29
May
16

Malaysia letters deepen mystery over fate of 1MDB cash – Financial Times

Malaysia letters deepen mystery over fate of 1MDB cash

The fate of more than $1bn paid out by Malaysia’s scandal-hit 1MDB state investment fund has come under a fresh spotlight after leaked central bank letters suggested it went to a mysterious offshore company controlled by a flamboyant young financier.

The company in question is the Seychelles-registered Good Star. It is owned, according to claims in one of the central bank letters, by Jho Low, a 34-year-old Malaysian dealmaker and socialite known for partying lavishly with celebrities such as Paris Hilton.

Mr Low has since emerged as a figure of increasing interest as international investigations on several continents gradually reveal more about a case that Swiss authorities say may involve the misappropriation of $4bn from Malaysian state companies.

US authorities are focusing on the Good Star cash flows, according to a person familiar with the matter.

Meanwhile, BSI, the Swiss private bank that counted both 1MDB and Mr Low as clients, is facing a criminal investigation in Switzerland and the shutdown of its Singapore operation over alleged serious money-laundering breaches in relation to the Malaysian fund.

Neither Swiss nor Singaporean authorities named Mr Low, who has not been accused of any offences. He has always denied any wrongdoing in connection with 1MDB.

The 1MDB payments to Good Star were $700m in late 2009 and $330m in May 2011, according to a Malaysian central bank letter dated March 23 and seen by the FT. The letter from deputy governor Nor Shamsiah Yunus to Hasan Arifin, chairman of the Malaysian parliament’s public accounts committee, relates to a committee investigation into 1MDB. Neither Ms Nor nor Mr Hasan responded to requests for comment.

In a second letter on April 6, Ms Nor said two unnamed foreign authorities had told the central bank that Mr Low seemed to be the beneficial owner of Good Star. The overseas agencies provided the information on condition their identities not be revealed, the letter added.

One of the foreign authorities said Mr Low appeared to be the ultimate controller of both Good Star and a bank account in the company’s name opened at RBS Coutts in Zurich in June 2009, the central bank letter said. Swiss authorities are currently investigating hundreds of millions of dollars of 1MDB payments into this account. The letter did not make clear whether the ownership of either Good Star or the bank account had changed since then.

Mr Low did not respond to a request for comment sent to Jynwel Capital, the Hong Kong-based Low family company where he is chief executive.

In the Seychelles, where Good Star is registered, details of shareholders and directors are not openly available from corporate registries. The archipelago’s financial intelligence unit said last month it was assisting international probes into 1MDB.

The central bank letters are prompting new questions about Good Star’s ownership and appear to be at odds with an account given earlier this week by Malaysia’s prime minister.

Najib Razak reportedly told parliament in a written answer that, according to 1MDB records, Good Star was owned by PetroSaudi International, a Saudi oil company, at the time of the fund transfers. Those transfers, he added, were related to a joint venture between 1MDB and PetroSaudi that lasted from 2009 to 2012.

…more
Malaysia letters deepen mystery over fate of 1MDB cash
Michael Peel, Jeevan Vasagar, Anjli Raval and Kara Scannell
May 27, 2016 – Financial Times

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