Blogger: ‘Stolen money’ was from IPIC, not 1MDB


Lim Sian See says US law suits concern payments to IPIC which are at the centre of arbitration in London

(FMT) – Blogger Lim Sian See has pointed out that any money said to have been embezzled from 1Malaysia Development Berhad was actually stolen from Abu Dhabi’s state-owned International Petroleum Investment Company (IPIC).

He said 1MDB could not lay claim to the money, which the US Justice Department said had been embezzled and paid to Penang-born financier Jho Low, motion-picture production firm Red Granite Pictures and Abu Dhabi businessman Khadem Abdullah al-Qubaisi.

Analysing the allegations laid out in a suit by the Justice Department Lim said in his blog LSS Report that “if money from here was stolen, then it was stolen from International Petroleum Investment Co and not 1MDB.”

He said 1MDB had signed joint-venture agreements with Abu Dhabi company Aabar Investments PJS, where Khadem was the chairman and Mohamed Badawy Al-Husseiny the managing director.

The two men were named in the US suit together with Jho Low and Riza Aziz, son of Rosmah Mansor, wife of the prime minister.

The Justice Departmant seeks to seize US$1 billion in assets – including luxury properties, a hotel, a private jet, works of art and royalties to the movie Wolf of Wall Street. The suit says the assets were acquired with money embezzled from 1MDB funds.

Bernama reported that Lim said that 1MDB held that Aabar BVI was a legitimate firm owned by IPIC.

The two companies are in dispute about the money, and the case has gone to arbitration in London.

“For 1MDB to claim that the money is theirs would mean that the entire London arbitration case between IPIC and it would collapse. 1MDB will end up losing billions, while Abu Dhabi’s IPIC will get away blameless.

“This despite both of IPIC’s most senior executives, its former managing director Khadem from 2007 to 2015 and Aabar PJS’s managing director Mohamed Badawy being named as part of the US case and asset seizures,” he added, according to Bernama.

Lim said 1MDB would need to focus on winning its arbitration case by proving that the two senior executives of Aabar and IPIC had acted with full authority of the board and that all checks had shown that Aabar-BVI had legally belonged to both entities.

“1MDB believes it has enough evidence to win the case. It deliberately refused to pay for the scheduled interest payments on the bonds, despite having RM3 billion in the bank then, and allowed the two 1MDB bonds guaranteed by IPIC to default, thus triggering the guarantee by the latter, forcing it to pay up,” he said.

He added that if 1MDB wins this case, then the US$4.5 billion in assets could be recovered from IPIC.

“If this is the case, it is likely that IPIC will take over the US$3.5 billion bonds and allow 1MDB to keep the US$1 billion which it had paid earlier. IPIC will then be the party responsible for reclaiming the US$4.5 billion assets in Aabar-BVI,” he said, Bernama reported.

On the question of how much actual “wang rakyat” had been lost so far, he concluded, none so far.

“Since the amounts alleged to be stolen are from the loans that 1MDB took and are not due, no actual Malaysian money has been lost as yet. This is assuming that the IPIC dispute can be settled in 1MDB’s favour and the US$1.5 billion Global Investment Limited (GIL) bonds is redeemed,” Lim said.

He also pointed out that 1MDB had not defaulted on any loans or bonds so far other than US$3.5 billion bonds in dispute with IPIC.

“In fact, many loans have been completely repaid or settled,” he added.

Lim said if 1MDB won the IPIC arbitration case and also redeemed the US$1.5 billion GIL funds, then it could truly say that none of its money was missing or stolen.

A more detailed analysis of the US law suit is on Lim’s blog.