THERE WAS FRAUD ALL ROUND: AFTER PROMISING TO FIGHT IPIC’S DEMAND, NAJIB & CO CAVED IN – LAWYER TELLS KL COURT TO OVERTURN LONDON CONSENT AWARD

KUALA LUMPUR – A lawyer says the High Court should hear the merit of a suit brought by 10 opposition members against Prime Minister Najib Razak, the government and 1MDB for paying US$1.2 billion to Abu Dhabi-based International Petroleum Investment Company (IPIC) as there is an element of fraud.

Lawyer Mohamed Haniff Khatri Abdullah added in his submission before Justice Hue Siew Kheng that Second Finance Minister Johari Abdul had said the government had made part payment to IPIC and its “subsidiary”, Aabar Investment PJS Ltd.

He said Johari, in July last year, had said the government would fight tooth and nail in an arbitration proceeding with IPIC, following a dispute over the payments, in London.

“However, in April, it was revealed that the finance ministry decided not to contest, and entered a consent award to pay US$3.5 billion to the original Aabar,” he told Hue.

Parties made submissions in Hue’s chambers, but Haniff later told reporters the salient points of his submission as to why his clients were objecting to an application by Najib, the government and 1MDB to strike out their suit.

Haniff said the court should hear the substantive matter of the suit as it could declare the consent award invalid under local arbitration law.

Meanwhile, Najib’s lawyer Mohd Hafarizam Harun said the Pakatan Harapan youth leaders who filed the class action had no legal standing and did not suffer any damage.

“They are not parties in the arbitration and they are not adversely affected,” he said.

He also said the High Court had no jurisdiction to hear the suit as the arbitration proceedings had taken place in London.

Hafarizam said the plaintiffs were wrong to include Najib as party to the suit as he was not involved in the deal concerning IPIC and Aabar Investments PJS.

Lawyer Tan Hock Chuan represented 1MDB while senior federal counsel Alice Loke appeared for the government.

In July, the group, identified as Gerakan Anakmuda Tolak Najib (Ganti), sought a court order that the settlement agreement on May 11 between IPIC and 1MDB, which is wholly-owned by the government, at the London International Court of Arbitration be declared invalid.

The opposition youth members also sought to compel Najib, the government and 1MDB to provide detailed accounts of all money paid to IPIC and its subsidiary, Aabar Investment PJS.

The group claimed the consent award agreed on between IPIC and Aabar Investment PJS in London was wrong and fraudulent.

The group said it was forced to resort to suing Najib and two others as no action had been taken on those who made the “fraud payments” to the British Virgin Island-registered Aabar Investment PJS Limited or Aabar BVI, which IPIC claimed was not its subsidiary.

IPIC’s subsidiary is Aabar Investment PJS, without the Ltd.
On April 24, 1MDB said in a statement that IPIC had agreed on a settlement following the arbitration proceedings at the London Court of International Arbitration.

“As per the settlement, 1MDB will, among others, make certain payments to IPIC and will assume responsibility for all future interest and principal payments for two bonds issued by the 1MDB Group of companies due in 2022,” the sovereign fund said.

1MDB previously claimed it had paid IPIC’s subsidiary, Aabar BVI, a total of RM3.51 billion between 2012 and 2014.

However, IPIC disputed this last year, claiming it never received the money.

According to filings with the London Stock Exchange, IPIC said it would receive US$1.2 billion in two equal payments on July 31 and Dec 31. However, the part payment was made only on Aug 30.

– FMT

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