Business Today
PTI feed

1MDB: Malaysia's extraordinary financial scandal

twitter-logoPTI | November 2, 2018 | Updated 14:12 IST

Kuala Lumpur, Nov 2 (AFP) Malaysia's extraordinary 1MDB corruption scandal allegedly saw top officials loot billions from a government fund and go on a worldwide spending spree, buying up super-yachts, Van Gogh artwork and financing a Hollywood blockbuster. The controversy had a huge impact in Malaysia, contributing to the ousting of a coalition that had ruled the country since its independence from Britain in 1957. On Thursday the US Department of Justice unveiled its first criminal charges over the scandal with the indictments of two ex-Goldman Sachs bankers and a shadowy international financier. 1Malaysia Development Berhad (1MDB) is a state investment fund which Najib Razak launched in 2009 shortly after becoming Malaysia's prime minister. Its portfolio has included power plants and other energy assets in Malaysia and the Middle East, and real estate in Kuala Lumpur. The fund was closely overseen by Najib. Whistle-blowers say Low Taek Jho -- commonly known as Jho Low, a jet-setting Malaysian financier close to Najib but with no official positions -- helped set up 1MDB and made key financial decisions. Concerns escalated in 2014 as 1MDB slid into an $11 billion debt hole, and the intensifying public scrutiny led to a string of revelations concerning missing funds. The issue exploded in July 2015 when the Wall Street Journal published documents showing Najib received at least $681 million in payments to his personal bank accounts. The US Department of Justice (DOJ) then piled on the pressure by filing lawsuits to seize some $1.7 billion in assets it said were purchased with stolen 1MDB money. As allegations mounted, Najib purged 1MDB critics from his government, curbed domestic investigations into the fund and enacted a tough new security law. The DOJ started investigating due to claims that huge sums of stolen Malaysian public money were laundered through the US financial system. In its civil suits, the department said that more than $4.5 billion was stolen from 1MDB by high-level officials at the fund and their associates between 2009 and 2015. Tens of millions of dollars in stolen money were used in 2012 by Najib's stepson Riza Aziz, an aspiring film producer, to fund the Hollywood film "The Wolf of Wall Street" starring Leonardo DiCaprio. Hundreds of millions were used, mainly by Riza and Low, to purchase high-end real estate in Beverly Hills, New York and London, a Monet painting for $35 million, a Van Gogh for $5.5 million, a $35 million Bombardier jet and a $100 million stake in EMI Music Publishing. Low, who has been photographed partying with the likes of Paris Hilton and DiCaprio, allegedly used more than $250 million of stolen 1MDB cash to buy a 300-foot (90-metre) luxury yacht.(AFP) AMS AMS

  • Print
A    A   A