Sunday, May 26, 2019

IPIC-1MDB consent award: Illegality was evident in 2017; investigators should interrogate Mohd Puad Zakarshi

by Ganesh Sahathevan

REPOST of article first published in 2017.The conclusions are self-evident.





Friday, April 28, 2017


LCIA IPIC-1MDB consent award further complicated by revelation that IPIC is directly involved in a sham transaction,not disclosed to holders of its debt securities

by Ganesh Sahathevan



According to senior financial and legal executives, the main hurdle was fund units amounting to US$2.43 billion (S$3.4 billion) held by two 1MDB subsidiaries, Brazen Sky and 1MDB Global Investments, that were guaranteed by IPIC subsidiary Aabar Investments PJS. Aabar had disputed the guarantee.
To overcome the hurdle, 1MDB agreed to waive its right to claim from Aabar the US$2.43 billion guarantee. In return, Abu Dhabi arranged for an undisclosed entity domiciled in the Seychelles to buy the units from 1MDB at the guaranteed value, to be settled by deferred payments from this month to October 2022, said a senior financial executive familiar with the matter.

The transaction highlighted above implies that IPIC is  involved in a round robin transaction where it is in effect paying itself. Worse, the transaction will be booked at the guaranteed value , even after the guarantee is waived. This is clearly a sham transaction.
This new Straits Times revelation adds to the issues of illegality that taint the IPIC-1MDB settlement (see story below),and in fact shows IPIC itself to be directly involved in a new transaction in which the implication of money laundering is hard to avoid.
In addition , given IPIC's   reporting obligations to the London Stock Exchange and its own bondholders pursuant to its GMTN debt programme, the ST story shows IPIC to be guilty of concealing material information from the market.
The London Court Of International Arbitration (LCIA) is being asked to hand down a consent award that will encompass this and all the other transactions currently under investigation by the US Department Of Justice and the FBI, who  the Malaysian Government has made no secret they expect will be defeated by the LCIA consent award.
The likelihood that the consent award will be denied to illegality gets ever more likely.
END 


Thursday, April 27, 2017

Illegality may prevent London Arbitration Court from making a consent award in the IPIC-1MDB matter-Settlement may be denied


by Ganesh Sahathevan



Settlement weakens DOJ's case



IPIC informed the LSE on Monday:


International Petroleum Investment Company PJSC (IPIC), Aabar Investments PJS (Aabar), the Minister of Finance (Incorporated) Malaysia (MoF Inc.) and 1Malaysia Development Berhad (1MDB) are pleased to announce that an agreement has been reached between all parties that provides for a settlement in respect to the arbitration proceedings at the London Court of International Arbitration (the Settlement). The agreement is conditional on the Arbitration Tribunal making a consent award by 31 May 2017.


Meanwhile, a  senior figure in the Malaysian Government and ruling UMNO ,Puad Zarkashi, has said publicly that the settlement is intended to defeat a criminal investigation by the US Department of Justice ,and other national enforcement agencies into 1 MDB, the Malaysian Government and Najib Razak , the Prime Minister and Finance Minister: 

"This arbitration settlement has weakened the US DOJ civil suit and claims that 1MDB's funds were stolen," said Umno supreme council member Mohd Puad Zakarshi in a statement today.Mohd Puad is also the director-general of the Information Ministry's Special Affairs Division (Jasa).

While the rules governing arbitration courts are complex, it is hard to see that the London Court Of International  Arbitration  would want  to be a party to a  consent award where at least one party has made public that the award will be used as a means to defeat a a criminal investigation.To make matters worse, this is a matter that has been very widely publicized. worldwide and it would be impossible for anyone, including the arbitrators in this matter, to deny knowledge of what is intended.

END




Other references:

1MDB -IPIC settlement: 1MDB insists that IPIC will be paid out of "units" guaranteed by IPIC itself:-IPIC now implicated in money laundering



In July 2016 IPIC denied ever guaranteeing "fund units" which are central to its settlement with 1MDB:Units worthless without the guarantee





Posted by at  


Posted by at  
Posted by at No comments:

Thursday, May 23, 2019

Austarlia's 1MDB investigation derailed by the relationship between ANZ and ASIC?

by Ganesh Sahathevan
ASIC's new chair James Shipton
The current ASIC chairman James Shipton is a former Goldman 
man
The Australian Broadcasting Corporation has reported this morning that ANZ chairman David Gonski had  meetings with a former chairman of the Australian Securities & Investment Commission (ASIC) which appear to have influenced the outcome of ASIC's  investigation into the ANZ for rigging the inter-bank rate:


In briefing notes from a May 2015 meeting, an ANZ executive explained the bank's approach.
"It is on a knife edge at the moment. At ASIC, Colin Luxford is still the dominant view in the room," he said.

"The objective is to shake the Luxford view with ASIC."

According to the notes, ANZ chairman David Gonski was meeting with ASIC chairman Greg Medcraft in one-on-one meetings during this time.

"ASIC will want a bit of a win. The bank is trying to craft a solution the bank can live with that would be acceptable to ASIC," the document states.

Eventually, in 2017 the bank did settle, admitting to "attempted unconscionable conduct", and paid a $50 million fine.

The decision caused some disquiet inside ASIC. There was disagreement over the decision to settle. The ABC understands Mr Luxford felt like the regulator was selling out.

This revelation raises additional questions about ASIC's inaction with regards ANZ's role in  the 1MDB scandal. even as  regulators from the United States, Singapore and Switzerland actively pursue companies within their jurisdiction for their part in the 1MDB theft.

ANZ had a central role to play given its management via AMBank of  Ground Zero in the 1MDB scandal, Najib Razak's bank accounts. ASIC has conflict of interest  issues with regards 1MDB  that it has not addressed,and ABC's story about David Gonski and ANZ adds to the suspicion that ASIC is happy to not investigate Australian entities involved in the 1MDB scandal.
END

SEE  ALSO




Friday, June 29, 2018


RE 1 MDB: Malaysia's SC has a 20 year old mutual cooperation agreement with Australia's ASIC that SC refuses to activate (and keeps hidden from 1MDB taskforce,MACC)

by Ganesh Sahathevan

Don't ever trust incompetent and shifty looking people
Don’t ever trust incompetent and shifty looking people
Apandi Ali and Ranjit Singh received awards for not doing their proper jobs
Posted on June 4, 2016 by JEBATMUSTDIE
No less a person than the former Attorney General of Malaysia, Tan Sri Abu Talib Othman , who now oversees the 1MDB investigation has declared:


"They (investigators) are facing a lot of challenges as these are cross-border transactions (and) have to comply with proper protocol and laws applicable as requested by the Prime Minister.
"(He) said you have to comply with due process and rule of law, so they are complying with that as said so (by the PM Tun Dr Mahathir Mohamad)," 1MDB investigation committee head Tan Sri Abu Talib Othman told reporters today after being briefed by the investigators.
"It may look simple but it can be complicated as it involves so many parties. Our jurisdiction ensures that there are no overlaps in the investigation. We (have) identified the overlaps but we clarify it. The overlap is with the SC and police. However, we are getting clearer on the investigation," he added.
The 1Malaysia Development Bhd (1MDB) inquiry is led by the  Securities Commission Malaysia (SC), the Malaysia Anti-Corruption Commission (MACC) and the police.
It's provisions can easily be activated to obtain information from various Australian sources, which the MACC seems to be unaware. 
The SC is clearly compromised, if not compromised and incompetent. Like the MACC ,it needs to be flushed before it is allowed anywhere near the 1MDB investigation. 
END 
See also 

Australian High Commissioner visits MACC,assured despite the evidence & PM Mahathir's complaint that 1MDB investigation will not involve Australia



Australia And New Zealand Slide From Their Responsibilities Over Mass Corruption In Malaysia

Australia And New Zealand Slide From Their Responsibilities Over Mass Corruption In Malaysia

  • 21 July 2017
    •    
  • 83
What has turned the sleazy 1MDB corruption scandal, involving a wide-boy from Penang and a dirty Malaysian politician, into a global issue, has been the light it has thrown on the willingness of major financial instutions to turn a blind eye to massive money laundering.
This has in turn been permitted by deliberately under-staffed regulators, controlled by ‘First World’ politicians, who see no benefit in dealing with corruption in places like Malaysia. They have been willing instead to see their own institutions make money out of the proceeds and to hell with the human misery caused back where the thieves are thieving.
Confronted with the blatant nature of the grubby pillaging of 1MDB, however, and the huge sums flushed through property, businesses and the art market, countries like the United States, Switzerland and Singapore have taken action and are punishing financial facilitators in their regions.
Yet, down south, Australia and New Zealand are still doing their best to pretend none of this was to do with them.
ANZ Bank is the most atrocious example of this failure, since the Australian regulators have done absolutely nothing to investigate, let alone chastise or punish blatant failures by this bank to control vast money laundering activity in a subsidiary where it was the dominant shareholder, namely AmBank.
All the top responsible personnel in charge of compliance, executive decisions and customer care at AmBank were on secondment from ANZ and remained primarily employed by ANZ during their periods of deployment at the KL subsidiary.
Yet, when questioned about the failure of this substantial body of Australian staff members to honestly do their jobs, the response of the bank has been that they had no control over their seconded employees, who in turn were apparently not responsible for their own failures to carry out their legal obligations and report money laundering.
ANZ want to have their cake and eat it. They wanted to be able to brag that AmBank was, thanks to their own investment and major shareholding, a top class bank, run according to the highest global benchmark standards. Yet, when it turned out to be a corrupted can of worms, ANZ have turned round and said they cannot be held responsible.  No one in Australia’s regulatory establishment is holding them to account.
The cover-up is now well underway.  Lowly staff have been sacked, those more senior have quietly retired and ANZ is eagerly preparing to sell off its stake in AmBank, so it can slide away unscathed.
Stunningly, the proposed purchaser of that stake is none other than the Malaysian Government/Najib controlled public pension fund KWAP, which was itself already a victim of 1MDB, having lent some RM4billion to the fund, which Najib then proceeded to notoriously help himself to.  No accounts have been filed for KWAP since December 2015.
Yet now, once again, this public pension money is being funnelled in to get a 1MDB player off the hook and the Australian bankers responsible are showing not the slightest degree of contrition over their responsibility for the this disgraceful outcome.
It is shameful behaviour that will come back to haunt those who have failed their duties.

Trust Us No More! New Zealand’s Reforms Expose Past Lies

In New Zealand, meanwhile, 1MDB has had a different impact, which the authorities are equally attempting to ignore, according to financial commentators who have passed on their observations to SR.
A headline catching court case at the start of the year in Aukland, saw Jho Low win an important battle in his fight to hang on to a previously secret trust he and his family had used to park ownership of hundreds of millions of dollars worth of assets around the world (including in London, Singapore, Paris and the United States) all of which had been purchased with money stolen from 1MDB.
Justice TooGood agreed that in order to contest the asset seizures the Lows could regain control of the New Zealand trust, which they had pretended Rothschild bank had been managing on their behalf – thereby proving that such trusts (which then existed by the thousand in New Zealand) are effectively bogus fronts.
But, if Jho Low won that battle, the exposure of this rotten system seems to have lost the war for the New Zealand bogus trust industry. Following the Panama Papers outcry and cases such as this one the government was forced to officially investigate the scandal and then implement reforms, which included new regulations requiring that the beneficiaries of the thousands of rich man trusts set up in New Zealand now need to be declared.
No longer could such billionaires hide behind companies registered in the Caymans, Bahamas or Mauritius.
No problem, if such individuals are indeed the genuine article.  A review of the country’s trusts by one of its top financial big-wigs, John Shewin  had concluded it could find absolutely no instances where the lax system in New Zealand had been abused. Although, Mr Shewin conceeded that it would plainly be possible to do so, hence these telling reforms.

Shine A Light And The Roaches Run

Now the reform has been implemented as of June 30th of this year, it has predictably resulted in some devastating figures.  This from the country’s own Business News:
“.. new foreign trust disclosure rules came into effect in New Zealand on June 30, which meant foreign trusts have to register with Inland Revenue and provide particulars of all parties, including the settlor and beneficiaries, and assets. They will also have to file annual returns and pay registration and filing fees.

New Zealand had 11,645 trusts in April last year but fewer than 3000 have registered with Inland Revenue under the law changes. Some 3000 said they didn’t want to operate under the new rules while another 5000 didn’t respond, meaning they will be struck off.
However, as financial writer Graham Adams has told Sarawak Report “Extraordinarily, the government is spinning this as trusts finding the new conditions to be onerous rather than evidence of the trusts formerly being used to hide illicit money and packing up shop because their cover has been blown”.
And, so it seems. The government minister responsible appears to believe the whole episode provides a grand excuse for New Zealand’s regulators to pat themselves on the back rather than hang their heads in shame over years of harbouring thousands of crooked accounts:
“Revenue Minister Judith Collins said the drop in trust numbers was not surprising and it shouldn’t be assumed that was because many had been handling the proceeds of illegitimate activities.  “There is a much heavier compliance burden under the new regime with more disclosure required than ever before.”.. she said, adding New Zealand now had a “world class regime”.[Stuff NZ]
Who believes that – after all, how burndensome is it to write down your own name?
Nor is this system yet ‘world class’.  The New Zealand Government have notably refused  to extend to the full transparency that would actually be expected of a benchmark regime i.e. an open register where journalists and others could cross reference potentially illegal activity.
This means that, for example, Sarawak Report is unable to inform Malaysians whether Jho Low and his family are one of the few to have re-registered their trust in New Zealand.  They may have done so. After all, in the end they got what they wanted from the courts despite being fully exposed in the process.
Like Australia with its banks, New Zealand should be ashamed of the comparatively paltry $40 million a year that certain financial folk were making out of facilitating grand theft through such trusts from countries around the world, including the largest kleptocracy case ever from Malaysia.
We give the last word to their Labour Revenue Spokesman, Michael Wood, quoted as saying “Our view is the most likely reason [so many trusts have quit New Zealand] is because the people engaged in setting up foreign trusts are by definition wanting to hide their assets from their own jurisdictions and don’t want there to be any sunlight on their activities,”
That conclusion is inescapable and Australian and New Zealand spokesmen have fooled nobody by denying the obvious.


Posted by at   

No comments:


Post a Comment

Posted by at No comments:

Repost: In 2015 1MDB insisted that payments to the fake Aabar were proper, legitimate, investigated by the auditors who found nothing wrong

by Ganesh Sahathevan

Deloitte was the auditor for 1MDB units Bandar Malaysia, the sukuk (Islamic bond) issuer, and 1MDB Real Estate for financial years ended March 2015 and 2016.
Deloitte was the auditor for 1MDB units Bandar Malaysia, the sukuk (Islamic bond) issuer, and 1MDB Real Estate for financial years ended March 2015 and 2016.PHOTO: REUTERS

The Wall Street Journal's Bradley Hope reported today, 17 December 2015 :

A 1MDB unit transferred at least $850 million via three transactions last year to a British Virgin Islands-registered company with a name that made it look like it was controlled by IPIC, according to wire transfer documents viewed by the Journal and two people familiar with the matter.
The 1MDB fund sent the money to “Aabar Investments PJS Ltd.” which closely resembles the name of IPIC’s wholly owned subsidiary Aabar Investments PJS, the wire documents show.

The background to today's story , Hope explains:
The 1Malaysia Development Bhd. fund, or 1MDB, set up by Malaysian Prime MinisterNajib Razak in 2009 to promote economic development, is under investigation in at least six countries over a broad array of allegations that money was siphoned off for political spending and for personal gain.
One focus of investigation is $2.4 billion in payments that 1MDB said it made to a unit of Abu Dhabi’s International Petroleum Investment Co., or IPIC, as part of a deal involving the Malaysian fund’s purchase of power plants. The Journal reported in September that IPIC officials had concluded they did not receive the money, according to people familiar with the matter.
In response to the story in September 1 MDB issued  a press release in which it confirmed that the payment in question was in fact made:

We refer to a biased article by the Wall Street Journal today relating to US$1.4 billion of payments made by 1MDB. We note that the Wall Street Journal does not name its source or provide any proof of the unproven allegations it is making, thereby seriously discrediting its sensationalist story.
1MDB cannot speak on behalf of Aabar or IPIC nor can we comment on the accounting arrangements of third parties. What we can confirm is that the 1MDB audited financial statements clearly describe the amount and purpose of the payments, which for the avoidance of doubt, is structured as a deposit (i.e. a financial asset belonging to 1MDB and not an expense to 1MDB).
Secondly, based on those payments, we can confirm that IPIC did provide and continues to provide, guarantees for the principal and interest of 2 x US$1.75 billion bonds issued by 1MDB, with a total principal and interest amount of approximately US$5.5 billion.
Thirdly, we can confirm that 1MDB auditors, Deloitte, made specific and detailed enquiries on these payments prior to signing off on the 1MDB audited accounts.
Fourthly, Deloitte has strongly defended its methodology and audit process of 1MDB at the Public Accounts Committee (PAC) hearings, a bipartisan select committee of the Malaysian Parliament. Accordingly, the Wall Street Journal is wrong to state “it isn’t clear what happened to the funds”, at least not from a 1MDB perspective.
More importantly, we are shocked that a hitherto reputable publisher such as the Wall Street Journal would make use of clearly confidential information in its reporting. We refer specifically to the WSJ confirming it has reviewed a “transcript of the proceedings”, from a parliamentary committee probing 1MDB, of which the only possible source is the PAC hearings on 1MDB.
The Standing Orders of the Malaysian Parliament very clearly states that “the evidence taken before any Select Committee and any documents presented to such Committee shall not be published by any member of such Committee, or by any other person, before the Committee has presented its Report to the House”.
The actions by Wall Street Journal are a potential breach of Malaysian law by a supposedly respectable foreign publication. We are further concerned as to who involved in the PAC hearings may have leaked this transcript, which is clearly an attempt to prejudice the PAC investigations and deny 1MDB its right to due process as provided for by the laws of Malaysia.
1MDB strongly urges the relevant authorities to investigate this matter thoroughly and take all requisite action to preserve the process integrity and Standing Orders of the Malaysian Parliament.

Bradley Hope's story today suggests that 1 MDB transferred funds it called a deposit to a dummy corporation neither it nor the apparent recipient, Aabar PJS, owned or controlled. 1 MDB's statement above confirms everything but the  identity of the recipient.
The assertion " that 1MDB auditors, Deloitte, made specific and detailed enquiries on these payments prior to signing off on the 1MDB audited accounts" seems to be an attempt to hide behind the auditors error. Deloitte appear to have made a  mistake not uncommon among auditors, in this case not realizing    “Aabar Investments PJS Ltd" and “Aabar Investments PJS" are not the same entity.  It should be kept in mind that Deloitte were investigating a deposit, not a payment, in which case the auditors would have likely requested a proof of deposit from the entity in question, in this case Aabar Investments PJS Ltd. Audit processes are not likely to have required Delloite to seek proof of anything else. It does appear as if 1 MDB (and/parties acting in concert )was itself the party that provided the proof of deposit.
END

And reported today, 23 May 2019

Malaysia's police raid Deloitte's office over 1MDB case

Posted by at No comments:

Sunday, May 19, 2019

Najib's SRC trial: Interesting use of Islamic banking facilities, inter-posed charitable trusts to break -up cash flows into discrete unconnected packages -evidence can prove problematic for ANZ's Shayne Elliot

by Ganesh Sahathevan


The diagrams  below published by the Malay Mail which illustrate the cash flows relied on by the prosecution to prove the charges against Najib Razak reveal an interesting use of Islamic banking facilities  (which by nature are profit sharing arrangements between bank and client)  and inter-posed charitable trusts (which are meant to be discretionary)  to break-up what can appear to be simple linear flows into discrete seemingly independent packages.

These arrangements create problems for many, but especially the ANZ Banking Group Ltd whose management oversaw these transactions.It is management's duty to ask questions about transactions of this type.Instead, ANZ CEO Shayne Elliot continues to distance himself from the problem. going so far as to claim that he was not a member of  the AMBank board oed.f  directors when these transactions were executed, when in fact he was.














(Source:SRC trial recap: Najib’s cheque recipients)



END

Reference

    The issue was,and remains ,ANZ client and "ally" Najib Razak, not 1MDB:Another example of how ANZ and Shayne Elliot misled parliament

by Ganesh Sahathevan


Shayne Elliot
 Shayne Elliot, ANZ’s chief executive, 
is appearing before 
MPs to answer questions about 
the bank’s conduct. 
Photograph: Lukas Coch/AAP

The Guardian reported this response from ANZ CEO Shayne Elliot to the House of Representatives Economics Committee  when questioned about the 1MDB money laundering scandal:



11:57

"No link" to 1MDB scandal, Shayne Elliott says

Adam Bandt has quizzed the ANZ executives about its role sitting on the board of Malaysian bank AmBank which held billions in the 1MDB funds at the centre of a global financial scandal.
More than $US1bn is alleged to have flowed into Malaysian prime minister Najib Razak’s bank ­accounts between January 2011 and April 2013 — much of it from 1MDB.
ANZ chief executive Shayne Elliott says he is satisfied nobody employed by ANZ did anything wrong and the bank was not being investigated by the US Justice Department.
He says the bank has no relationship with 1MDB, or link to what is alleged to have happened.
This response is disingenious at best, for the issue was always , and remains, as reported above , ANZ and AMBanlk's  collusion in Najib's laundering of funds misappropriated from 1MDB:

TANORE FINANCE - Inside Story Of The "Saudi Royal Donation" - The FBI Files Continued

ANZ has since its acquisition of  an interest in AMBank   "significant management and operational influence" over AMBank (see See Page 29 of the ANZ announcement to the SEC),and has a special relationship with Najib over and beyond that of client.As PM and Minister for Finance ANZ had been in active negotiations with Najib to increase its stake in AMBank.





ANZ finds an unlikely ally at the top in 

Malaysia

by Sarah Thompson and Jamie Freed
From little things big things grow – until you hit a foreign ownership cap.
Some welcome news for ANZ Banking Group’s Asian strategy has emerged from Malaysia. The country’s Prime Minister, Najib Razak , has reportedly said he was open to allowing ANZ to increase its stake in Malaysian bank AmBank Group above the 30 per cent foreign ownership cap to 49 per cent.
Malaysia provides some of the highest returns on equity for banks anywhere in the world and ANZ has a toe hold with a 24 per cent stake in AmBank, the country’s fifth-largest lender.
ANZ has been looking at ways to either become bigger or get out of its minority holdings in Asian banks, and Najib’s comments provide a welcome sign that Asian countries may be looking to ease their rules to attract greater foreign investment.
Deutsche Bank yesterday said a greater stake in AmBank would be an attractive fit with ANZ’s Asian expansion strategy. Malaysia certainly ticks Asia chief Alex Thursby ’s boxes of growing fast while having lots of savings in its bank deposits. AmBank’s shares are also trading at an attractively low valuation at 1.8 times book value.

Buying another 25 per cent stake in the bank would cost ANZ about $1.5 billion assuming no takeover premium, Deutsche reckons. Given ANZ has about $3.5 billion in surplus capital this would not be a stretch.
Of course the downside is ANZ would still find itself as a minority shareholder in a bank, with no clear path to complete control.
The Australian Financial Review



Posted by at No comments:
Subscribe to: Posts (Atom)