Malaysian government to make a claim over 1MDB Assets

Following the settlement by the United States Department of Justice in the recovery of now-defunct state fund 1Malaysia Development Berhad, the Malaysian government will make a claim on the assets acquired by Jho Low using misappropriated 1Malaysia Development Berhad funds.

The assets purchased by Low using 1Malaysia Development Berhad (1MDB) funds are alleged to be worth around USD600 million, according to a report by Channel News Asia.

“(Low) has now surrendered ... Therefore, the United States Department of Justice now holds and freezes the assets that were bought with Malaysian money. We had proof he is using Malaysia’s money to buy the asset and we will now make a claim (over the 1MDB assets) to the American government,” said Dr Mahathir Mohamad, the Prime Minister of Malaysia.

The United States Department of Justice (DoJ) has said that has reached a settlement to recover USD700 million in assets acquired by Low, which have been reported to have been located in the US, the United Kingdom and Switzerland, and include Low’s private jet, high-end real estate in Beverly Hills, New York and London, amongst others, which have been surrendered by Low.

If approved, the settlement will mark the largest civil forfeiture ever concluded by the Justice Department, it said.

80 individuals and entities were recently issued fines from the Malaysian Anti-Corruption Commission for their connection to a Malaysia State Investment Fund 1Malaysia Development Berhad, with the funds received alleged to total around USD100 million.

Latheefa Koya, Chief Commissioner for the Malaysian Anti-Corruption Commission, has stated that “We have issued compound notices against all of these people and entities for the purpose of them to pay up the fine,” according to a report by Reuters.

Investigators from both the US and Malaysia have been reported to have stated that around USD4.5 billion was misappropriated by the state fund. The fund was established in 2009 by the brother of former premier, Najib Razak, who has pleaded not guilty to the accusation that he received around USD1 billion in 1MDB funds.

1MDB was declared insolvent in May of 2018 and was shortly afterwards investigated by the Minister of Finance, Lim Guan Eng, who commissioned PwC to perform a special position audit and review of the company. The CEO of 1MDB was made redundant the following month for dereliction of duty.

In 2016, 1MDB was investigated by the Federal Bureau of Investigation surrounding its connection to Goldman Sachs regarding multibillion-dollar deals with 1MDB. Banks in the United Kingdom, Australia, Hong Kong and Singapore were similarly investigated for transactions facilitated for 1MDB.

In the same year, the Public Accounts Committee of the Malaysian Parliament blamed the board of the troubled state fund and its former chief for its issues, stating that the board failed to fulfil its responsibilities.