Given the recent interest in "predicate offences" with regards the 1MDB matter, this writer has decided to re-post the article below, which appears to have been an earlier attempt to use the "no predicate offence" defence to escape prosecution.
Riza Aziz goes to court to challenge the DOJ-Riza relies on AG Appandi's findings, and challenges the DOJ to impugn Appandi's honour, integrity, professionalism ........
n court papers quietly filed this past week, various entities connected to Red Granite Pictures co-founder Riza Aziz are attacking the U.S. government's attempt to seize real estate properties in the huge $1 billion action targeting alleged corruption of Malaysian public funds.
The Justice Department has touted the 1MDB case as its biggest kleptocracy case to date, but Aziz's lawyer, Matthew Schwartz, a former assistant U.S. attorney who once prosecuted Bernie Madoff, slams the U.S. government for failing to include "essential detail" about the supposed crimes. He's demanding a dismissal.
"[T]he Government's entire theory of the case presupposes that the Malaysia Attorney General's findings are factually and legally invalid," states the court papers. "There is therefore no way for this litigation to proceed without a ruling from this Court on whether the Malaysian Attorney General's sovereign functions were illegitimate.".
Singapore's Straits Times reported this morning that Malaysia and Abu Dhabi had "reached a settlement on a dispute involving billions of dollars in debt obligations of scandal-scarred 1Malaysia Development Berhad (1MDB) that is at the centre of an international money-laundering probe."
The paper also reported:
A central piece of the proposed settlement calls for Malaysia to repay Abu Dhabi US$1.2 billion (S$1.7 billion) before the end of this year. The amount represents a loan and accumulated interest charges on a bailout financial package 1MDB received from Abu Dhabi’s International Petroleum Investment Company, or Ipic, in July 2015.
The bulk of the payment on the outstanding loan amount will come from the sale of so-called “fund units” from Brazen Sky Ltd, a financial unit owned by 1MDB, to an undisclosed buyer, according to the financial executives.
This writer has shown on a related blog that the "fund units" are worthless if not non-existent. It is a given that IPIC would be aware of the facts; after all, IPIC subsidiary Aabar is supposed to have provided a guarantee that gave the "fund units" any value in the first place,
IPIC cannot therefore claim to be an innocent recipient of billions which it would know are the proceeds from the sale of those units. IPIC would in fact be party to the continuing laundering of money stolen from 1MDB, perpetuated by an ever growing mountain of Malaysian public funds
1MDB has been made aware of an article, dated 10 October 2015, that has been published in the Sarawak Report, an online blog currently banned in Malaysia. This article has published selectively extracted materials and contains serious and unfounded allegations, in a clear attempt to manipulate readers with respect to events that have previously taken place at 1MDB.
1. 1MDB-Petrosaudi
The fund units, owned by 1MDB subsidiary Brazen Sky Limited, were originally valued at US$2.318 billion in September 2012, as the eventual outcome of various equity and murabaha loan investments totalling US$1.83 billion by 1MDB with PetroSaudi between 2009 and 2011. Over the investment horizon, 1MDB has received and reflected in its audited financial statements, cash returns, i.e. approximately US$81 million murabaha profit, and approximately US$263 million dividends from fund unit investments, i.e. a total cash return of approximately US$346 million and a total gain over time of US$488 million (US$2.318 billion less US$1.83 billion).
2. Fund Unit Redemptions
As of 31 March 2014, the fund units were valued at US$2.33 billion. On 5 November 2014, at the time 1MDB's financial statements for the year ended 31 March 2014 were published, an amount of approximately US$1.22 billion had been redeemed, in cash, with proceeds being substantially utilised for debt interest payment, working capital and payments to Aabar as refundable deposits for options termination.
A sum of approximately US$1.11 billion in fund units remained, which together with a dividend of approximately US$130 million, equates to the remainder sum of US$1.23 billion described in the notes to 1MDB's accounts.
On 14 and 24 November 2014, approximately US$170 million of the US$1.11 billion fund units were redeemed, in cash, leaving a balance of approximately US$940 million in fund units. On 2 January 2015, i.e. prior to Arul Kanda joining 1MDB, a final redemption of approximately US$940 million was undertaken through a sale of fund units to Aabar, with cash payment being deferred. (Note: Aabar was separately a guarantor of the fund in which the units were invested but by mutual agreement, the redemption was via sale of fund units instead of calling on the guarantee. This fund unit sale agreement was subsequently superceded via the Binding Term Sheet signed between 1MDB and IPIC, the "AA" rated parent of Aabar, on 27 May 2015, upon which a payment of US$1 billion was made by IPIC to 1MDB.)
3. 1MDB President and Group Executive Director Arul Kanda's comment
Whilst Sarawak Report has published a number of alleged 1MDB related documents in the past, which we now know to be stolen and possibly doctored goods, sourced from a convicted criminal, I can confirm that – in this particular case – it appears to have published an authentic 1MDB document, namely minutes of a 12 January 2015 Board meeting. This was the first 1MDB Board meeting I attended, i.e. a week after I joined the company on 5 January 2015.
At the meeting, I stated to the Board, based on my understanding of events that occurred before my time, that the redemption of fund units happened in cash for an amount of US$940 million. However, upon further investigation and verification, it became clear that this was a misunderstanding, which I then clarified to the Board and our shareholder, the Ministry of Finance. This clarification is clearly recorded in subsequent Board minutes and can be verified.
On 13 January 2015, I confirmed via a press statement that the remaining amount of US$1.11 billion had been redeemed, in full. What was unfortunately not made clear, was that the redemptions happened partly in cash and partly through the sale of fund units, with cash payment being deferred. It is this important distinction which caused a misinterpretation of my statement, first during a Business Times interview on 9 February 2015 and subsequently by the Ministry of Finance, in a Parliamentary answer on 12 March 2015.
I have explained in detail the sequence of events to the National Audit Department and to 1MDB's auditors, Deloitte, as part of their thorough and professional review of 1MDB's past transactions. In addition, I have openly and publicly taken full responsibility in June 2015 for the misunderstanding on this matter – i.e. the buck stops with me.
In my capacity as President, I answer to the Board and the shareholder of 1MDB. My strong track record speaks for itself and my only professional agenda is to fix the challenges in 1MDB. There is no need for me to lie or cover-up what has happened in the past, as has been alleged by those who make sensationalist claims to drive their own political agenda. Accordingly, I look forward to being questioned in detail on this matter at the upcoming Public Accounts Committee hearings and for my answers to be a part of the public record, to conclusively put this matter to rest.
Malaysia and Abu Dhabi have reached a settlement on a dispute involving billions of dollars in debt obligations of scandal-scarred 1Malaysia Development Berhad (1MDB) that is at the centre of an international money-laundering probe.
A central piece of the proposed settlement calls for Malaysia to repay Abu Dhabi US$1.2 billion (S$1.7 billion) before the end of this year. The amount represents a loan and accumulated interest charges on a bailout financial package 1MDB received from Abu Dhabi’s International Petroleum Investment Company, or Ipic, in July 2015.
The settlement agreement also calls for both parties to enter into negotiations to resolve another dispute involving roughly US$3.5 billion in the form of cash advances and payments from 1MDB to IPIC that are now in dispute. Negotiations will commence early next year and must be concluded before December 2020, during which time both parties will stand down from pursuing any legal action, the executives said.
"... the deal could significantly dilute the international legal challenges confronting Prime Minister Najib Razak’s administration over the fallout from the 1MDB saga."
The Straits Times quoted unnamed banking and legal sources who asserted that the settlement removes all elements of illegality that led to the dispute in the first place, which include funds intended for IPIC being diverted from 1MDB to a shell company.
The DOJ has described the transaction and others consequent to it as theft, and that its actions were intended to " return these stolen assets to their legitimate owners, the Malaysian people."
It is obvious that the above settlement does no such thing and is in fact a further loss to the Malaysian people. Nevertheless, Najib and his bloggers are already on the offensive, rejoicing in what is seen as a masterful escape.As the blogger Rocky Attan put it:
If nothing else, there is now an admission out of Malaysia that Najib and his asscoaites are facing the prospect of prosecution for stealing from 1MDB.
END
French Defence Minister Jean-Yves Le Drian (right) and Australian Defence Minister Marise Payne
This writer has previously noted that DCNS's AUD 50 Billion submarine contract entered into with the Government of Australia seems not terribly different from other scandals the company has gotten into, including the the so-called l'affaire Karachi.
Now it seems the Defence Minister Marise Payne's love of race horses may provide some further clues.The Australian newspaper reported this morning :
Defence Minister Marise Payne co-owns a racehorse with a lobbyist whose company represents firms seeking lucrative Australian military contracts, including the Future Frigate project worth up to $35 billion.
Senator Payne is a co-owner of Tarakona, a largely unsuccessful four-year-old gelding, with a group that includes Matt Hingerty, managing director and chief executive of lobbying firm Barton Deakin.
Barton Deakin is recorded on the federal government lobbyist register as representing defence contractors, including Lockheed Martin Overseas Group, builder of the F-35 Strike Fighter; and Fincantieri SpA, the Italian shipbuilding company.
That contract is far ranging ,According to a DefenseNews report published on 18 April 2017:
Lockheed Martin will report this summer results of studies for potential suppliers of sonar and other critical systems for Australia’s planned fleet of 12 new attack submarines, said Mike Oliver, program director for the future submarine combat system.
“Lockheed Martin has been conducting trade studies in a number of key areas of the submarine’s design,” he told Defense News. “We are examining all options and will deliver the results of those trade studies in June to the customer.”
Sonar is among the key systems, the company’s program team said.
“The choice of sonar systems and arrays is in the hands of Lockheed Martin,” Marie-Pierre de Bailliencourt, general manager at DCNS, told Defense News..
Canberra in September selected Lockheed as combat system integrator, partnering with DCNS, which will design, build and service a fleet of 12 ocean-going diesel-electric boats. The program is worth AUS$50 billion ($38.1 billion) over some 35 years.
A survey of sonar and other systems marks a first step in a selection process that Thales hopes to win through its Australian subsidiary.
The French electronics company expects to secure more than €1 billion of deals, with €100 million per boat based on sonar systems, electronic warfare and periscopes. A towed sonar array is part of the kit.
END
Marise Payne co-owns horse with lobbyist
RORY CALLINAN The Australian
12:00AM April 20, 2017 Save 12
Defence Minister Marise Payne co-owns a racehorse with a lobbyist whose company represents firms seeking lucrative Australian military contracts, including the Future Frigate project worth up to $35 billion.
Senator Payne is a co-owner of Tarakona, a largely unsuccessful four-year-old gelding, with a group that includes Matt Hingerty, managing director and chief executive of lobbying firm Barton Deakin.
Barton Deakin is recorded on the federal government lobbyist register as representing defence contractors, including Lockheed Martin Overseas Group, builder of the F-35 Strike Fighter; and Fincantieri SpA, the Italian shipbuilding company.
Lockheed Martin has the contract to provide Australia’s strike fighters at a cost of up to $17 billion. Fincantieri is bidding for the Future Frigates, a project described as the largest of its type in the world and due to start in 2020.
Senator Payne this morning denied there is a conflict of interest involved in her co-ownership of a racehorse and her interests had been appropriately disclosed.
“There is certainly no conflict of interest there,” she told ABC.
“My interest in horse racing is a matter of clear public record, whether it’s through the parliamentary declaration process or through the normal processes associated with horse racing.
“I think that the story is one which The Australian has chosen to run, but I’m focused on my job in Japan and dealing with the regional security matters which are so important to Australia and so important to our allies and our partners.”
Senator Payne and Malcolm Turnbull last year announced that Fincantieri, BAE and Navantia had been short-listed for the project. The Defence Department awarded the three shipbuilding companies about $12 million each to participate in the process.
Senator Payne met Italian Defence Minister Roberta Pinotti in Australia in February during which she acknowledged “participation by Italy’s Fincantieri in Australia’s Future Frigate program”.
Senator Payne also used her official twitter account to tweet a picture and a positive comment about the February 20 meeting. Mr Hingerty then used his account to “like” the tweet.
Mr Hingerty yesterday confirmed his co-ownership of Tarakona but denied the connection had enabled him extra access to the minister or that he had ever discussed defence contracts with Senator Payne.
“Marise and I are 30-year friends and we share a common interest with racehorses and I’ve always looked for an opportunity to race a horse,’’ he said.
Mr Hingerty said he was not involved in Defence matters for Barton Deakin. “That’s my colleague, John Griffin, and he’s not involved in the racehorse,’’ Mr Hingerty said.
Efforts to contact Mr Griffin yesterday were unsuccessful.
When asked about liking Ms Payne’s tweet about the meeting with the Italian Defence Minister, Mr Hingerty said: “We are friends.”
Asked who the other 11 owners of the horse were, Mr Hingerty said they were friends and relations of Senator Payne and her partner, NSW Tourism Minister Stuart Ayres.
Mr Hingerty said some were friends of his. Two of the group appear to be relatives of Mr Ayres.
Senator Payne has listed her share in Tarakona on her register of interests. Racing records also list a syndicate called Padinga as one of the owners.
A spokesman for Ms Payne said there was no conflict of interest from the horse ownership.
He said the minister had not discussed any Defence contracts with Mr Hingerty.
Mr Hingerty has previously tweeted about defence matters including one example on July 22 last year in which he said he was “very privileged to be briefed by the former vice chair of the Joint Chiefs of Staff on US APAC policy”.
Yesterday he said the briefing occurred only as a result of the annual Amcham program and that it was “interesting but not relevant to any work I personally do”.
Mr Hingerty has also retweeted Senator Payne’s tweets about Defence matters, including one on February 17 in which she tweeted that it had been an honour to lay wreaths at Menin Gate, Polygon Wood and Tyne Cot cemetery for the Australians that fought and died during World War I.
Tarakona, which appears to be named after a dragon in Maori language, has not had any wins from nine starts, collecting prize money of $3680, according to racing websites.
Although Senator Payne declared the racehorse in her statement of interests published in September, she is not listed with the parliamentary website as having filed any other declarations since then.
Barton Deakin’s website says it can help clients if they are “a company needing to frame your investment project to maximum effect with the government”.
“Barton Deakin doesn’t just open doors — it helps you understand what is going on behind them, how to work your company most effectively with the Coalition in government or opposition and, most importantly how to achieve your government corporate strategy goals,’’ the website’s blurb says.
Previously reported on this blog:
EPF will finance OSK's Melbourne development with AUD 175 Million (RM 525 Million) in borrowed money.after providing Ong Leong Huat & family AUD 154 million and a AUD 38.2 Million upfront profit
As reported yesterday the EPF's AUD 175 million contribution has been provided by three Malaysian banks, including RHB Bank:
Further research has shown that the EPF probably sought Australian dollar funding from Malaysian banks CIMB Bank Berhad, OCBC Bank (Malaysia) Berhad and RHB Bank Berhad ,very likely because Australian banks would not fund the project
Tan Sri Ong Leong Huat @ Wong Joo Hwa (“Tan Sri Ong”) was appointed as a Non-Independent Non-Executive Director of RHB Investment Bank on 20 November 2012 and was subsequently appointed as the Chairman of RHB Investment Bank on 23 January 2013. On 27 June 2016, Tan Sri Ong was re-designated as a Non-Independent Non-Executive Director of RHB Investment Bank. He also serves as the member of Board Nominating & Remuneration Committee.
Tan Sri Ong’s other directorships in public companies include RHB Bank Berhad, OSK Holdings Berhad, PJ Development Holdings Berhad (Chairman), OSK Property Holdings Berhad, OSK Ventures International Berhad, KE-ZAN (Holdings) Berhad. He is also a trustee of OSK Foundation.
RHB Bank has extended a loan for the ultimate benefit of a director.MACC and Bank Negara investigation and prosecution ought to follow.
Further research has shown that the EPF probably sought Australian dollar funding from Malaysian banks CIMB Bank Berhad, OCBC Bank (Malaysia) Berhad and RHB Bank Berhad ,very likely because Australian banks would not fund the project.The AFR reported as far back as 2009:
Reed Construction Data found that $12.5 billion worth of residential apartment projects was deferred in the first three months of 2009. The two most active lenders in the market are National Australia Bank and Commonwealth Bank of Australia. High on the banks' hit list are precommitments. Whereas in the past preselling 60 per cent of apartments was enough to get a development out of the ground, some banks are now demanding the whole project be sold. Banks are also calling for increased equity contributions - or "hurt money", as one source describes it - while imposing extended sunset clauses for off-the-plan sales.
Property consultancy Charter Keck Cramer director Robert Papaleo says banks are hesitant to finance individual projects to more than 70 per cent owing to fears they will overexpose themselves to a single developer in one location.
"The banks are now wanting developers to tip in a lot more equity. They want a lot more skin in the game - and as a private developer, you haven't got a corporate balance sheet you can rely upon. From what I'm hearing, banks are basically discounting the value associated with any sales overseas, because they fear that a foreign purchaser may walk away from a contract easier than an Australian might."
Elsewhere in Melbourne, Baracon's Wrap development in Southbank is believed to have faced funding difficulties owing to precommitments.
Also in Southbank, Central Equity's 37-level residential building tower at 110-120 Kavanagh Street worth $88 million has been deferred.(Banks make it hard to build high-rise apartment complexesScott Elliott;4 June 2009
The Australian Financial Review)
Given the current market in Australia precommitment are hard to generate,and that is quite likely why Ong Leong Huat and family needed the EPF to fund the project.
Despite this, OSK's PJ Holdings paid a record setting price for the Melbourne Square site at 93 Kavanagh St, Southbank:
Local developers are competing with offshore operators for sites in the city and the suburbs. Malaysian-based company PJ Development paid a record $145 million for a two-hectare development site at 93-119 Kavanagh Street in South Melbourne in June.
(Offshore rivals hit profits of developers;Simon Johanson, Nicole Lindsay;19 November 2014
The Age)
As reported, when the EPF bought in to the project, it did so at a premium, paying AUD 154 million for 49% of a property bought for AUD 145 million (albeit after development approvals had been obtained,but without EPF funding, the DAs may well be worth nothing).
It does look as if the EPF's involvment in this proejct had been planned from the beginning, when OSK bought the property.
All this seems very much like MARA's Melbourne property scandal, only bigger .See story below.
A simple guide to the sale of Dudley House in Caulfield which has been linked with corrupt Malaysian officials, who allegedly intentionally paid 20 per cent over the asking price.
Even in Melbourne's booming property market, the $22.5 million price tag for a building designed like an IKEA cupboard seemed well above the odds. That's because it was.
Named Dudley House by developers keen to imbue it with a sense of grandeur, it seems the last place to host any untoward dealings.
But the sordid tale of this building highlights one reason that federal treasurer Joe Hockey is so concerned about the foreign funds flowing into an already overheated property market, as well as why local and international corruption fighters say Australia has become an investment hot spot for the crooked and corrupt.
An eight-month Fairfax Media investigation has traced suspicious money flows, court files and corporate records across three continents to uncover why Dudley House's purchase price was so high.
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Its sale was part of a global money laundering and bribery scheme engineered by greedy local developers and powerful officials overseas who pocketed $4.75 million in bribes on this single deal.
Fairfax Media has also discovered that some of these same figures are linked to tax haven companies which are also behind the purchase of around $80 million in Australian properties.
The student accommodation block Dudley House, in Caulfield East, is at the centre of alleged transactions.
By following a complex money trail - which, in a curious twist, includes front companies set up by a Singaporean wedding-cake maker – Fairfax Media has identified the foreign officials who appear to be using Australia as a money laundering hub.
There are also Australian facilitators tied to these suspect dealings, including Melbourne man Peter Mills, who once did a stint in Pentridge prison for corporate fraud. Mills was recently quizzed in a civil court case about whether the $4.75 million generated by inflating Dudley House's sale price was used "to grease palms" overseas.
The Malaysians: Mohammad Lan Bin Allani says he cannot recall the Dudley House dealings.
His reply was short but surprisingly honest. "Yeah, I think so".
Financial laundromat
For a country whose leaders claim it to be a world leader in integrity, Australia is developing an ugly reputation.
In 2012, PNG's chief corruption fighter labelled Australia the "Cayman Islands" of the Asia Pacific, due to the ease in which PNG politicians could invest their ill-gotten wealth in Australian property.
The Chinese government has more recently launched its own campaign, warning that crooked officials are taking refuge and squirelling away embezzled funds in Australia.
Fuelling this developing scandal have been incentives, including fast-tracked Australian residency visas, for overseas businessmen who invest large amounts here.
Earlier this year, Joe Hockey himself intervened to force one of China's richest men to divest a $39 million Sydney Harbourside pad because he'd tried to use front companies based in tax havens to avoid foreign investment restrictions. Last month Fairfax revealed that another Chinese businessman hid behind an elderly Melbourne couple to disguise the purchase of an even bigger mansion in the same neighbourhood, the $52 million Altona.
Only last month, the Paris-based anti-laundering agency, the Financial Action Task Force, warned that "Australia is seen as an attractive destination for foreign proceeds [of crime], particularly corruption-related proceeds, flowing into real estate, from the Asia-Pacific region."
The Dudley House deal is the clearest example to date. But it would have almost certainly remained a secret without Melbourne tradesman John Bond.
The Malaysian connection
Bond, 53, is a man who doesn't walk away from a fight. The barrel-chested former suburban footballer helped manage a jail for young offenders before starting his own window and door company. When the window-maker won a lucrative job to help outfit Dudley House, he dreamed of dramatically expanding his business. But employees need to be paid. And after working on the development for many months, Bond, along with his own staff and dozens of other contractors, were owed several million dollars.
"They [the developers] kept putting it off. It became one week. Then one month. Then six months. And I thought to myself, something is terribly wrong here. They seem like they are never going to pay us."
The 'they' were Melbourne developers, Chris Dimitriou and Peter Mills, along with their joint venture partners – two mysterious Malaysian businessmen.
The Australians: Property developer and suspected facilitator Peter Mills.
These two businessmen, Yusof Gani and Ahmad Azizi, appeared keen to keep a low profile in Australia.
"We knew they were influencing things behind the scenes, but I never met them," says Bond. "All I know is that they are powerful back in Malaysia."
Emails uncovered by Fairfax Media and sent to the Malaysian pair suggest this low profile was aimed at avoiding scrutiny by the Australian Foreign Investment Review Board.
In one missive, their Australian manager, Dennis Teen, suggests that Gani and Azizi understate their true investment in the Dudley House development by falsely nominating Teen as the majority shareholder.
The Australians: Dennis Teen managed the local affairs for Dudley House's Malaysian developers. Photo: Luis Ascui
"The maximum for each individual foreigner without FIRB approval is 15 per cent," wrote the manager in one email, so he suggested the Malaysian duo claim their shareholding was only "14 per cent."
"I'm agreeable," one of them replied.
In Malaysia, Gani and Azizi have a much bigger profile. Each has been anointed a "Dato" by the Malaysian government -- the Malaysian version of a knighthood.
Facebook posts show Azizi and his two sons, Erwin and Erwan, mixing with the elite and getting around in Porches and Ferraris. Erwan hangs out at the Kuala Lumpur Porsche club. There is plenty of international travel, including a family trip to Paris.
The Malaysians: Erwan Azizi, the son of a Malaysian “Dato”, helped facilitate the property deal using his network of contacts.
In Malaysia, where wealth and political connections go hand in hand, the Azizis didn't just have the funds to invest in a multi-million dollar Australian property development. They also had the contacts to pull off a remarkable deal: the sale of this development to the Malaysian government at a massive mark-up.
According to confidential documents, it was Dato Azizi's Porsche-loving son Erwan who facilitated this deal via a network of contacts connected to a multi-billion dollar Malaysian government institution called MARA.
Created in 1965 with the noble aim of helping the rural poor, MARA is a household name in Malaysia. But MARA's decision to buy Dudley House through a subsidiary, MARA Inc, shows how far it has strayed from its core values.
The right price
The property that John Bond had helped to build was worth $17.8 million and Mills, Dimitriou, Azizi and Gani were, according to paperwork, intending to sell it for this amount.
But, around the time that the Porsche-driving Azizi junior helped introduce certain Malaysian officials to the deal, the sale price was suddenly inflated by $4.75 million.
As the two Datos' Australian manager Denis Teen later explained in civil court proceedings lodged on behalf of the Dudley House creditors: "If we didn't agree on the $4.75 million, we would not have the deal".
This inflated sale price of $22.5 million should have increased the prospect of tradesman like John Bond getting paid. But Bond's fears that he and his fellow creditors were about the be ripped off dramatically increased when the Australian developers Mills and Dimitriou appointed an administrator, indicating their company would not be able to pay the bills of the tradesmen who built Dudley House.
By 2013, Bond had spent two years working on the project. He was broke and desperate. His tipping point had come when his son, Cooper, asked his dad to pay for a trip to an interstate football carnival to represent Victoria.
"I couldn't afford it," says Bond quietly in an interview with Fairfax Media. "I had to borrow money from my own parents to send Cooper to Darwin."
The experience left Bond determined to find out who had got rich from Dudley House while he was left facing ruin.
Harking back to his days as a suburban footy player, he pushed back. Hard. With several other creditors, he went to the Victorian Supreme Court, and demanded the appointment to the project of a new liquidator, Pitcher Partners boss Andrew Yeo.
Yeo assigned the case to a bright young Pitcher Partner employee, Odie Henzel, and told him to start digging.
With his well cut suit, neat hair-cut and quiet demeanour, Henzel and Bond could not be more different. But the financial analyst and the window maker soon struck up a rapport. Incensed at Bond's treatment, Henzel joined the mission to unearth the secrets of Dudley House.
Among a cache of documents, Henzel discovered a strange email. It was dated March 8, 2013 and sent by a man purportedly working for Malaysian government officials. It stated that in return for the Malaysian government agency MARA buying Dudley House, a payment of "AUS$4,785,000 in the form of introduction and consultancy fees" would have to be wired to a mysterious Singapore shelf company.
Taking the cake
Fairfax Media tracked down the director of this company to a cake shop in a busy, upmarket Singaporean shopping strip. Her name is Hanna Kamruddin and she nervously revealed she'd been appointed a director of the shelf company after her brother, a Harley Davidson-riding Malaysian called Hishan Kamruddin, introduced her to three men who wanted an offshore company and bank account set up. Hanna Kamruddin agreed to help them in return for $1000. "I'm so naïve," she said when asked about the arrangement.
"When I look back it was a very stupid decision."
Kamruddin insists she does not know the identity of the Malaysians who paid her the $1000.
But she remembered one thing. They were somehow linked to a Malaysian government agency.
Corporate records in Australia reveal more about those linked to front companies directed by the young cake maker. One of the firms was taken over by several powerful Malaysian officials: a former politician turned MARA Investment chairman, Dato Mohammad Lan Bin Allani, and a MARA chief executive, Dato Halim Bin Rahman.
When contacted by Fairfax Media, Allani said he couldn't recall the Dudley House dealings, even though he visited Melbourne to inspect the property in May last year, according to a Malaysian Consulate website. He said he was involved in setting up offshore companies in tax havens as a "convenient" way of selling property bought by the Malaysian government. When questioned about his knowledge of any alleged kickbacks, the former politician hung up the phone.
The front companies directed by the Singapore cake maker aren't the only suspicious corporate vehicles Malaysian officials have used to purchase Australian properties. A company called Thrushcross set up in notorious tax haven, the British Virgin Islands, was used to purchase Dudley House, along with a $23.5 million property on Swanston Street, near Melbourne University. (Dato Azizi's son, Erwan, signed some of the paperwork associated with the deal.)
Malaysian officials from MARA have also used other shelf companies in Singapore, which is also regarded as a tax haven, to purchase properties in Queens Street and Exhibition Street in Melbourne's CBD for around $40 million.
The circuitous path of the $4.75 million dollars generated by inflating the price of Dudley House also points back to the Malaysian government. The money was paid by the Dudley House developers for non-existent services, including "professional advice" and "consultancy and advisory fees."
Corporate records reveal that the firms behind these sham invoices are closely linked to several powerful Malaysian figures, including another top MARA official. The liquidation proceedings lodged in the Victorian Supreme Court after John Bond and Pitcher Partners' intervention provide further evidence that the $4.75 million was paid as bribes.
When quizzed directly about these apparent "kickbacks" in court, developer Chris Dimitriou stated: "To the best of my knowledge, that $4.8 million went to Malaysian parties." Dimitriou refused to answer any of Fairfax Media's questions.
His fellow developer Peter Mills was more forthcoming, telling Fairfax Media in a phone interview that the deal was corrupt.
"I suppose I have to [take responsibility]. But no one told me about it beforehand. Otherwise, I wouldn't have gone along with it."
Zero consequence
While Fairfax Media's investigation has revealed that at least some of those involved in the Dudley House deal have engaged in serious criminal conduct, nobody has been, so far at least, called to account by authorities in Australia or Asia.
To this extent at least, they join hundreds of allegedly corrupt investors confident they can park their ill gotten gains in properties in Sydney, Melbourne or elsewhere.
Australian resident Denis Teen, who managed the local affairs for Dudley House's Malaysian developers, was also called to the stand in the liquidation proceedings. He spoke quickly, appeared nervous and denied knowledge of any corruption (a denial he repeated to Fairfax Media). But his testimony still provided insights into the way he and his partners do business.
"We are not saints," Teen told the court. "We just want a deal done."
