Selasa, 26 Julai 2016

Anwar Ibrahim

Anwar Ibrahim

The DoJ 1MDB complaint analysed: how the named banks fare

Posted: 26 Jul 2016 01:49 AM PDT

EuroMoney- Chris Wright  (Monday, July 25, 2016)

The US Department of Justice's complaint seeking the recovery of assets related to the Malaysian sovereign wealth fund, 1MDB, is compelling reading. In a 136-page filing, a remarkable web of money transfers and illicit purchases is exposed. Several banks are involved in it and three more have since been rebuked by the Monetary Authority of Singapore for failing to implement proper money laundering checks.

So who comes out of it in the best and worst shape? Here is a quick guide:

• Goldman Sachs. Mentioned extensively in the document, but that is no surprise, and the complaint does not tell us anything we did not already know. It confirms Goldman's eye-watering fees and commissions. Of the $1.75 billion raised through bonds in May 2012, known internally as Project Magnolia, Goldman took $192.5 million, equating to 11% of the principal; and of the $1.75 billion it raised in October that year, known as Project Maximus, Goldman appears to have taken $113.74 million. Goldman is further embarrassed by the publication of emails between employees and a 1MDB officer: among them the odd revelation that Jho Low, a Malaysian national who advised on the creation of TIA, 1MDB's predecessor, and one of the central figures of the scandal, addressed his Goldman contact – believed to be Tim Leissner, the former southeast Asia chairman, who left the bank in February – as ‘bro'. Crucially, however, Goldman is not accused of any wrong-doing in the complaint. It is alleged that, among other things, $577 million of the first bond deal was diverted to a Swiss bank account, which had nothing to do with 1MDB's supposed purpose, but it is not alleged that Goldman knew that was going to happen. Nevertheless, Goldman's problems are not over, as it is being investigated separately by the DoJ about whether it violated the Bank Secrecy Act in its work for 1MDB in 2012 and 2013.

• AmBank. Of all Malaysian banks, this is by far the most closely linked to the scandal, since it was at AmBank that the person referred to as “Malaysian Official 1” – understood to be prime minister Najib Razak – held his accounts. The complaint says that between March 21 and 25, 2013, $681 million was sent to one of these accounts, which had earlier received $50 million of other payments from accounts linked to diverted bond proceeds. Using a different AmBank account, just over $620 million was then sent back again in the other direction in August that year. These are the sums that the Malaysian attorney general notoriously described as a personal donation from the Saudi royal family, concluding that there was no case for Najib to answer. AmBank was also the originating bank for a number of transfers in 2011 from 1MDB to an account known as Good Star, which was beneficially owned by Jho Low and which the DoJ allege was used to launder more than $400 million of funds into the US: “after which these funds were used for the personal gratification of Low and his associates.”

• DBS, Standard Chartered and UBS. Although none are mentioned in the DoJ complaint, a day after its release the Monetary Authority of Singapore announced its own findings into 1MDB-related fund flows through Singapore. It announced “instances of control failings” in all three banks and in some cases “weaknesses in the processes for accepting clients and monitoring transactions. There was also undue delay in detecting and reporting suspicious transactions.” The MAS says there were lapses in specific processes and by individual officers: “The lapses were serious in their own right, and will be met by firm regulatory actions against the banks.” All three banks say they notified MAS with concerns about fund flows, so the MAS's objection seems to be around the pace and detail with which these notifications happened and indeed that clients were accepted in the first place.

• BSI Bank was thrown out of Singapore in May by the MAS “in view of its serious breaches of AML requirements and poor management oversight, and gross misconduct by some of the bank's staff.”

• Falcon Private Bank's Singapore branch has also been under constant MAS scrutiny. The MAS's latest announcement speaks of “substantial breaches of AML regulations, including failure to adequately assess irregularities in activities pertaining to customers' accounts and to file suspicious transaction reports.” MAS says it is still examining information on Falcon from the bank's Switzerland head office.

• Deutsche Bank also makes a significant appearance in the DoJ complaint. Deutsche handled a $1 billion-equivalent foreign exchange transfer from 1MDB into the bank account of a joint venture between 1MDB and PetroSaudi, of which $700 million was eventually diverted to the Good Star account. However the complaint does not explicitly criticize Deutsche here, instead accusing 1MDB senior management of making “material misrepresentations and omissions to Deutsche Bank officials”. The complaint prints a lengthy transcript of a 2009 call between a Deutsche Bank employee, a Deutsche Bank supervisor and a 1MDB officer, and another with a Bank Negara official. The exchange shows Deutsche asking questions, albeit somewhat toothless ones, about where proceeds were going and apparently being lied to.

• RBS Coutts also appears in this section, since it held the Good Star account into which the funds were being sent. According to the complaint, RBS Coutts records show that Good Star Limited was formed in the Seychelles in 2009 and that Jho Low opened the Good Star account at an RBS Coutts branch in Singapore in June 2009. Deutsche also handled a 2011 $110 million transfer from 1MDB to Good Star.

• JPMorgan and Wells Fargo also appear. JP Morgan (Suisse) held an account related to the contentious 1MDB-PetroSaudi JV (although this one appears to have been legitimate), and JPMorgan Chase was the correspondent bank for Deutsche's and AmBank's wire transfers that ended up in the Good Star account. JPMorgan was also the correspondent bank for transfers of funds from the Good Star account to the accounts of a Saudi prince who co-founded PetroSaudi, from which they were then apparently transferred to Malaysian official 1. Saudi Arabia's Riyad Bank also enters the story here, as the Saudi prince in question had his account there. Wells Fargo was the correspondent bank on some transfers from the Good Star account to this prince, and is also linked to the purchase of a Bombardier aircraft using 1MDB funds. And Citibank is named as a correspondent bank which handled, among other things, funds that ended up in a BSI Bank account in Switzerland through which some of the bond proceeds from 2012 were alleged by the DoJ to have been diverted. One name that does not appear anywhere in the complaint is CIMB. Earlier this year Nazir Razak, the CIMB chairman and the brother of the prime minister, was linked to the scandal after he disbursed $7 million of funds to various politicians and political groups, apparently at the instruction of the prime minister, and believing them to have been legitimate campaign contributions. He stepped aside to allow himself to be investigated by his own board and by Ernst & Young and was exonerated by both. An interview with Nazir, including his views on the scandal, will appear in the September edition of Euromoney.

Call for Malaysia PM to step down over 1MDB scandal

Posted: 26 Jul 2016 01:38 AM PDT

21 July (Al-Jazeera)

A Malaysian opposition party leader has called on Prime Minister Najib Razak to step down following the lawsuit filed by the US Justice Department to seize $1bn in assets linked to the country’s scandal-plagued 1MDB state investment fund.

The Justice Department said on Wednesday that the assets were “associated with an international conspiracy to launder funds misappropriated” from 1MDB, and included lavish real estate in Beverly Hills and New York, artwork by Monet and Van Gogh, and a business jet.

“I believe the Malaysian people want Dato’ Sri Najib to go on leave as prime minister so as not to create the perception of abuse of power or process to halt or hinder a full and transparent investigation on this very serious issue,” Wan Azizah Wan Ismail, president of the People’s Justice Party (PKR), said in a statement on Thursday.

Malaysia’s government should allow an independent commission investigate corruption claims outlined by the Justice Department, said Wan Azizah, who is the wife of jailed Malaysian opposition leader Anwar Ibrahim.

The lawsuit alleges a complex money laundering scheme that the Justice Department said was intended to enrich top-level officials of 1MDB.

In a press conference in Washington, DC, on Wednesday, US Attorney General Loretta Lynch said the 1MDB funds were used as a “personal bank account”.

The fund is owned by the Malaysian government, but none of the lawsuits named Prime Minister Najib Razak, who has consistently denied any wrongdoing.

However, the case named Riza Aziz, the prime minister’s step-son, as a “relevant individual” in the case.

The lawsuits also named Najib’s friend, Malaysian financier Low Taek Jho, or Jho Low, and Abu Dhabi government officials Khadem al-Qubaisi and Mohamed Ahmed Badawy Al-Husseiny.

Al Jazeera’s correspondent Sohail Rahman, speaking from Kuala Lumpur, said the prime minister’s office issued a statement overnight in response to the allegations.

As the prime minister holds the financial portfolio under which 1MDB operates, and many of his critics say he should have known what was going on “and many actually accuse him of being involved in this whole scenario,” Rahman said.

Ordinary Malaysians will likely be shocked by this US investigation, as the Malaysian government’s own probe of 1MDB has already ended, he said.

“The case in theory has been closed since October when the attorney general here in Malaysia said that there was no wrongdoing, and ordered the Malaysian anti-corruption commission to close the case.”

“However, this re-opens it from, certainly, across the Pacific, where the US now will go forward to try and investigate how these assets were bought,” Rahman said.

In the statement, the prime minister’s office said it would “fully cooperate with any lawful investigation of Malaysian companies or citizens, in accordance with international protocols, as the prime minister has always maintained, if any wrongdoing is proven, the law will be enforced without exception,” he added.

‘Money-laundering scheme’

The 1MDB fund was created in 2009 by the Malaysian government with the goal of promoting economic development projects in the Asian nation.

Instead, officials at the fund diverted more than $3.5bn over the next four years through a web of shell companies and bank accounts in Singapore, Switzerland, Luxembourg and the US, according to the justice department complaint.

Federal officials said more than $1bn was laundered into the US for the personal benefit of 1MDB officials and their associates.

The funds were used to pay for luxury real estate in the US and Europe; gambling expenses in Las Vegas casinos; a London interior designer; more than $200m artwork by artists, including Van Gogh and Monet; and for the production of films, including the 2013 Oscar-nominated movie “The Wolf of Wall Street”.

The complaint said that among those who profited from the scheme was the prime minister’s step-son Aziz, who co-founded Red Granite Pictures, a movie production studio whose films include “The Wolf of Wall Street”.

According to the complaint, 11 wire transfers totaling $64m were used to fund the studio’s operations, including the production of the movie starring Leonardo DiCaprio.

Leslie Caldwell, US assistant attorney general, said at the news conference on Wednesday that neither 1MDB nor the Malaysia people saw “a penny of profit from that film,” or the other assets that were purchased with fund siphoned from 1MDB.

Red Granite said on Wednesday that none of the funding it received four years ago was illegitimate and nothing the company or Riza did was wrong.

Authorities in neighbouring Singapore also announced on Thursday that they seized assets worth $240m in their own investigation of 1MDB-related fund for possible money laundering.

The Monetary Authority of Singapore, as well as the city state’s Attorney-General’s Chambers and the Commercial Affairs Department said their investigation of the funds found “deficiencies” at several major banks, including “undue delay in detecting and reporting suspicious transactions.”

Al Jazeera's correspondent in Washington DC Kimberly Halkett said the investigation is likely to strain US relations with Malaysia, which President Obama had personally tried to cultivate, having played a round of golf with Najib during a visit to the country in 2014.

Papa Gomo loses final bid in appeal against RM800,000 damages awarded to Anwar

Posted: 26 Jul 2016 01:34 AM PDT

PUTRAJAYA, July 26 ? Blogger Papa Gomo has to pay RM800,000 in damages to former Opposition leader Datuk Seri Anwar Ibrahim after losing his final bid to set aside the award.

This was after the Federal Court today dismissed Wan Muhammad Azri Wan Deris, also known as Papa Gomo’s leave to appeal against the decision of the High Court in awarding the amount to Anwar.

The Court of Appeal had on December 4 last year affirmed the High Court’s ruling.

A three-panel bench chaired by Chief Judge of Sabah and Sarawak Tan Sri Richard Malanjum rejected the leave application with RM10,000 costs after finding that the appellant’s case had no merit.

Also in the panel were Federal Court judges Tan Sri Hasan Lah and Tan Sri Zaharah Ibrahim.

The panel made the ruling after hearing submissions from Anwar’s lawyer, Latheefa Koya and counsel Amran Aminuddin who represented Wan Muhammad Azri.

On February 28, 2014, Anwar won his case at the High Court against Wan Muhammad Azri, who was ordered to pay the plaintiff RM800,000 in damages and RM50,000 in cost for linking him to a man in a sex video.

Anwar filed the suit against Wan Muhammad Azri on March 21 2013, seeking RM100 million in damages, alleging that the blogger had posted a series of four defamatory statements and images on his blog dated March 16, 17, 19 and 20, 2013. ? Bernama

 
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