The US Department of Justice says ’emergency’ loans from Deutsche Bank to Malaysia’s 1MDB worth US1.2 billion in 2014 found its way into the hands of those who bought a luxury yacht which became a controversial issue in Malaysia during Najib Razak’s reign as Prime Minister.
The 1MDB scandal contributed largely in bringing Najib’s regime down in 2018.
A US civil asset-forfeiture complaint repeatedly describes Deutsche Bank as being misled by 1MDB actors.
“For example, one such paragraph states: 1MDB officials secured approval of these two loans through material misrepresentations and omissions to Deutsche Bank, including that the proceeds of the loans would be paid to a legitimate affiliate…,” says the Wall Street Journal.
The US investigators are probing Germany’s Deutsche Bank over its involvement in the 1MDB scandal, saying it probably violated foreign-corruption or anti-money-laundering laws when it helped 1MDB raise US$1.2 billion in 2014, says the Journal.
1MDB took two loans from the German bank, with the first loan worth US$250 million disbursed in May 2014 and by June 3, 2014, at least US$142 million allegedly ended up in personal bank accounts of fugitive businessperson Jho Low.
The Americans claims Low purchased his luxury yacht, the Equanimity with the money. The yacht, seized by the authorities, has been sold to Genting Malaysia Bhd for US$126 million.
Low is in hiding, escaping police at least on one occasion fleeing from Macau to an unknown location last year.
Malaysian police says they are still on Low’s trail and are negotiating with his representatives to get him to come back to Malaysia to help in the 1MDB trial which starts in August this year.
According to Malaysiakini, the investigators also claim at least US$1,277,250 also found its way into the personal bank account of former prime minister Najib Abdul Razak on June 18, 2014.
The Malaysian news portal also says a significant sum from this loan was used to “cover the hole” in 1MDB’s subsidiary Brazen Sky Limited, which claimed to have US$2.318 billion worth of “fund units” in the Bridge Global Absolute Return Fund (Bridge Global Fund) managed by Bridge Partners Investment Management Limited, but the units were “relatively worthless”.
The company was recycling the Deutsche Bank loan using a network of transactions that made it look like Brazen Sky was redeeming the fund units for cash but they were actually moving the same money in circles, news reports say. -/TISG