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In January this year, Malaysia’s current king, Sultan Abdullah Sultan Ahmad, accompanied by two elected officials – the Foreign Minister Hishamuddin Hussein and the Attorney General Idris Harun flew to Abu Dhabi on a deeply secret mission – to discuss with UAE Prince Mohamed bin Nayan the return of a vast treasure trove stolen from 1Malaysia Development Bhd before the Malaysian sovereign investment collapsed in a welter of scandal two years ago.
One of the side benefits of the trip, as Asia Sentinel reported on April 16, was that the king and members of his entourage were said to have been vaccinated as a favor with the Sinopharm vaccine in the UAE, one of the world’s leading countries in combating the virus along with other oil-rich Gulf states. Sultan Abdullah, the sources say, was given an additional 2,000 doses for his family and friends to take home to Malaysia.
As Asia Sentinel reported, with all of the Sultan’s family inoculated by the king’s personal physician and the vice chancellor of University Kebangsaan Malaysia (UKM), the excess vaccines were used for business partners and friends, generating enormous controversy in Malaysia once the news became public, with widespread accusations of favoritism.
But while they brought back vaccines – which raised a major ruckus in Malaysia and charges of favoritism for the privileged, what they didn’t bring back was any money. That has kicked off questions behind the scenes over how much is in Abu Dhabi and why an undercover mission involving the king was necessary, or why an official mission wasn’t sent, and why no announcement was made of the mission’s failure.
There are other questions over how much of the 1MDB loot has yet to be recovered. The US Justice Department, it appears, is much more interested in the recovery of the money than the Malaysian government. One of the continuing mysteries of the multibillion-dollar 1Malaysia Development Bhd. scandal is the relationship of the oil-steeped United Arab Emirates and Penang-born financial wunderkind Low Taek Jho, who is now on the run from the law in China as the architect of the massive theft.
The movement of the funds, which has been widely reported, is described in a 289-page filing in the US Central District Court of California on March 23 by Deborah Connor, chief of the US Justice Department’s Money Laundering and Asset Forfeiture Section, with 1MDB officials diverting funds from two bond offerings totaling US$1.367 billion to be transferred to a Swiss bank account belonging to a British Virgin Islands entity called Aabar Investments PJS Ltd. created to give the impression it was a subsidiary of the legitimate Abu Dhabi-incorporated Aabar Investments PJS, a subsidiary of the state-owned International Petroleum Investments Corp.
Funds diverted through the Aabar-BVI Swiss account were transferred to, among other places, a Singapore bank account controlled by an associate of Jho Low. In 2013, according to the filing, officials of 1MDB diverted more than $1.26 billion out of a total of $3 billion raised in bond offerings to be used by 1MDB to fund a joint venture with Aabar known as the Abu Dhabi Malaysia Investment Company, known as Admic.
However, a significant portion of the proceeds was instead diverted to a bank account in Singapore held by Tanore Finance Corporation and used for the personal benefit of Jho Low and his associates, including officials at 1MDB, according to the US Justice Department complaint.
1MDB borrowed US$1.225 billion from a syndicate of banks led by Deutsche Bank in Singapore to fund these payments to Aabar. In fact, however, 1MDB and Aabar officials diverted more than $850 million to Aabar-BVI and another similar entity incorporated in the Seychelles that like Aabar BVI, had nothing to do with the legitimate Aabar connected to IPIC.
The funds were used, among other things, to purchase the Equanimity, Low’s vast luxury yacht that was finally tracked down by US officials in Bali and returned to Malaysia, where it was sold and the money was returned to the Malaysian treasury.
“The proceeds of each of these four phases of criminal conduct were laundered through a complex series of transactions, including through bank accounts in Singapore, Switzerland, Luxembourg, and the United States,” according to the complaint.
It’s uncertain how much of the billion-plus is recoverable, and how much is actually in the hands of UAE officials. Former Attorney General Tommy Thomas wrote in his recently released autobiography My Story: Justice in the Wilderness that there was “complicity and involvement of very senior UAE officials in financial dealings with 1MDB, from which they received kickbacks in the millions of US dollars. These kickbacks were siphoned out of loans taken by 1MDB, or money raised by way of bond sales for various 1MDB acquisitions. As usual, the victim in these billion-dollar thefts was the Malaysian taxpayer, because it was Malaysia, and not the UAE, which was left to carry 1MDB’s liabilities.
As Thomas pointed out in his book, during his relatively brief tenure as attorney general, the Malaysian government set out aggressively to recover the 1MDB funds in UAE royal family hands, only to discover a series of tangled and intertwined relationships that made it difficult to get anywhere in the courts. The Emiratis, by contrast, he wrote, “were not put under any pressure to repay, and could well, under the terms of the settlement deeds, have escaped all liabilities. This situation was grossly unacceptable to the people of Malaysia. It was an obvious free pass for the Emiratis, in circumstances when they ought to have been held accountable for vast sums of money.”
The Emirati prince and Thomas “spent a few minutes at the PMO discussing the ways and means of discussing settlement,” Thomas wrote. “But I made it abundantly clear to him that Malaysia would not withdraw the London proceedings. Negotiations must take place along with the case. They must go in parallel. This was followed by a meeting in Kuala Lumpur. The Prime Minister had appointed Tun Daim Zainuddin to lead our negotiating team. Tun Daim and I, along with a few others from his office, met a delegation from the UAE. A second meeting was held in Abu Dhabi, again attended by Tun Daim and I. The meetings were not productive because the gulf between the UAE and Malaysia was huge and unbridgeable.”
When the reform Pakatan Harapan government fell in February 2020, it appears that those attempts to recover the money came to a stop. Rumors have swirled in Malaysia about the trip by the three and whether it was even an official one, or whether the three would attempt to recover the money for other purposes.
The Covid-19 epidemic has engendered general irritation over the lifestyles of the sultans. But even among the sultans themselves, there reportedly is growing unease in royal circles over the king’s conduct, particularly in declaring the emergency earlier this year that has kept Prime Minister Muhyiddin Yassin’s shaky Perikatan Nasional government in power. Reportedly some of his fellow sultans are considering asking him to go on leave. The next in line, however, is also the deeply popular Sultan of Johor.
Clare Rewcastle Brown, the gadfly editor of Sarawak Report, wrote earlier this week that questions have been raised over the involvement by the sultan’s relatives in a concession to mine manganese in a forest preserve in his home Pahang state that is environmentally sensitive, raising additional questions. The questions over the trip to Abu Dhabi and what the intentions of the three were on a secret mission to repatriate the funds add to those concerns.
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