Part of US$250m from tainted 1MDB funds used for film production: lawsuit

Among the movies produced was the controversial ‘The Wolf of Wall Street’.

Part of the US$250 million of funds misappropriated from 1MDB was utilised by Hollywood producer Riza Aziz Abdul Aziz and two others to finance movie productions, claimed a court filing.

This allegation was raised by 1MDB and three of its subsidiaries in a lawsuit against Riza Aziz, Hollywood film company Red Granite Pictures Incorporated and its related firm, Red Granite Capital Limited.

The legal action also named United States-based law firm Shearman & Sterling as the fourth defendant.

The suit is part of the 22 legal actions launched by 1MDB and its former subsidiary SRC International Sdn Bhd against various personalities and entities who allegedly defrauded them.

The two plaintiffs also took legal action against entities that may not have perpetrated the fraud but were involved in the process knowingly or unknowingly.

The present writ of summons is against Riza Aziz, stepson of former prime minister Najib Abdul Razak and the three other defendants with the plaintiffs being 1MDB and its subsidiaries 1MDB Energy Holdings Limited, 1MDB Energy Limited and 1MDB Energy (Langat) Limited.

The matter came up for case management before the Kuala Lumpur High Court today (June 8).

According to the cause papers, 1MDB claimed that in 2011 and 2012, Riza Aziz and the two Red Granite entities received approximately US$250 million in funds misappropriated by the plaintiffs’ own officers and their associates.

“The first to third defendants used those funds for their personal benefit and for the benefit of their associates including for the purposes of financing movie productions and purchasing various real estate,” 1MDB contended.

The plaintiffs also claimed that Shearn & Sterling had permitted Riza Aziz and 1MDB-linked fugitive Low Taek Jho (better known as Jho Low and whom 1MDB claimed was directly involved in the misappropriation) to use the law firm’s interest on lawyer accounts to launder a substantial portion of the misappropriated funds.

The plaintiffs also claimed that Shearn & Sterling had permitted Riza Aziz and 1MDB-linked fugitive Low Taek Jho (better known as Jho Low and whom 1MDB claimed was directly involved in the misappropriation) to use the law firm’s interest on lawyer accounts to launder a substantial portion of the misappropriated funds.

Three days ago, The New York Times reported the US government as having sold an apartment in the city that it had seized from Riza Aziz, the producer of the controversial hit film “The Wolf of Wall Street”, for US$16.8 million.

The sale, initiated in exchange for the US government dismissing money laundering charges against Riza Aziz, was listed as among the most expensive residential buildings in New York City and possibly the most profitable resale in the world.

Previously, online business news portal The Edge Markets reported that the 22 civil suits were filed in Malaysian courts earlier last month by three law firms, namely Rosli Dahlan Saravana Partnership, Skrine & Co and Lim Chee Wee Partnership.

The suits seek around US$23 billion (RM94.4 billion) from the various defendants.

Among those named as defendants include Najib, former 1MDB chairperson Che Lodin Wok Kamaruddin and former 1MDB chief executive officers Shahrol Azral Ibrahim Halmi, Mohd Hazem Abdul Rahman and Arul Kanda Kandasamy.

Several family members of Low were also named including his father and sister May Lin. His associates Eric Tan Kim Loong and Tarek Obaid, who is PetroSaudi International Ltd founder, were also named.

Some of the entities named were Deutsche Bank (Malaysia) Ltd as well as Swiss-based private bankers Coutts & Co Ltd and JP Morgan (Switzerland) Ltd.

The report, quoting a source familiar with the suits, said the criminal cases in the 1MDB scandal were proceeding too slowly and the civil suits were to demonstrate Prime Minister Muhyiddin Yassin’s seriousness on the issue.

On July 27 last year, Najib was sentenced to 12 years in prison and an RM210 million fine for abuse of power, criminal breach of trust and money laundering involving RM42 million from SRC.

He is appealing the SRC case and the matter is now before the Court of Appeal. His 1MDB-related charges are still being heard at the High Court.

Previously, Bernama reported that the Finance Ministry confirmed that 1MDB and SRC had filed a total of 22 civil suits to recover assets worth over RM96.6 billion including about RM300 million against various local parties.

In a statement, the ministry said the writs filed on May 7 comprised six by 1MDB and 16 by SRC.

Ex-film producer Riza Aziz

The writs filed by 1MDB are against nine entities including two foreign financial institutions and 25 individuals while those filed by SRC are against eight entities and 15 individuals for various wrongdoings.

The wrongdoings include breach of contractual, statutory, common law and fiduciary duties; breach of trust; fraud; conspiracy to defraud; fraudulent misrepresentation; fraudulent breach of duties and trust; abuse of power; breach of fiduciary duties in public office and dishonest assistance in misappropriation of funds.

“1MDB and SRC contend that these entities and/or individuals have been unjustly enriched by wrongfully receiving monies from 1MDB or SRC,” the ministry said.

According to Bernama, Finance Minister Tengku Zafrul Abdul Aziz said the government would not rest until all those involved were made fully accountable for the wrongdoings caused to the country through their involvement in 1MDB and/or SRC.

“Following significant and successful settlements with Goldman Sachs, AmBank Group and Deloitte PLT, the government’s recovery efforts are now focused on pursuing other wrongdoers who have caused losses to 1MDB and/or SRC during the execution of their duties as parties directly or indirectly involved in 1MDB and/or SRC’s various operations and transactions,” he added.

The government had earlier received RM10.5 billion from Goldman Sachs in August 2020 with a further asset recovery guarantee of RM5.88 billion.

The government also recently received RM336 million from Deloitte PLT and is later set to receive another RM2.83 billion from the AmBank Group as part of global reparations involving 1MDB.

By : HIDIR REDUAN ABDUL RASHID – MALAYSIAKINI

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