPIC subsidiary Aaabar, run by al-Qubaisi.

A further forward sale of this holding was almost immediately mooted and it is currently the subject of fierce manoeuvring by some of Malaysia’s own home banks, who are seeking to consolidate control of RHB and need the cooperation of Aabar.

London hotel buy-out

Joint bid for a top London hotel group including Claridge’s

Therefore, it is noteworthy that at the very same time as these negotiations were being pursued in April 2011, Jho Low, 1MDB and Aabar investments were also engaged closely together in an attempt to try and buy out London’s top hotel group, Maybourne

The entire process has been detailed in a UK court judgement already cited in a previous expose by Sarawak Report.

Contrary to Jho Low’s repeated claims that he has had no business dealings with 1MDB, the British judge confirmed that his company Wynton Capital’s bid for the billion pound hotel group had received a letter backing his position from 1MDB:

“I don’t play any role in 1MDB, and I did not get compensated by 1MDB or any other government-owned entities although some blogs have mentioned that I did. That is untrue.” [Jho Low speaking to the Star 2010]

The judge also detailed that Jho Low had tried to engage Abu Dhabi’s Aabar investments into the same deal in a three way bid with the UK’s Barclay brothers, who subsequently pulled out as they were not interested in Aabar:

“The Malaysian based investor was Jho Low, a businessman with some backing from a Malaysian sovereign wealth fund. Through an entity called The Wynton Group, offers were made to the company and shareholders in January and February 2011……The provision on 15th January 2011 of a letter from 1 Malaysian Berhad, an investment vehicle wholly owned by the Malaysian government, confirming its support for the offer, did not allay the concerns of the majority of the shareholders” [Justice David Richards, Judgement pars 50 & 138]

This was all at the same time in early 2011 that Aabar was involved in buying a share in RBH bank.

Over to America

Girls and guns look

Moving forward to 2013 it appears that Jho Low was still doing business with Aabar.

Because, surprisingly, the youthful tycoon’s company Jynwell Capital stepped into a supporting role (and into the limelight) during Aabar’s purchase of the Canadian oil company Coastal Energy, which has strong interests in the Far East.

Why Jynwell and Jho Low should have a role in this Aabar buy-out, when the sovereign wealth fund has unlimited resources to take over companies like Coastal is seemingly unclear.

However, Jho Low was publicised as a partner in the deal, through Jynwell’s subsidiary Strategic Resources (Global) Ltd.

Attractions advertised by the Khadem al-Qubaisi owned Las Vegas Hakkasan Nightclub

SRG in fact holds a notably similar name to the 1MDB subsidiary later taken over by the Ministry of Finance, named SRC.

SRC also became involved in a joint venture with Aabar in December 2011 named Aabar-SRC Strategic Resources Limited.

The activities of this company, which has involved borrowing from Malaysia’s public Pension Fund to the tune of RM4 billion, has been the subject of many unanswered questions, since the accounts were removed from those of 1MDB through its transfer to the Ministry of Finance.

Why did CEPSA need Jho Low in the deal?

The joint purchase of Coastal Energy meanwhile was shouldered by Aabar’s Spanish subsidiary CEPSA, which paid out USD$2.2 billion for the company.

Low in 2010 called his family wealth ‘modest’, now he plays up his grandad and father’s billionaire business credentials and calls himself a third generation capitalist.

The Chairman of CEPSA, which became a full subsidiary of IPIC in February 2011 is also, incidentally, Khadem al-Qubaisi.

More recently still, Aabar has been tied in with Jho Low’s October 2014 bid for the shoe firm Reebok, reported by Malaysian Government backed blogs as being funded by the Abu Dhabi fund.

According to the financial press such deals are part of a recent frenzy of complex takeovers where Jho Low has acted only as a minor investor, but as a key ‘facilitator’ for major funds in the Middle East – and that these maneouvres have turned his family into one of the richest in Malaysia.

Helping hand

Jho Low with Riza and his partner Joey McFarland from Red Granite with Wolf of Wall Street director Martin Scorcese

So, is it so much of a surprise that when things got rather tough on the publicity side for Jho Low and his very dear friend, Riza Aziz, who is the son of Najib Razak, the boys from Aabar appear to have stepped in to take some of the heat?

After months of refusing to identify the anonymous backers behind Riza’s USD$100 million Hollywood production Wolf of Wall Street, his company Red Granite Pictures finally announced last August that the money behind the movie had come from none other than Mohamed Ahmed Badawy Al-Husseiny, Khadem’s CEO and right hand man at Aabar Investments.

On hand – suited Mr Husseiny sits next to his boss (right), but did he pay for the party?

Yet questions clearly remain as to how Mr Al-Husseiny managed to mobilise so much personal disposable income into a risky film venture by the rookie producer, who holds such close ties to his day job?

Mr Al-Husseiny is doubtless exceedingly well paid, but his role is that of a salaried civil servant – as is that primarily of his Chairman Mr Khadem al-Qubaisi.

It leaves the assumption that there is a fuller story to be told about the actual nature of the Aabar connected investment into Red Granite Pictures growing stable of movies.

The wealthiest man in St Tropez?

Pink twin Bugatti owned in Cannes by al-Qubaisi – mark KAQ

Meanwhile, the success and wealth of the Aabar Chairman himself appears to have reached dramatically ostentatious levels, particularly since 2012, where it has been creating considerable comment in France’s ever fashionable Cote D’Azure – and indeed his other watering holes, such as Las Vegas.

Al-Qubaisi is certainly referred to as a businessman as well as a salaried government fund manager.

However most of his public activities have been related to his management of official public funds in keeping with his duties at the International Petroleum Investment Company.

So, it would be interesting to know what private activities have generated an income to sustain, for example, the part-purchase of the world’s 5th largest yacht The Topaz, price tag USD$400 million?

The Topaz – the mystery buyer in 2012 was believed to be Khadem’s boss Sheik Mansour, but he too has paid tens of millions towards it

Or his purchase for USD$50 million of one of New York’s most expensive apartments in the Walker Tower?

Walker Tower – New York’s top address

Or indeed his three grand villas on the Cote D’Azure?

The playboy version of Mr Qubaisi is also very keen on highly expensive cars and is knows to own a fleet worth millions of dollars.

Most eye-catching, according to car spotters in the South of France, has been his double Bugatti deal, twin mega-pricy Veyron Super Sports.

One is trimmed in pink and the other is blue, both emblazoned with special edition KAQ badges and with near identical Swiss number plates.

Running one of the world’s top sovereign wealth funds clearly has its perks and must present fabulous private business opportunities, which presumably are allowed under Abu Dhabi’s civil service rules.

And with such wealth to flaunt and a similar taste for nightlife, it is perhaps not surprising that Al-Qubaisi seems to have drifted into the same social set as Jho Low – after all there has been so much official business at Aabar that has touched on Jho Low’s private dealings.

Surely Jho Low was invited?

Pop stars Swizz Beatz and Alicia Keys are regular play pals of Jho Low – here they present him with an ‘Angel Gabrielle Award’ for his philanthropy (in the form of kindness to champagne thirsty star singers?)

It is perhaps of little surprise therefore, that the Hollywood hard party set around Jho Low, which includes Leonardo di Caprio, star of Riza Aziz’s movie Wolf of Wall Street, were to be found on the Topaz when they all came down to Brazil to watch the World Cup.

Jho Low’s key pal has developed Abu Dhabi connections

Jho Low now says he introduced Di Caprio to Riza and that this was the vital role he played that inspired a special note of thanks at the end of the movie.

And, since Di Caprio promotes himself as an environmental activist, it was perhaps equally predictable that Abu Dhabi has  highlighted his credentials, by recently flying him to the state in order to honour its own leadership’s environmental image.

The connection has extended further. When Aabar became the key funder for the Virgin Galatica project, Di Caprio was promoted as the star who would be leading the way on its space travel programme (presently in tatters after a Galactica disintegrated in space earlier this year).

Playing the super-hero

Indeed, Mr al-Qubaisi’s private businesses are perfectly in tune with the interests of this Hollywood crowd, who have also become intertwined with his official activities.

These include his chairmanship of Hakkasan, a restaurant business that was started in London in the early 2000s and has now expanded globally into nightclubs following a buy out by Khaddem.

However, Malaysians will be still be wanting to know  how it is that Good Star, the company controlled by Jho Low and which received nearly a billion dollars in funds channelled from 1MDB, paid out such a substantial sum to this gentleman?

This is particularly the case, given the extensive involvement of Mr al-Qubaisi’s public fund in matters to do with 1MDB and in various private ventures organised by Jho Low’s own private companies.