The investigators’ belief contradicts a conclusion reached recently by Malaysia’s attorney general.
****(SEE COMMENTS LATER...YL, Desi) The attorney general said $681 million deposited to Prime Minister Najib Razak’s account—identified by The Wall Street Journal last year—was a legal donation from a member of Saudi Arabia’s royal family, and most was returned. The attorney general said there was nothing improper and it was time to stop scrutinizing the deposits, a notion echoed by Mr. Najib.
- Special Coverage: Malaysia Corruption Scandal, 1MDB & Najib Razak Latest News
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- Malaysia Leader Najib Razak Lashes Out Against His Critics in Party and Media (Feb. 28)
- Malaysia Panel Advises Continuing Probe of Money Transfers Into Najib’s Accounts (Feb. 24)
- Swiss Prosecutors Investigating 1MDB Say Malaysia Funds Were Diverted (Jan. 30)
- Doubts Raised About Claim of Saudi ‘Donation’ to Malaysia Prime Minister Najib Razak (Jan. 26)
- 1MDB and the Money Network of Malaysian Politics (Dec. 28)
The investigators believe the money moved through a complex web of transactions in several countries and with the help of two former officials of Abu Dhabi, a Persian Gulf emirate with which 1MDB has deep ties.
The investigators are focusing on an entity they believe was a crucial conduit: a firm with a name almost identical to that of a state-owned Abu Dhabi company called Aabar Investments PJS.
In filings, the 1MDB fund has reported paying more than a billion dollars to Aabar—not specifying a full name. Rather than going to the state-owned Abu Dhabi company, investigators believe the money flowed to the similarly named firm, which was registered in the British Virgin Islands, and $681 million made its way circuitously from there to Mr. Najib’s account.
Prime Minister Najib set up 1MDB—short for 1Malaysia Development Bhd.—several years ago to spur economic growth. He heads its board of advisers and often has been involved in its decision making, according to board minutes from several years.
The fund became the subject of investigations about a year ago after it ran up $11 billion of debt. Probes began not just in Malaysia but eventually also in the U.S., Switzerland, Singapore, Hong Kong and, said people familiar with the matter, in Abu Dhabi too.
The Journal reported last year that some of the fund’s money went for projects that helped Mr. Najib’s party retain power in a close 2013 election. Mr. Najib dismissed this description as a claim by political foes, and 1MDB denied playing a role in politics.
In a rare public comment about an active investigation, the Swiss attorney general said in January he suspected that $4 billion had been misappropriated from 1MDB through “complex financial structures.” The 1MDB fund said it hadn’t been contacted by any foreign investigators but stood ready to cooperate.
Mr. Najib has denied wrongdoing or taking any money for personal gain.
His office declined to comment on the assertion the money deposited in his accounts exceeded $1 billion. Most money beyond the previously identified $681 million arrived in 2011 and 2012, said two people familiar with flows into his accounts and a person familiar with one overseas probe. The $681 million arrived in 2013.
Mr. Najib’s office also wouldn’t comment on overseas investigators’ belief that the $681 million originated with 1MDB. That description of its origin is based on bank transfer and loan documents, on interviews with people familiar with the probes in two countries, and on interviews with one of the people familiar with the flows into Mr. Najib’s accounts.
In a statement after the publication of this article, Mr. Najib’s office pointed out the attorney general said the funds came from Saudi Arabia. The office said the Journal’s reporting was part of an opposition campaign to unseat Mr. Najib.
“The Wall Street Journal has become a willing vehicle for certain political actors who are seeking to damage the Prime Minister and Malaysia for personal gain,” the statement said. “But this politically motivated Anti-Najib Campaign, which sought to use Western media, has failed.”
The 1MDB fund declined to comment for this article. Also after this story’s publication 1MDB in a statement repeated its statement from Feb. 19 that it “has not paid any funds to the personal accounts of the Prime Minister.”
The fund also pointed out that the attorney general said the deposits came from Saudi Arabia. “Despite this, the Wall Street Journal continues to repeat the same disproven allegations,” the statement said.
The newspaper’s reliance on anonymous sources, “who may or may not exist, betrays a lack of basic journalistic standards on the part of the Wall Street Journal and the fact that the publication has lost all semblance of balanced reporting,” the 1MDB fund’s statement said.
A spokeswoman for Dow Jones, which owns the Journal, said, “We continue to stand behind our fair and accurate reporting of this evolving story.”
Malaysia’s attorney general, Mohamed Apandi Ali, didn’t respond to requests for comment.
Little of that investment flowed, according to financial statements of Aabar’s parent company, International Petroleum Investment Co., or IPIC, which is an Abu Dhabi sovereign-wealth fund. IPIC guaranteed billions of dollars of 1MDB bonds, though.
The Journal in December reported the transfer of some money from 1MDB into the firm with a name similar to Aabar’s. The 1MDB fund then said it stood by its financial reports, which show payments to Aabar.
The fund’s website and financial filings said it paid $1.4 billion to Aabar—without specifying a full name—as a cash deposit in 2012. The fund also paid nearly $1 billion in 2014 to extinguish options given to IPIC for guaranteeing bonds, according to a draft report by Malaysia’s auditor general.
IPIC has denied to 1MDB that either IPIC or Aabar ever received this nearly $2.4 billion, said people familiar with the matter.
The whole amount moved to the similarly named British Virgin Islands firm, according to the person familiar with flows into Mr. Najib’s accounts. This is also the belief of overseas investigators, said the people familiar with the probes.
From there, $681 million moved indirectly to another British Virgin Islands firm, this one called Tanore Finance Corp., investigators believe.
And they believe this money then moved on to Mr. Najib’s account—transferred out of an account that Tanore held in Singapore with a Swiss private bank called Falcon Bank.
The investigators believe that sometime later, most of the $681 million was sent back into the web of offshore entities through which it had arrived.
The firm with a name similar to Aabar’s was set up in 2012, global investigators believe, by Aabar’s chief executive at the time, Mohammed Badawy Al Husseiny, and by Khadem Al Qubaisi, then managing director of IPIC and chairman of Aabar.
This similarly named firm was called Aabar Investments PJS Ltd.; the established Abu Dhabi company’s name has no “Ltd.”
Abu Dhabi’s president removed Mr. Al Qubaisi last year. Soon after, IPIC’s new management removed Mr. Al Husseiny. In both cases, no reason was given.
A representative for Mr. Al Qubaisi declined to comment. Mr. Al Husseiny and his lawyer didn’t respond to requests for comment.
Spokesmen for IPIC, Aabar and Abu Dhabi all declined to comment, as did Falcon Bank in Switzerland. Falcon is owned by Aabar, the Abu Dhabi firm.
The two British Virgin Islands firms—Tanore and the one with a name similar to Aabar—have shut down.
As for the Malaysian attorney general’s conclusion that the $681 million deposited to Mr. Najib’s account was a Saudi royal-family donation, the international investigators have found no evidence any of this came from Saudi Arabia, according to those familiar with their probes.
A person familiar with 1MDB’s dealings also said the deposit didn’t come from Saudi Arabia. A Saudi official said in January the kingdom’s ministries of finance and foreign affairs had no knowledge of such a donation to Mr. Najib.
Write to Bradley Hope at email@example.com and Tom Wright at firstname.lastname@example.org
DESIDERATA: I wish to COMMENT at length on this quoted para (marked by Desi ****) from the WSJ report on an issue that won't go away, but the latest CLUELESS CEO"s lapdog appointee said the issue had been well explained and people must just move on!
****The attorney general said $681 million deposited to Prime Minister Najib Razak’s account—identified by The Wall Street Journal last year—was a legal donation from a member of Saudi Arabia’s royal family, and most was returned. The attorney general said there was nothing improper and it was time to stop scrutinizing the deposits, a notion echoed by Mr. Najib.
OK< my observations and questions/THINKING ALOUD, STILL ALLOWED HERE?HEAR!:~~~~
Point 1. Since the story was first broken by the WSJ in July 2015, all the Clueless CEO did was; first to deny there was such monies transferred into his personal bank accountsl but later, he quietly admitted Yes, such monies went into his accounts, stressed that he never used any of the monies for his personal benefit/gain.
1(b) Clueless CEO threatened to sue the WSJ soon after, but it was elegant silence since then till date. Anyone will easily conclude, include my young nephew at age 6, that there MUST BE TRUTH IN THE WSJ REPORTS AFTER ALL; otherwise, WHY NOT SUE?
2. The CLUELESS CEO's proud underlings , at minister or deputy level, did tell the Malaysian media that the donation from the Saudi s was used to (i) to help BN led by UMNO win the last General Elections GE13 held in early 2013.
(ii) to help MalSia fight ISIL or DAesh or IS as variously referred to. Yes, a small country like MAlSia wanna behave like a player among the BIG BOYS' CLUB like SAudi Arabia! JUst an aside, we face a HUGH SECURITY PROBLEM Within when some four million or more illegal workers reportedly are within our ranks! Isn't this a MORE PRESENT and REAL DANGER AT HAND? (Desi will try to retrieve from his archives the relevant news reports OK!)
3. The CLUELESS CEO, however, did admit "...most was returned." while maintaining it was all LEGAL, a donation from the royal house of Saudi Arabia, quoting again from WSJ report above "...was a legal donation from a member of Saudi Arabia’s royal family.
In the court of the Malaysian Rakyat, the question is no more just about "legality", the issue of ETHICS and INTEGRITY of a nation's CEO is now being questioned, locally and internationally! Therefore, the CEO is no longer TENABLE as head of Government, should have stepped down immediately the story broke in July, 2015.
4. But, the CEO And his henchmen and cronies think we are living out a play called ALice in Wonderland, "....it gets curiouser and curiouser...", remember?
YEAH, for a CEO used to govern by PRONOUNCEMENT, we get this wistfool royal thinking and advice:
The attorney general said there was nothing improper and it was time to stop scrutinizing the deposits, a notion echoed by Mr. Najib.
RIGHT dare with you guys, I'm looking out for my stommach, anywan wanna join me at De Miang Corner? Buy me BF lah! I worked so heART for ye, my dear ER!
PS: IMPORTANT FOOTNOTE: My original post of same title was first posted 4 March; but when I updated with COMMENTS Yesterday, trying to "upload" the completed, the whole article "cavished into thin air!, alike the funds at 1MDB, difficult to explain eh?! YL, Desi