Aug 12, 2018 News
– Wired US$700M to his personal account
– Paid 88% contracts cost when only 13 % works completed
– Wife caught with US$273M worth in jewellery & handbags
– Son paid US$60M settlement in US
The family has links to a yacht worth over US$200M. Their net worth, if all assets are accumulated, would be way over US$5 Billion. In fact, one family member owns jewellery and bags that carry a whopping cost of over US$273M.
This is not the royal family. It is just a glimpse of the lavish lifestyle of the former first family of Malaysia. For years, former Prime Minister of Malaysia, Najib Razak, lived off of the people of his country. He was able to do this by tapping into billions of US dollars stored in the state investment company 1Malaysia Development Bhd (1MDB)—the country’s Sovereign Wealth Fund.
Also, the recently elected government strongly suspects that PM Najib misappropriated money that was loaned to the country from China under the Belt and Road Initiative. It was reported that the allegedly corrupt former PM “made a deal with China” so he could repay money spent from 1MDB fund and maintain the lavish lifestyle he and his family enjoyed. The burden to repay China will now be on the backs of Malaysians who are already crying out.
Each of the countries trapped by China’s glitz and glamour in the likes of the Belt and Road Initiative are coping with the repercussions differently.
While Sri Lanka is trying to keep its head above water by allowing China to take over the US$1.2 B deepwater port they built, Pakistan is looking to secure international financial bailout. But Malaysia is handling its problems more assertively. Malaysia is already making the links between the China initiative and the “1MDB scandal.”
Several China-backed projects with “inflated prices” have been put on hold and the former PM has been slapped with a number of criminal charges.
The recently elected Prime Minister, Mahathir Mohamad is seeking to recoup $4.5 billion in funds potentially lost through 1MDB, with investigations centered on alleged financial irregularities and possible money laundering. The former PM Najib pleaded not guilty to several charges.
The suspicions about the misappropriation of money predate Malaysia’s recent election. But, previous investigations cleared the Ex-PM Najib.
The new government revived the domestic investigation that may have a ripple effect on probes in at least 10 countries related to 1MDB, or on companies and individuals linked to it.
Even one of the USA President, Mr. Donald Trump’s Campaign Fundraisers was implicated.
In addition to this, Malaysian investigators traced some US$700 million wired into PM Najib’s bank accounts. Funds were allegedly transferred from SRC International, a former subsidiary of 1MDB ,into Najib’s personal account.
For all the charges made against PM Najib so far, he has been granted bail.
YACHT, JET, DIAMONDS & BAGS
A few days ago, a super yacht at the heart of the 1MDB corruption scandal, arrived back in Malaysia after being seized in Indonesia. The US$250M yacht was allegedly bought with money stolen from 1MDB.
“The ultimate owner of this yacht is believed to be a Malaysian citizen known as Low Taek Jho, who is now a fugitive and believed to be the mastermind of this plan to steal billions of dollars from 1MDB,” said Al Jazeera’s Florence Looi.
A US$35M jet was also bought with money from the fund.
In May, Malaysian police also seized bags of cash and jewellery worth over US$270 Million from properties linked to Ex-PM Najib and his family. It took three days, six cash counting machines and 22 officials from the central bank to count the cash found at their premises. Jewellery accounted for the biggest portion of the seizure from Najib’s properties – 12,000 pieces of jewellery that authorities said would cost up to $218.6M in retail prices.
The single most expensive item was a diamond necklace with yellow gold worth $1.59M.
There were also a total of 567 handbags in 37 different brands. The Hermes bags alone were worth $12.7M.
The police also found 423 watches worth $19.37M and 234 pairs of sunglasses.
MONEY DIVERTED TO FUND U.S. MOVIES
The production company behind the 2013 film, The Wolf of Wall Street will pay the U.S. government $60 million to settle claims that it benefited from the 1MDB fund.
The case was part of an effort to recover money stolen from the fund.
The Department of Justice said the money-laundering scheme was intended to enrich top-level officials of the fund, including the PM Najib’s stepson.
Proceeds from the fund reportedly went to fund movies by Red Granite Pictures, which was co-founded by the stepson of PM Najib. The case is the largest single action the U.S. Justice Department has taken under efforts to recover foreign bribery proceeds and embezzled funds and several other lawsuits are pending.
Newly elected Prime Minister Mahathir Mohamed, in July, froze over $20 billion in Malaysian infrastructure projects that are part of China’s one belt one road initiative, saying the contract values appeared to be inflated in what he called a sign of possible corruption.
Finance Minister, Lim Guan Eng, said he had ordered the suspension of two pipeline deals and a 688km (430 miles) rail link worth a combined 90.4 billion ringgit (US$22.35B).
The pipeline projects had been awarded to the China Petroleum Pipeline Bureau, while the China Communications Construction Company served as the main contractor for the East Coast Rail Link.
Lim said Prime Minister Mahathir Mohamed had ordered the suspensions in a bid to target Malaysia’s estimated $250B national debt and other liabilities.
“The decisions are solely directed towards the related contractors relating to the provisions mentioned in the agreements, and not at any particular country,” Lim said, in an apparent attempt to allay concerns that China was being singled out.
The deals were among several Beijing-backed projects signed by the ex-PM Najib, who was unseated by his former mentor Mahathir in elections last May. But critics say many agreements lacked transparency, raising suspicions, they were struck in exchange for help in paying off debts from the 1MDB financial scandal which ultimately helped bring down Najib’s regime.
Mahathir, 92, pledged to review Chinese deals seen as dubious.
In May, he postponed plans to build a high-speed rail link between Singapore and Malaysia, which had been agreed on several years ago, saying it was too expensive.
Malaysia’s Ministry of Finance revealed on June 5 that despite 88 percent of contracts for two pipeline projects being paid; only 13 percent of the work has been completed. The projects are backed by Beijing and cost over RM$9.4 billion (~S$3.2 billion).
Payments were made to Chinese state-owned company, China Petroleum Pipeline Bureau. This company won the contracts for both pipelines.
Work on the three-year projects started in April 2017. However, 12 months later, only 13 percent of the construction works were done; despite Malaysia paying out almost 90 percent of the projects’ value.
Malaysia’s Finance Minister, Lim Guan Eng said that the previous Najib administration had agreed to make payments for the pipeline projects “based almost entirely” on calendar dates rather than the projects’ progress.
Prosecutors in the US, one of several jurisdictions investigating wrongdoing at 1MDB, say US$4.5 billion was looted from the fund, with attorney general Jeff Sessions referring to the case as “kleptocracy at its worst”.
Sources: Al Jazeera, Wall Street Journal, Reuters, Bloomberg and Malaysiakini
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