By Veronica Cordoba
Investigations into the extent of the 1MDB scandal shows a network of businesses and people who benefited from a bond flip and they include the founders of a Malaysian portal, The Malaysian Insider.
A company which benefited from the bond flip, the Morningstar Equities, is linked to Malaysians Vincent Cheah Chee Kong and Shaik Aqmal Shaik Allaudin, the founders of The Malaysian Insider.
Recent reports linked the Malaysian Insight to the 1MDB scandal. The Independent ran a story on how informants tipped the Wall Street Journal on the links between Jho Low and the TMI portal but the American newspaper did not follow-up on the story.
Investigations shows Cheah and Akmal, as well as the TMI portal, are linked to the 1MDB mastermind Jho Low, who took over the funding of TMI from 2010 to 2014 as part of a plot to calm down then PM Najib Razak who did not appreciate the portal’s direction.
Vincent Cheah and Shaik Aqmal started The Malaysian Insider in 2007. The bond in question was issued in 2009.
The bond is the first debt issued in May 2009 by 1MDB when it was still called the Terengganu Investment Authority (TIA) and its sole shareholder was the state government, says The Edge.
Jho Low was officially an adviser to TIA and the investment arm was taken over by the Minister of Finance Inc in 2009, three months after Najib Razak was sworn in as Prime Minister of Malaysia. It was renamed to 1Malaysia Development Berhad.
The Edge says Malaysian investigators looking into that transaction have, to date, discovered that AmBank on May 29, 2009, sold RM3.8 billion of the bonds to Thai brokerage firm Country Group Securities Pcl. It says the Thai firm bought them for Low Taek Jho or Jho Low.
“AmBank took RM500 million for itself while the remaining RM700 million was placed out to Aktis Capital Singapore Pte Ltd for its client, a British Virgin Islands company called Morningstar Equities Inc.
“The bonds were sold at a steep discount of 12.08%, that is they paid TIA/1MDB RM87.92 against the face value of RM100. On the same day, AmBank resold the bonds on behalf of Country Group/Jho Low and Aktis/Morningstar Equities to Malaysian investors (mainly pension funds and insurers) for between RM100 and RM105 each, thus enabling itself and clients of Country Group and Aktis to make a big profit estimated at around RM600 million or US$170 million at the 2009 exchange rate,” says The Edge.
It says after the immediate flip, Country Group, on the same day, instructed AmBank to send US$1.1 million to its account at Sime Commercial Bank in Bangkok. It also asked that US$113.42 million be transmitted to Acme Time Pte Ltd’s account in RBS Coutts Singapore. Another sum of US$12.55 million was sent to Acme Time on July 13, 2009.
Furthermore the business portal says, “Singapore investigators have also informed their Malaysian counterparts that apart from the bond profit, tens of millions of dollars that originated from 1MDB were also funnelled into other accounts held by Cheah in Singapore, including Peachtree Capital Ltd.
This money was subsequently moved to Cheah’s accounts at Beaufort International Equities Inc and Autobots Technologies Pte Ltd as well as to the accounts of several individuals.
The Edge also said Singapore authorities have frozen all the bank accounts linked to Cheah and the other individuals, which had around US$30 million left in them. Arrangements are being made to return the seized money to Malaysia.
While it was clear that Country Group was acting on behalf of Jho Low, who was behind Morningstar Equities — the client of Aktis Capital?, asked The Edge.
Aktis Capital is an investment advisory and asset manager for high-net-worth customers.
“Documents sighted by The Edge revealed that AmBank had, on May 29, 2009, transmitted US$21.1 million to the account of Aktis Capital at UOB Bank Singapore. This was the profit earned by Morningstar Equities from the flip.”
Singapore investigators have also informed their Malaysian counterparts that apart from the bond profit, tens of millions of dollars that originated from 1MDB were also funnelled into other accounts held by Cheah in Singapore, including Peachtree Capital Ltd.
“This money was subsequently moved to Cheah’s accounts at Beaufort International Equities Inc and Autobots Technologies Pte Ltd as well as to the accounts of several individuals.”