SHOCK EXPOSE – HOW JHO LOW USED HIS CUNNING TO OUTSMART TOP BANKS TO SIPHON 1MDB MONEY TO HIS OWN GOOD STAR ACCOUNT

SINGAPORE – In Sept 2009, 1MDB entered into a joint venture with PetroSaudi International Limited.

Singapore’s investigations into Yeo Jiawei and 1MDB revealed Jho Low was closely involved in the setting up of the JV.

Under the agreement, 1MDB was to provide the JV with capital of US$1 billion in return for one billion shares in the JV vehicle, 1MDB PetroSaudi Limited, equivalent to a 40% equity interest in the joint venture.

According to the statement of facts by the Attorney-General’s Chambers, the transfer of US$1 billion by 1MDB to the joint venture was to be made via a foreign exchange transaction.

On Sept 30 2009, Deutsche Bank (Malaysia) Berhad was instructed by way of a letter which was signed by Tang Keng Chee, the then Executive Director of 1MDB, to execute the transaction.

However, the instruction was for Deutsche Bank Malaysia to transfer only US$300 million to the joint venture’s JPMorgan (Suisse) SA bank account.

The remaining US$700 million was to be transferred to a bank account belonging to Good Star Limited, this being RBS Coutts Bank AG (Zurich) bank account no 11116073.

On Sept 30 2009, in a telephone conversation with Deutsche Bank Malaysia, Tang confirmed that the US$700 million was to be transferred to PetroSaudi as repayment of an advance owed by 1MDB PetroSaudi.

Subsequently on Oct 2 2009, Sharol Halmi, the then CEO of 1MDB, represented to Deutsche Bank Malaysia that “Good Star is owned 100% by PetroSaudi International Limited”.

Investigations confirmed that the Good Star Account was opened sometime in June 2009, and Jho Low was recorded as its beneficial owner throughout from the date of account opening to its closure in September 2013.

In order to explain the inflow of US$700 million to Coutts compliance staff, Jho Low initially provided Coutts with an investment management agreement as evidence that Good Star was to invest the money on 1MDB’s behalf.

He later provided Coutts with a loan agreement, which characterised the money as a loan from 1MDB to Good Star.

“The agreements provided to Coutts are inconsistent with each other, and both are also inconsistent with the explanation for the transaction given by Tang Keng Chee to Deutsche Bank Malaysia on Sept 30 2009,” says the public prosecutor in the statement of facts.

Between May and October 2011, Good Star received a further US$330 million from 1MDB, spread over four transfers.

One of the transfers was effected by Deutsche Bank Malaysia, ostensibly under a Murabaha financing agreement dated June 14 2010 entered into between 1MDB and the 1MDB-PetroSaudi joint venture.

Investigations, on the other hand, reveal that Jho Low provided a sales and purchase agreement to Coutts claiming that the US$330 million were proceeds from the sale of certain assets by Good Star to 1MDB.

“The said agreement provided to Coutts is again inconsistent with the explanation given to Deutsche Bank Malaysia,” says the prosecutor.

In total, US$1.03 billion that 1MDB purported to invest in the joint venture had actually been diverted to the Good Star Account.

In June 2012, 1MDB exchanged its entire “investment” in the 1MDB-PetroSaudi joint venture for a 49% stake in PetroSaudi’s wholly-owned subsidiary PetroSaudi Oil Services Limited (PSOSL), a deal which was booked at US$2.22 billion.

The remaining 51% interest was subject to acquisition by 1MDB for a token sum vide a call option agreement.

The transactions were structured such that 1MDB’s interest in PSOSL and the call option would be held by its wholly-owned subsidiary, 1MDB International Holdings Limited (1MDB IH).

Investigations reveal that the only asset of 1MDB IH was the 49% interest in PSOSL and the call option to purchase the remaining 51% interest.

Investigations also reveal that main assets of PSOSL were two aging drill ships, the PetroSaudi Saturn and PetroSaudi Discoverer.

– http://www.theedgemarkets.com/

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