(July 13): Malaysian financier Low Taek Jho said attempts to link him to recent guilty pleas in 1Malaysia Development Bhd.-related probes are based on “unfounded assumptions,” after Singapore prosecutors said he used money traceable to the state fund for his own benefit.
Low is the central figure in investigations linked to 1MDB and received “huge” sums, the prosecutors said in court filings made public on Wednesday. About US$1 billion ($1.38 billion) that 1MDB was purported to invest in a joint venture with PetroSaudi International Ltd. was diverted to a bank account beneficially owned by Low, according to the filings.
“It has been clearly stated by the Malaysian authorities that there has been no evidence of any misappropriation of 1MDB funds,” Low’s representative said in an emailed statement. “No wrongdoing has been proved in any jurisdiction relating to the alleged misappropriation of 1MDB funds, and this development in Singapore does not change that.”
Singapore’s investigations into 1MDB-related activities have so far led to five convictions and with four people sentenced to jail. The city-state is the only country so far to have criminally charged bankers. On Wednesday, former BSI SA banker Yeo Jiawei, who prosecutors described as Low’s associate, admitted to charges including money laundering and was given a 4 1/2-year jail term.
The probes are part of a worldwide effort to track how much of the US$6 billion that 1MDB raised for development projects was used to pay for luxury real estate, art, lavish parties and more. The US and Switzerland are among the countries also investigating the roles played by banks and individuals. Low has been characterised by US investigators as the controller of a plan to drain billions from the Malaysian fund.
An email sent to 1MDB, which has consistently denied any wrongdoing, wasn’t answered. Low has previously described his role with the fund as informal consulting that didn’t break any laws.
“The main victim in this case is 1MDB,” prosecutor Nathaniel Khng said in a Singapore state court Wednesday. “Jho Low has gone missing from the public eye.”
Low is confident that any impartial party presented with the complete facts will see that the allegations are “flawed, biased and create an inaccurate picture,” his representative said.
A probe by a Malaysian parliamentary committee identified irregularities in 1MDB’s joint venture agreement with PetroSaudi in 2009, when US$700 million was transferred to an account at RBS Coutts Bank Ltd. held by a company that had nothing to do with the project.
Court Hearing
At the court hearing, prosecutors said Yeo played a role in the transactions involving the fund and made secret profits on the side. Yeo agreed to help with Singapore’s largest-ever money laundering probe and would provide investigators with “unique insights, given his past work for Jho Low,” prosecutors said.
Principal District Judge Ong Hian Sun said in handing down the sentence that the courts must take an “uncompromising stance” to safeguard the integrity of Singapore’s financial system.
Singapore has imposed a total of $29.1 million in fines on eight banks as part of its 1MDB probes. Credit Suisse Group AG and United Overseas Bank Ltd. were among the firms that paid penalties, while BSI and Falcon Private Bank Ltd. were also ordered to shut their local operations.
Yeo’s lawyer Derek Kang said his client had no knowledge that there was any illegal diversion of money from the Malaysian fund and will give up gains made from the offenses.
