KUALA LUMPUR (Feb 23): A US federal judge has given the green light for the US Department of Justice (DoJ) and New York developer Steven Witkoff’s proposed plan to sell the Park Lane Hotel, The Wall Street Journal (WSJ)reported.
Controversial businessman Low Taek Jho, better known as Jho Low, owned a major stake in the hotel located in Manhattan, New York.
The WSJ said US District Court Judge Dale Fischer had on Tuesday approved the plan, which was part of a cooperation agreement between Witkoff and the US government to stabilise the financially troubled property and remove Low from the group that owns it.
A group of investors led by Witkoff, along with Low, purchased the hotel in 2013 from the estate of Leona Helmsley for US$654 million ($926 million). Low had provided most of the equity for the acquisition, according to the WSJ.
Witkoff’s group included other prominent names in New York real estate, such as developer Harry Macklowe and Howard Lorber, the chairman of brokerage Douglas Elliman. The group had purchased the property with the intention to convert it into a luxury condominium.
The DoJ alleged that Low — who has been linked to the siphoning of money from troubled 1Malaysia Development Bhd (1MDB) — had used some fraudulent proceeds to purchase his 55% stake in Park Lane Hotel.
Low had also sold a portion of his stake to Abu Dhabi sovereign wealth fund Mubadala Development Co. Both Low and Mubadala had objected to the proposed plan, but the latter had since withdrawn its objections.
The WSJ said Low had objected to the plan partly due to “unsubstantiated fears” that Witkoff“ will enrich himself at the expense of the Low claimants”, according to the judge’s order.
However, the order stated that Witkoff “will be sufficiently checked” by numerous parties if he were “to attempt somehow to unfairly enrich himself”.
Low’s stake in the 46-storey hotel is said to be his biggest asset sought by the US, forming a part of some US$1 billion (RM4.46 billion) in assets allegedly acquired with funds diverted from 1MDB.
His other assets that are being eyed by the DoJ include a US$107 million interest in EMI Music Publishing, a US$30 million penthouse at Time Warner Center in New York and a US$35 million Bombardier Jet, which was seized by Singapore earlier this month.
US authorities also accused Red Granite Pictures of using U$100 million to fund the film The Wolf of Wall Street.
1MDB is currently at the centre of several international investigations by prosecutors in at least four countries — Singapore, Switzerland, Luxembourg and the US — into alleged corruption and money laundering by public officials.
This article appeared in Issue 2355 (Feb 23) of The Edge Financial Daily.
