ANZ selling AMBank stake to a victim of theft and money laundering that ANZ/AMBank facilitated -Swiss AG called it a "‘Ponzi‘ scheme fraud"

by Ganesh Sahathevan

Malaysia's AG reveals further evidence of wrong doing while ANZ's Elliot was still an Ambank director :Sarawak Report analysis suggests AMbank's ANZ led management were willing participants

Previously  reported by Sarawak Report:

“On analysing the evidence obtained, the OAG identified further suspect transactions involving the Swiss financial sector. Firstly, the sum of USD 800 million appears to have been misappropriated from investments in natural resources made by the SRC sovereign fund. Secondly, it is suspected that a ‘Ponzi‘ scheme fraud (i.e. paying the returns on initial investments from funds obtained from subsequent investors rather than from legitimate revenue from the investments) was committed to conceal the misappropriations from both the SRC fund and from 1MDB. These suspected misappropriations from 1MDB were the subject of the OAG’s first request for mutual legal assistance to the Malaysian authorities.

SRC – Raiding Civil Service Pensions

SRC was originally funded by a huge RM3.81 billion loan (US$900 million at today’s conversion rates) awarded in 2011 by the KWAP public pension fund, which is entrusted to look after the retirement savings of Malaysia’s civil servant

And now from Reuters

JULY 12, 2017 / 10:39 PM / 11 HOURS AGO
ANZ Bank nears deal to sell Malaysian banking stake to pension fund: sources

KUALA LUMPUR/ABU DHABI (Reuters) - Australia and New Zealand Banking Group (ANZ.AX) is near a deal to sell its Malaysian banking stake to a pension fund and exit the Southeast Asian nation, sources familiar with the matter said, in a transaction that could be worth around $900 million.

ANZ has been pursuing a sale of its 24 percent stake in its Malaysian affiliate AMMB Holdings (AmBank) (AMMB.KL) since early last year as part of a strategy to divest minority stakes in Asia and as AmBank was dragged into a wide-ranging corruption scandal at state fund 1MDB.

In June, RHB Bank (RHBC.KL) and AmBank said they were starting merger talks, in Malaysia's biggest ever banking deal. As part of the all-share deal, valued at about $9 billion, RHB is looking to acquire AmBank and the two banks are in exclusive talks until the end of August.

ANZ's stake is expected to be roughly 10 percent in the merged entity.

Sources said ANZ is in talks to sell that stake to Malaysian retirement fund KWAP, which already owns small stakes in both RHB and AmBank.

Both firms have "agreed in principle" to the deal at a price equivalent to one time book value of AmBank, said one of the sources.

"KWAP has always had an aspiration to hold a significant investment in a financial institution. KWAP had considered purchasing part of ANZ's stake two years ago but was not agreeable to the pricing," said the source.

Last week, Malaysia's Star newspaper quoted KWAP CEO Wan Kamaruzaman Wan Ahmad as saying the fund was keen on buying ANZ's stake after the proposed RHB and AmBank merger.

KWAP and AmBank declined to comment. "We will decline to comment on market speculation," an ANZ spokesman said.

ANZ's stake is also drawing interest from another Malaysian institutional investor, said the source.

The sources declined to be identified as the discussions were private.

RHB has indicated to analysts that it would pay AmBank shareholders a one-time multiple of the latter's book value.
1mdb Shadow

ANZ wanted to exit the stake partly after AmBank was dragged into a political scandal linked to state fund 1Malaysia Development Bhd (1MDB) and Prime Minister Najib Razak, sources have previously said.

In 2015, AmBank was slapped with a 53.7 million ringgit fine by Malaysian regulators for breaching financial regulations.

Najib has been buffeted by allegations of graft, in particular by revelations of the transfer of hundreds of millions of dollars into his AmBank account in 2013.

The Prime Minister has denied any wrongdoing.

If the RHB-AmBank merger wins the approval of shareholders, the stakes of other key shareholders will also decline in the merged entity. Abu Dhabi's Aabar Investments, with a 17.8 percent stake in RHB, would hold 10.3 percent, according to a note by Maybank Research.

The Abu Dhabi firm, which has been linked to the 1MDB scandal, merged into Mubadala last year. A separate source close to Mubadala said the firm wants to eventually sell Aabar's stake in RHB, but will wait until it gets a "fair" price.

Mubadala declined to comment.


Writing by Anshuman Daga; Editing by Praveen Menon and Muralikumar Anantharaman

SWISS BOMB - Stolen! SRC's US$800m From Public Pension In 'Ponzi Fraud'

• 5 October 2016
 
• 68 comments

Nik Arif Faisal Kamil, CEO of SRC and key business contact of Jho Low

Najib’s hand-picked Attorney General was today publicly shamed by his Swiss counterpart, who was driven to make yet another announcement requesting mutual legal assistance over 1MDB, which has till now been notably unforthcoming.

The Swiss AG, Michael Lauber, rubbed in the message by pointing out that by contrast Singapore has acceded to such requests in all respects and provided full cooperation.

The Swiss press release reminded that a criminal investigation had been opened since August of last year and added devastating new information from the case, revealing that no less than US$800 million is believed to have also been stolen from the former 1MDB subsidiary SRC.

“On analysing the evidence obtained, the OAG identified further suspect transactions involving the Swiss financial sector. Firstly, the sum of USD 800 million appears to have been misappropriated from investments in natural resources made by the SRC sovereign fund. Secondly, it is suspected that a ‘Ponzi‘ scheme fraud (i.e. paying the returns on initial investments from funds obtained from subsequent investors rather than from legitimate revenue from the investments) was committed to conceal the misappropriations from both the SRC fund and from 1MDB. These suspected misappropriations from 1MDB were the subject of the OAG’s first request for mutual legal assistance to the Malaysian authorities.

SRC – Raiding Civil Service Pensions

SRC was originally funded by a huge RM3.81 billion loan (US$900 million at today’s conversion rates) awarded in 2011 by the KWAP public pension fund, which is entrusted to look after the retirement savings of Malaysia’s civil servants.

For years critics have been asking for transparency over where that money was invested, only to be faced with evasive answers and a failure to produce its audits.  Eventually, in 2012 SRC was transferred directly under the Ministry of Finance (thereby removing its highly suspect transactions from 1MDB’s books).

After five years, still no disclosure from Najib…

As late as April of this year Najib Razak, in his role as Finance Minister, was still refusing to accountfor the missing pension money:

“Prime Minister Datuk Seri Najib Razak said details on the RM4 billion loan from Retirement Fund Inc (KWAP) to SRC International cannot be revealed as it has not to been audited. Najib, who is also Finance Minister, in a written reply to Datuk Mohd Ariff Sabri Abdul Aziz (DAP-Raub) said 1Malaysia Development Bhd (1MBD), the former parent company of SRC International, would not reveal such information before it was audited. “The information requested (by Ariff) is part of the information that has not been audited. “1MDB has a standard practice where only detailed information that has been audited will be shared to the public to ensure that the information is accurate and genuine,” he said. [New Straits Times]

Previously, when questioned, Najib, who is directly responsible for the fund, had indicated that the money had been invested in energy sector projects, specifically a Mongolian coal mining venture, Gobi Coal & Energy. However, last year Sarawak Report analysed the figures  and public information to discover that at most only a fractional 5% of the money (at most RM200 million) could have been invested in this apparently flag-ship project.

Now the Swiss have confirmed that their evidence shows that $800 of this money Najib has refused to account for was stolen by former officials from 1MDB and “further persons unknown”

The Swiss further emphasise that the money was misappropriated from “investments in natural resources”. Sarawak Report’s investigations into SRC have indicated that this may be a reference to the Gobi Coal venture.

1MDB’s partner Aabar joined Jho Low’s SRG in a joint buy out of Coastal Energy by its subsidiary CEPSA. Why?

However, we have also questioned the mysterious ‘facilitating role’ which a private company owned by Jho Low, similarly named SRG (Strategic Resources Global as opposed to SRC Strategic Resources Company), adopted in the purchase of Canada’s Coastal Energy together with another of 1MDB’s so-called joint venture partners, Aabar.

Was the purchase of Coastal Energy, which has concessions in the Malaysia region, another vehicle for siphoning money from SRC through the repayment of options believed to have been entered into in the deal?

Shocking Trail To Najib’s Own Accounts

Today’s revelations by the Swiss represent possibly the most damning single piece of evidence produced directly against Prime Minister Najib Razak in the international 1MDB investigations so far. They come on top of the United States’ separate findings in July that US$681 million were channelled from 1MDB into Najib’s personal accounts in KL.

The damage owes to the fact that this was government servants’ pension money, some of which had never even left Malaysia to supposedly be invested.  Extensive tracking by Malaysia’s own anti-corruption investigators had already traced millions of ringgit last year, which were funnelled straight from SRC into a network of private bank accounts in the name of Najib Razak at AmBank.

Now it is learnt that $800 million of the total $900 million was also thieved abroad.

Charges had been brought against Najib over SRC in July last year

The local transfers were first publicised in July last year by Sarawak Report.  RM42 million, which were channelled SRC (via two companies controlled by its CEO) into Najib’s accounts between July 2014 and February 2015 formed the basis for the Charge Sheet drawn up naming Najib Razak.

Later, in January of this year, the new Attorney General, whom Najib hand-picked after unconstitutionally sacking his predecessor to avoid arrest, alerted reporters to further transfers of RM27 million, when he waived MACC flow charts, while at the same time claiming the case was closed.

At least RM59 million has gone direct from SRC into Najib’s private accounts, say MACC investigations – Now Swiss say US$800 was stolen

Apandi ‘cleared’ the Prime Minister (despite official protests from law enforcers and lawyers, who pointed out he had exceeded his constitutional powers in doing so).  The grounds for Najib’s exoneration was that he had thought the money had been passed from a ‘Saudi Royal donation’ into these accounts.

Numerous details have now been released as to how Najib spent this money. Millions were used to fund two credit cards, which were used to buy jewellery and pay for hotel bills during foreign holidays. Millions more were paid out in cheques to 17 so far unnamed individual recipients and over a million ringgit was spent on an anti-ageing therapy for Najib and his wife.

Role of Nik Arif Faisal Kamil

The Swiss challenge over SRC has thrown new question-marks over the man who continues to head SRC, although he has been absent from his desk for over a year since the 1MDB scandal first erupted.

Many believed Nik Arif Faisal Kamil had escaped abroad, however he is believed to be lying low in KL and KK, thanks to the protection of Najib.  Nik Kamil is a long-term close associate of Jho Low, who worked first as his investment officer at UBG (co-owned by Sarawak’s Taib Mahmud) then moved over to 1MDB to steer through the UBG buy-out with money from the fund.

It was after the so-called Project Uganda (the pretended UBG buy-out by PetroSaudi) was completed that Nik Kamil was appointed CEO of the newly minted SRC and its RM3.81 billion in borrowed cash.  Significantly, as Sarawak Report has earlier revealed, the CEO of SRC was also appointed as an “authorised person” over a web of new private accounts set up by Najib at AmBank.

It gave Nik Kamil authority to make payments including ‘cash deposits’, acting presumably as the trusted agent of Jho Low.

These were the same numbered accounts into which money was transferred from SRC over ensuing months, via a separate private company (Gandingan Mentari) of which he also was Director – making Nik Arif Faisal Kamil a top potential suspect as one of the two ‘former 1MDB officials’ being investigated by the Swiss.

Open Invitation to Malaysian Individuals to Complain?

Yet this pales into insignificance now that Malaysians realise that a further $800 million disappeared abroad.

In a crucial line of today’s public release Switzerland requests the Malaysian authorities to provide details of “presumed companies/persons suffering harm” from these monster thefts, so that they can assert their rights in the Swiss criminal proceedings:

“The OAG has also requested assistance from the Malaysian authorities so that the presumed companies / persons suffering harm can assert their rights in the Swiss criminal proceedings.

Clear victims are pension investors in KWAP

The Swiss AG confirms that it has already asked for this information in January, but no response had been forthcoming.

The statement therefore indicates a now open invitation from the Swiss to Malaysian individuals, who believe themselves adversely affected from the thefts to apply directly to the courts in Berne for recompense.

This would appear to include the tens of thousands of Civil Service pensioners whose money was first borrowed by SRC and then misappropriated under Najib’s watch.

The BSI Bank Connection

The Swiss Prosecutor’s seemingly exclusive angle of SRC appears most likely to be related to information received from BSI Bank Singapore (aided by the assistance of the Singapore authorities).  The Singapore court case against the former BSI manager Yak Yew Chee established the bank held accounts not only directly for Jho Low, but also the 1MDB subsidiary Brazen Sky, 1MDB and SRC.

Till now the details of the SRC transactions have remained unpublicised.

Ponzi Scheme Claim Vindicates SR and Tony Pua

The Swiss AG’s announcement of a Ponzi fraud at both SRC and 1MDB has further vindicated suspicions examined earlier on this site. A Ponzi scheme is a method whereby stolen money is concealed by flows of new investments dressed up as previous profits.

Deadly suspicions of Ponzi tactics were unearthed by the AG’s report, declared an Official Secret

Earlier this year Najib had unconstitutionally declared the Auditor General’s report into 1MDB an official secret.

When Sarawak Report published it nonetheless, we reported that DAP finance spokesman Tony Pua had noted compelling evidence indicating fraudulent Ponzi-style ’round-tripping’, designed to gull the auditors Deloittes into recording that money passing through 1MDB’s BSI accounts were ‘profits’ and remittences from its earlier joint ventures with PetroSaudi.

Cayman Treasure Islands

Both the Swiss AG and US DOJ have made clear that some $1.83 billion were in fact stolen from the PetroSaudi joint venture. 1MDB sought to claim however that the ‘investment’ had been sold for a profit, which was then invested in the Cayman Islands.

Under pressure to demonstrate the cash and to show it had been repatriated to satisfy 1MDB’s 2014 Accounts, administrators of the fund produced bank statements to show the flow of US$1.32 billion through its subsidiary Brazen Sky’s accounts at BSI Bank, Singapore.

Pua however noted that during the self same period almost exact sums were recorded leaving the account of 1MDB’s separate subsidiary 1MDB Global’s BSI Lugano account, supplied by later borrowings by the fund. This money was sent to the UBS Singapore account of a bogus BVI subsidiary of the Abu Dhabi fund Aabar, whose top two executives were also again named today as also being under investigation by the Swiss.

From there it would appear these Ponzi payments were transferred on to Brazen Sky, which within hours transferred them back to the BSI Lugano account, which Tony Pua suspects they had originated from.

Ponzi-style ’round-tripping’ to conceal stolen PetroSaudi money from ‘Cayman Island fund’

The details of the thefts, cover-ups and Ponzi-style round-tripping have yet to have been uncovered relating to the further missing sums from SRC.  In its statement the Swiss AG Office claims it is confident that Malaysia’s forces of law and order will at last respond to its requests for cooperation.

However, the European finance centre is already locked in diplomatic conflict with Malaysia over Najib’s extra-terrestial bid to hold Swiss national Xavier Justo captive in jail in Thailand.

And Apandi, of course, will do what Najib tells him

Read the full statement:

Date 05.10.2016

1MDB case: Office of the Attorney General of Switzerland requests further mutual legal assistance from the Malaysian authorities

BERNE. Following the request it made in January 2016, the Office of the Attorney General of Switzerland (OAG) has again requested mutual legal assistance from the Malaysian authorities. The request comes as part of the criminal proceedings opened in August 2015 in relation to the Malaysian sovereign fund 1MDB (1Malaysia Development Berhad). Investigations have revealed that substantial amounts were misappropriated from the SRC sovereign fund and that fraud was committed based on a form of ‘Ponzi’ scheme.

On analysing the evidence obtained, the OAG identified further suspect transactions involving the Swiss financial sector. Firstly, the sum of USD 800 million appears to have been misappropriated from investments in natural resources made by the SRC sovereign fund. Secondly, it is suspected that a ‘Ponzi‘ scheme fraud (i.e. paying the returns on initial investments from funds obtained from subsequent investors rather than from legitimate revenue from the investments) was committed to conceal the misappropriations from both the SRC fund and from 1MDB. These suspected misappropriations from 1MDB were the subject of the OAG’s first request for mutual legal assistance to the Malaysian authorities.

The aim of the OAG’s latest request is therefore to obtain further evidence in corroboration of the latest findings, in addition to the assistance requested in the OAG’s initial request of January 2016, which is still pending. The OAG has also requested assistance from the Malaysian authorities so that the presumed companies / persons suffering harm can assert their rights in the Swiss criminal proceedings.

Based on these new suspicions, the OAG has also addressed an additional request for mutual legal assistance to Singapore, following an earlier request made in April 2016.

Status of the proceedings

On 14 August 2015, the OAG opened proceedings against two former officials at 1MDB and against persons unknown on suspicion of bribery of foreign public officials (Art. 322septies Swiss Criminal Code, SCC), misconduct in public office (Art. 314 SCC), money laundering (Art. 305bis SCC) and criminal mismanagement (Art. 158 SCC).

1MDB case: Office of the Attorney General of Switzerland requests further mutual legal assistance from the Malaysian authorities

The investigation was extended in April 2016 to include two former officials from the United Arab Emirates who had been in charge of Abu Dhabi sovereign funds. They are suspected of committing fraud (Art. 146 SCC), criminal mismanagement (Art. 158 SCC), misconduct in public office (Art .314 SCC), forgery of documents (Art. 251 SCC), bribery of foreign public officials (Art. 322septies SCC) and money laundering (Art. 305bis SCC).

The criminal proceedings being conducted by the OAG focus primarily on misappropriation from the 1MDB sovereign fund of monies intended for investment in the PETROSAUDI, TANJONG / GENTING and ADMIC projects, as well as the misappropriation of investments in the SRC sovereign fund in the area of natural resources.

In May 2016, following the decision in enforcement proceedings brought by the Swiss Financial Market Supervisory Authority FINMA, the OAG opened criminal proceedings against the BSI SA bank related to suspected deficiencies in the bank’s internal organisation. It is believed that, due to these deficiencies, the bank was unable to prevent the commission of offences currently under investigation.

At this stage of the criminal proceedings in connection with the Malaysian sovereign funds 1MDB and SRC, four persons and one bank are under investigation.

In addition, the OAG has confirmed receipt, to its full satisfaction, of the evidence requested in April 2016 from the authorities in Singapore via mutual legal assistance. The OAG remains confident that the two requests for mutual legal assistance made to the authorities in Malaysia will be executed.

Previous press releases in the 1MDB case

•   29.01.2016: OAG requests Malaysia for mutual assistance
•   12.04.2016: Extension of the Swiss criminal proceedings
•   24.05.2016: Criminal proceedings opened against the BSI SA bank