What Singapore Knows About 1MDB’s Money Trail – Answer: Enough To Really Close The Case

Now that Singapore has signalled that it is working with the Swiss and US regulators to investigate the suspicious money transfers related to 1MDB, it is worth recalling what their Commercial Affairs Department (CAD) and the Monetary Authority of Singapore (MAS) do already know.

1MDB PetroSaudi’s missing money

Zeti Akhtar Aziz, Governor of BNM has officially demanded 1MDB repatriate US$1.83 bn misappropriated from the PetroSaudi JB
Zeti Akhtar Aziz, Governor of BNM has officially demanded 1MDB repatriate US$1.83 bn misappropriated from the PetroSaudi JV

With regard to the first suspicious IMDB transactions in 2009/10, relating to its joint venture with the company PetroSaudi, the three regulatory regimes by now have an almost comprehensive knowledge of what happened to the bulk of the US$1.83 billion, which the Bank of Malaysia (BNM) has formally complained was misappropriated under false pretences (a charge the Prime Minister and his Attorney General have chosen to ignore against 1MDB).

After all, these payments were transferred in US dollars, through the US clearing system, into Swiss banks, meaning they are open to scrutiny by both Swiss and US investigators.

The banks concerned were JP Morgan Swiss, which managed the money that went to 1MDB PetroSaudi’s supposed joint venture operations and RBS Coutts Zurich, which received the original US$700 million that was illegally siphoned out of the joint venture in 2009, plus a second payment of US$330 million in 2011, according to Malaysian investigation papers obtained by Sarawak Report last year.

Further evidence obtained from the PetroSaudi database, leaked by jailed whistleblower Xavier Justo, shows that of the remaining US$800 million sent to the 1MDB PetroSaudi joint venture account, JP Morgan transferred no less than US$386 million into PetroSaudi Director Tarek Obaid’s own private account, which he handily kept at the same bank.

The definitive diagram - pulled together from the documents by The Edge
The definitive diagram – pulled together from the documents by The Edge

US$260 million of that went towards buying out the Jho Low/Taib owned UBG group and the rest went on Tarek’s own expenses.

Only US$400 million of the total sum went into PetroSaudi’s formal operations.  These were managed through accounts mainly handled again by the same branch of JP Morgan, which continued to  transfer vast sums between the business accounts of the sovereign joint venture fund and PetroSaudi and the private accounts of its Directors.

As, Sarawak Report has already detailed, the UK Director Patrick Mahony also opened an account with JP Morgan and received US$33 million of 1MDB’s money via the Tarek Obaid account.

JP Morgan Swiss held numerous public and private accounts for PetroSaudi and its Directors
JP Morgan Swiss held numerous public and private accounts for PetroSaudi and its Directors

In summary it means that of the US$1.83 billion taken from 1MDB only US$400 million went into the intended place, which was PetroSaudi’s operations, of which 1MDB nevertheless claimed only a 40% share under the joint venture (thanks to a false valuation of the company by US top banker Ed Morse.

This was the share that it later claimed to have sold for a staggering US$2.3 billion just a year later in 2012 (of which more later).

The Swiss and US authorities will have been able to share this now public information with Singapore and more.

Where did the money go next? Singapore’s linchpin bank manager at BSI Bank

1MDB Board Minutes have made clear that the Board was horrified to discover back in 2009 how the company’s management under CEO Shahrol Halmi had allowed this money to be extracted in an operation that had been entirely directed by Najib’s appointed advisor at 1MDB, the young businessman Jho Low.

The Chairman of the Board and another member resigned, having unsuccessfully demanded that the money be returned.

Singapore investigators are very well placed to know what happened to the bulk of the missing joint venture money next, thanks to their enquiries into the Singapore branch of BSI Bank, from which a local linchpin for Jho Low’s activities, Yak Yew Chee, has been suspended as a manager and where numerous bank accounts have been frozen.

BSI Singapore - another Swiss private bank in the money trail
BSI Singapore – another Swiss private bank in the money trail

They have ascertained (as Sarawak Report reported last year) that no less than US$530 million of the money siphoned out of 1MDB into the RBS Coutts Good Star Limited account 2009-11 was later transferred into a BSI Singapore account belonging to Jho Low during 2011-13 under the name of a company ADKMIC (Abu Dhabi Kuwait Malaysia Investment Company), which he beneficially owned.

The Singapore authorities notified the Malaysian investigators into 1MDB of this fact in March, as reported by Sarawak Report.

Transfers of 1MDB's cash from Good Star's RBS Coutts account to Jho Low's BSI account.
Transfers of 1MDB’s cash from Good Star’s RBS Coutts account to Jho Low’s BSI account.

The Singapore authorities have also recorded that in February 2014 Jho Low cleaned out this account and closed it.  They will know where that half billion was sent next, because the record will be with the BSI bank branch and, since it was doubtless transferred in dollars, so will the Americans.

Hong Kong connection – time for action?

Sarawak Report has good reason to believe that much of the money moved out of Singapore by Low was placed in Hong Kong.  It is futher understood that the Hong Kong authorities have also put a freeze on multi-billion dollar accounts which trace back to money siphoned from 1MDB.

The people of Malaysia will therefore be waiting to see if the Hong Kong authorities support other international regulators in coming out to openly confirm that they too are applying due enforcement measures to ensure the integrity of their finance centre?

Brazen Lie

Returning to the PetroSaudi missing money and the BSI bank connection, Singapore has further key pieces of the jigsaw puzzle right there at their finger tips, of course.

The Minister of Finance, Najib Razak, made an astonishing claim in 2012 that 1MDB had obtained a fantastic profit out of the PetroSaudi joint venture and had sold out its ‘interest’ to an anonymous entity for USD$2.3 billion (see above).

Not bad for a mere 40% share of an investment of US$400 million a few months earlier!

This windfall, Najib explained, was being invested in an anonymous fund in the Cayman Islands.  Unfortunately, many of Malaysia’s more financially literate politicians proved hard to convince over this, particularly as no evidence was brought forward to substantiate the claims.

The opaque deal was subjected to relentless probing by opposition politicians and eventually it came out that the fund concerned was a shady venture, which was subsequently investigated and dismantled by the Australian regulators. Time to move the ‘investment’, which was suddenly declared to have been “redeemed” and taken under a subsidiary of 1MDB called Brazen Sky Limited.

It was announced by the Ministry of Finance in 2014, therefore, that Brazen Sky had opened an account at none other than very same the Singapore branch of BSI Bank managed by Mr Yak.

This account was declared by the Ministry of Finance and 1MDB in early 2015 to contain US$1.103 billion dollars in cash, the rest having been allegedly spent on 1MDB’s various ‘obligations’, which supposedly included buying out an ‘option’ obtained by the Abu Dhabi Aabar fund on 1MDB’s later power purchase deals (more on that later).

But, as Sarawak Report has already reported, the Singapore authorities told the Malaysian investigators in March that in fact there was no actual cash in this account, as had been adamantly claimed by 1MDB’s CEO Arul Kanda.

The Brazen Sky account was in fact a Brazen Lie account, according to an official letter from the Singapore Commercial Affairs Department to the Bank of Malaysia, obtained by Sarawak Report:

“BSI Bank received a facsimile of the BSI bank statement of account dated 30th Nov 2014 of Brazen Sky Limited, from Mr Arul Kanda, the CEO of 1MDB.  We have received information that the bank statement does not represent the coreect position of the assets nor liabilities of the account and that the bank did not issue such a document”, the letter read.

After our expose Arul Kanda admitted there was no cash and clarified there were only undefined “units” in the account.

This made perfect sense to those who had wondered how 1MDB could have received US$2.3 billion dollars for an investment from which all the money had long since gone and why if they had received the money 1MDB had come up with so many conflicting stories as to why they did not employ the money to help bail it out of its increasing debts?

Aabar and the US$681 million in the PM’s account

The emergence of Mr Yak, due in court in Singapore on Friday, also neatly pulls together yet further key pieces of the 1MDB missing money jigsaw.  This is because it has been revealed that he was not only the relationship manager for Jho Low (yesterday we published emails showing how he transferred millions to purchase diamonds for Rosmah Mansor on behalf of Low) and Brazen Sky.

He was also the manager for SRC International and Aabar Investment PJS Limited, which are all major channels for money that has gone missing from Malaysia’s public coffers and turn out to have had accounts at the very same Singapore Bank!

In the case of Aabar, 1MDB had audited that it had paid US$850 million to the Abu Dhabi fund, which for some reason ‘co-guaranteed’ a USD3.5 billion bond issue to fund 1MDB’s power purchase programme in 2012. The US$850 million was to satisfy an option offered to Aabar in return, it was explained.

Except the Wall Street Journal has pointed out that Aabar Investments PJS Limited (BVI), which is the company that actually received this payment, is not in fact a subsidiary of Aabar or linked in any way to the Abu Dhabi fund, despite the confusingly similar name!

Since we have now learnt that Mr Yak was the Singapore manager for that company account, he will be very easily in a position to tell the authorities exactly who owns this off-shore concern and who therefore actually received that missing US$850 million from 1MDB!

SRC International

Likewise, it has been harder than drawing dragons’ teeth to get a satisfactory answer out of the Malaysian Minister of Finance (the self-same Najib) as to what has happened to the bulk of the RM4 billion that he allowed the company SRC International to borrow from the KWAP public pension fund.

Was Nik Faisal Yak's client?
Was Nik Faisal Yak’s client?

SRC International used to be a subsidiary of 1MDB, of which Najib is the sole shareholder and signatory, but after questions were asked about the failure to provide timely financial records it was moved directly under the Ministry of Finance, also controlled by Najib.

Throughout its changing ownership, SRC has been managed by Nik Faisal Arif Kamil, a close associate of Jho Low, who was also the Investment Manager of 1MDB and simultaneously the Chief Investment Officer at UBG Bank at the very same time that 1MDB was buying out UBG.

Nik Kamil also happened to have a job acting as a proxy (with power of attorney) over the bank accounts belonging to the Prime Minister, which received payments from SRC and he was the director of the company Gandingan Mentari, through which money was transferred from SRC to the PM’s private accounts.

He is now hiding in Indonesia.

Malaysia now knows of course, amidst considerable scandal, that at least RM55 million was transferred into the Prime Minister’s private accounts from SRC – money which came from the public pension fund KWAP.  However, the PM last week has said he didn’t realise the money had come from there and thought it had come in from a generous donor and the Attorney General he appointed has accepted this excuse and decided not to prosecute him – calling him “cleared”.

However, that still leaves an awful lot more missing from SRC which remains unaccounted for.

Sarawak Report has already analysed how a statement by the Prime Minister that the bulk of the borrowed money had been invested in a Mongolian Coal venture does not add up with official company figures, which demonstrate at most that the investment in Gobi Coal can only be worth around RM180 million, leaving most of the RM4 billion still unaccounted for.

The good news is that now that we know that Mr Yak was also the manager for an SRC account in Singapore, perhaps Malaysians can expect to learn more from the Singapore enquiries into this matter as well!

Tanore Finance Corporation

Finally, Singapore is also in a position to tell the world everything it needs to know about that whopping US$681 million “donation” received by the Prime Minister from an anonymous source, which is now being described as a Saudi Royal – more specifically the dead King Abdullah, as touted by media spinners.

Swiss Falcon Bank CEO Eduardo Leeman
Swiss Falcon Bank CEO Eduardo Leeman

This is because the money was paid into Najib’s KL account via the Aabar owned Swiss Falcon Bank’s Singapore branch.

The Chairman of the Bank Mohamed Al Husseiny was also the CEO of Aabar, which had been involved in raising massive bond deals with 1MDB.

Al Husseiny and his boss the Aabar Chairman Khadem Al Qubaisi have now both been sacked by the Abu Dhabi sovereign fund, in a hugely significant crackdown by the Emirate state against the fund’s blatant corruption and mismanagement.  Malaysians are therefore waiting to see, as with Hong Kong and Australia, whether Abu Dhabi will open up about some of the goings on at Aabar regarding 1MDB as they start trying to clean up the mess at this IPIC subsidiary.

Meanwhile, the Swiss CEO of Falcon, Eduardo Leeman, can hardly have been unaware of such an enormous series of transactions in their small Singapore branch. He and the local managers of Falcon Bank in Singapore had a duty to know who was the beneficial owner of the Tanore Finance Corporation (BVI) account held at their bank.

It was from here that the two transfers totalling US$681 million were made to Najib in 2013, so the owner ought to provide a clear indication as to the provenance of the money.

So Singapore can tell us, was it the Saudi King Abdullah, hiding through an off-shore entity or was it perhaps Jho Low, having received the money out of the 1MDB Aabar connected bond for US$3 billion which had just been raised in a mad hurry during the previous week by Goldman Sachs on behalf of Najib Razak?

The Goldman Sachs connection

Of course, the US regulators will be able to ask Goldman Sachs about where the 1MDB bond money was sent once they raised it on behalf of Najib. Altogether three 1MDB bond issues linked to guarantees from Aabar raised US$6.5 billion in 2012-13. So, did the money go to regular 1MDB accounts or to dodgy off-shore companies with accounts in places like Singapore?

Leave of absence Goldman's top guy in Singapore Tim Leissner
Leave of absence Goldman’s top guy in Singapore Tim Leissner

The Singapore authorities will also be able to make queries of Goldman Sachs on this matter, because these bond deals were handled by the Singapore head at the bank, Tim Leissner, who boasted a personal friendship with Najib and Rosmah.

Coincidentally, Leissner has just taken an unexpected leave of absence from his Singapore based job and has returned to the United States. However all these regulatory authorities are well placed to determine whether the Tanore Finance Corporation accounts had anything to do with 1MDB and Jho Low.

Money ‘returned to donor’

Singapore is also perfectly placed to shed light on perhaps the most baffling stage of this twisted tale of missing billions.  Last year Sarawak Report had revealed that Najib had in fact, shortly after the 2013 election, closed down his multi-billion election buying KL account and sent the money back to Singapore.

We reported he had sent USD$650 million back out of the account to BSI.  We also reported that, over and above the famous RM2.6 billion from Tanore Finance Corporation, there had been at least two more multi-million dollar payments into Najib’s KL account at AmBank between 2011 and 2013, meaning that it had topped a billion dollars during the election period.  We reported that this was why Najib had so much remaining to send back out of the country after pouring money into that campaign.

King Abdullah - not in a position to disprove Najib's claim - as he has died
King Abdullah – not in a position to disprove Najib’s claim – as he has died

It took over six months before Najib last week conceded that indeed we were correct and that money had been sent back – the Attorney General gave a figure of US$620 million, which he claimed was sent back to the original anonymous donor of all that money!

However, this new excuse has totally ignored our original information that other payments had also been made into Najib’s account.

To the contrary AG Apandi and Najib’s lawyers have stuck to the line that Najib “returned” all but US$61 million dollars out of an original US$681 to the alleged “Saudi royal donor”, on the basis that this was all he used in swaying the election his way.

Why didn’t he tell everyone that in the first place?

Was he waiting to see if the newspapers had any documentary evidence to prove there was more money in the AmBank account before he decided to ignore the further payments we have identified?  In which case woe betide if more information comes out from the very many investigations into the matter!

Of course, the Singapore authorities can easily obtain the exact figures, since the money went through there.  They can also ascertain if the money was indeed returned in a westerly direction towards a Saudi Royal figure or in an easterly direction towards a 1MDB-related figure, like Jho Low for example, in Hong Kong.

Australian connection

It is at this point that Malaysians are starting to wonder, as with Hong Kong and Abu Dhabi, if the Australians are going to do their duty and step up to the plate alongside the US, Swiss and Singapore authorities?

Because ANZ Bank are the major shareholders of Malaysia’s AmBank and they too must know who were the beneficial parties in the money transfers into Najib’s KL account.

AmBank’s chief executive in KL at the time of these monster transfers into Najib’s account was an Australian banker on secondment from ANZ.  Like Goldman’s Mr Leissner this executive also stepped down earlier than expected last year, however the Australian regulators by now ought to have examined the case and they ought to also know the reason why AmBank has recently paid an enormous multi-million dollar fine for unspecified matters to the Malaysian Central Bank.

In particular, we ask, what steps were taken by the majority Australian owned AmBank to identify the ‘fake sheikh’ who guaranteed all four of the major payments made into Najib Razak’s account 2011-13, as reported by Sarawak Report, which totalled over a billion according to our reliable sources of information?

After all, it was the same sheikh, “His Highness Saud Abdulaziz Majid al-Saud”, who wrote to authorise the payment of US$170 million to Najib from a BVI company named Blackstone Asia Real Estate Partners (BVI) in 2011, as it was who later guaranteed the more famous ‘donation’ of US$681 million from Tanore Finance Corporation (BVI) later in 2013.

Since there is evidence that the beneficial owner of Blackstone Asia Real Estate Partners is 1MDB’s Jho Low, this merits further investigation by the Australian regulators of AmBank, as well as the regulators in Singapore.

To summarise

In summary, the Singapore regulators are in a prime position to identify if the latest explanation coming out of KL, after months of twists and turns, denials and new stories, is true, which is that a Saudi King gave Najib billions of ringgit to help win the 2013 election (and defeat PAS) nearly all of which Najib then sent back.

Or is the far simpler and more logical picture that has started to emerge, in fact the truth, which is that this was all money systematically stolen from 1MDB and KWAP?

What appears plain from the facts, which all piece very nicely together at this stage, is that people with influence over 1MDB, SRC, Aabar and PetroSaudi conspired to remove money from the Malaysian development fund and KWAP pension fund, very much in the way succinctly described last week in the statement of the Swiss Attorney General.

First, these systematic fraudsters pretended to be investing in PetroSaudi, then they pretended to be engaged in raising money and investing with Aabar.  In fact, it is plain to see that very little was invested, meanwhile some RM25 billion (around US$8 billion) has gone missing and unaccounted for from these Malaysian public funds.

If so, did some of that missing money find its way into Najib’s massive election war chest and later was a lot of it returned back out of the country, into the web of off-shore companies and Swiss and Singapore bank accounts, once that election was over?

Also, was some of the rest of the money used to pay off key players who allowed their organisations (namely PetroSaudi and Aabar) to be used as fronts – for example the half billion dollars that Sarawak Report recently exposed as being paid to the sacked Aabar Chairman Khadem Al Qubaisi?

Jho Low -
Jho Low –

Finally, what about all that record money, which has been has been conspicuously lavished by 1MDB’s youthful bigwigs like Jho Low, apparently celebrating their success in looting one of the largest sums of money to have ever been stolen from anywhere?

Indeed, it was the partying and eye-popping expenditures by Jho Low, Khadem al Qubaisi and their champagne-quaffing, blond bimbo-loving friends that first alerted Sarawak Report to the likely destination of 1MDB’s missing billions.

We just followed the money and we have spoken out… and no one has sued us yet!

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