SINGAPORE (July 12): Prosecutors in Singapore said Malaysian financier Low Taek Jho is the central figure in probes linked to 1Malaysia Development Bhd., and that he used money traceable to the state fund for his own benefit.
Low received “huge” sums of money, the prosecutors said in court filings made public on Wednesday. About US$1 billion ($1.4 billion) that 1MDB was purported to invest in a joint venture with PetroSaudi International was diverted to a bank account beneficially owned by Low, according to the filings.
“The main victim in this case is 1MDB,” prosecutor Nathaniel Khng said in a Singapore state court. “Jho Low has gone missing from the public eye.”
Singapore’s investigations into 1MDB-related activities has so far seen five people convicted, four of whom have been sentenced to jail. The city-state is the only country so far to have criminally charged bankers.
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.
A request for comment sent via the website of Low’s Jynwel Capital wasn’t immediately answered, nor was an email sent to 1MDB, which has consistently denied any wrongdoing. Low has previously described his role with the fund as informal consulting that didn’t break any laws.
Low issued a statement in June in response to a US Department of Justice lawsuit that sought to recover US$540 million in assets that it said were purchased with funds misappropriated from 1MDB. “We look forward to the court being presented with the actual facts which demonstrate that the DOJ’s case is completely without foundation,” he said at the time through a representative.
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 held by a company that had nothing to do with the project.
Secret Profits
Wednesday’s court hearing saw Yeo Jiawei, a former banker serving the longest jail term in Singapore’s 1MDB investigations, admit to charges including money laundering. Yeo played a role in the transactions involving the fund and made secret profits on the side, prosecutors said.
See: Yeo Jiawei to assist CAD investigations on 1MDB, disgorge profits from money laundering and cheating charges
Yeo, who also pleaded guilty to cheating his former employer, agreed to help with Singapore’s money-laundering probes, which prosecutors described as the largest in the country’s history. He was sentenced to 54 months in jail by the state court on Wednesday. The former BSI SA wealth planner was handed a 30-month term in December on charges of trying to tamper with witnesses in the probe.
Principal District Judge Ong Hian Sun said on Wednesday that the courts must take an “uncompromising stance” to safeguard the integrity of Singapore’s financial system.
Yeo had referred to Low as “boss” and spent at least one night at his house, according to earlier court proceedings. Yeo previously said it was a misunderstanding that he worked for Low. His admission of guilt came after the Monetary Authority of Singapore wrapped up a two-year probe into flows related to the Malaysian investment fund.
Singapore has imposed a total of $29.1 million in penalties 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 accumulated a net worth of $23.9 million through “secret profits” in the 15 months after he left BSI in June 2014, prosecutors said in an earlier hearing. Yeo had said the money was earned legitimately.
Yeo’s lawyer Derek Kang said Wednesday that his client came from a humble background and had “no chance” of working again in the finance industry. Yeo will give up the profits he made from the offenses, Kang said.
