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 Abu Dhabi's sovereign wealth fund, International Petroleum
Investment Co (IPIC), and its subsidiary Aabar Investments PJS said
in a joint statement the BVI firm with an almost identical name,
Aabar Investments PJS Ltd, “was not an entity within either
corporate group.”
They had neither received any payments from the BVI company, which
was wound up last June, nor assumed any liabilities on its behalf,
the statement said.
A Malaysian parliamentary committee investigating 1MDB said in a
report released on Thursday that the Malaysian sovereign fund sent a
total of $3.5 billion to "Aabar BVI".
What happened to the money after it went to the British Virgin
Islands could not be determined, the report said.
The 1MDB fund is solely owned by the Ministry of Finance. Malaysian
Prime Minister Najib Razak, who is also finance minister, was
authorized to sign off on the fund's major transactions, according
to the parliamentary report. Najib has consistently denied any
wrongdoing.
The 1MDB transfers to "Aabar BVI" included about $1.4 billion from a
privately placed bond that Goldman Sachs <GS.N> raised in 2012. The
1MDB fund also made payments of $855 million, $993 million and $295
million as security deposits and other guarantees for the bond to
the BVI firm, the report said.
In response to IPIC's statement, 1MDB said it was surprised that
neither IPIC nor Aabar had any knowledge of payments 1MDB made to
Aabar BVI.
The IMDB fund says its records show documentary evidence of the
ownership of Aabar BVI and of each payment made. The statement did
not say what that ownership was.
It added that legal agreements were negotiated with Khadem Al
Qubaisi in his capacity as managing director of IPIC and chairman of
Aabar or with Mohamed Badawy Al Husseiny, who was CEO of Aabar.
The United Arab Emirates' central bank has ordered a freeze on the
assets of Khadem and Mohamed Badawy, banking sources told Reuters
last week. The reason for the freeze was unclear.
CORRUPTION PROBE
Investigators in at least five nations, in addition to Malaysia, are
scrutinizing various transactions connected with 1MDB in a
wide-ranging money-laundering, fraud and corruption probe.
The U.S. Justice Department has subpoenaed former Goldman Sachs
banker Tim Leissner in its probe linked to 1MDB. Leissner helped
1MDB arrange two bonds in May and October 2012, valued at $1.75
billion each, which are also the focus of an inquiry by Luxembourg
prosecutors.
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Goldman raised a total of $6.5 billion for 1MDB between 2012 and
2013. Goldman has declined comment. Leissner, who could not be
reached for comment, has not been charged with any offense.
The Malaysian parliamentary report said 1MDB's senior management
withheld crucial information from its executive board and made
transactions without its knowledge or approval, resulting in debts
amounting to about $11 billion. The 1MDB board collectively offered
to resign following the report.
Najib has been fending off allegations he was a beneficiary of
1MDB's funds after about $681 million was deposited into his
personal bank account just before a general election in 2013.
Attorney-General Mohamed Apandi Ali said in January the transfer was
a gift from Saudi Arabia's royal family and that most of it was
returned.
The 1MDB fund has denied any of its funds went to the prime
minister. The parliamentary report did not name Najib or link any
transaction from 1MDB to his private bank accounts.
Najib said the report showed the opposition's allegations against
him were false, but that "action will be taken if any evidence of
wrongdoing is found".
Opposition leader Tony Pua, who was part of the parliamentary probe,
said "there was no way" the attorney general or the parliamentary
inquiry could clear the prime minister of the allegations since
billions of dollars that 1MDB sent overseas cannot be traced and
investigations into them continue abroad.
(Additional reporting by Rozanna Latiff in Kuala Lumpur. Editing by
Bill Tarrant.)
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