Gambling, the recipe for a nation’s failed SWF

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 The disgraced and shameless former prime minister Najib “1MDB” Razak who helmed the SWF. - Facebook image.

Gambling, the recipe for a nation’s failed SWF

KUALA LUMPUR, Oct 17, 2024: Why is 1Malaysia Development Berhad (1MDB) a failed Sovereign Wealth Fund?

Allowing a SWF to use its funds for gamling is definiotely a recipe for financial disaster or failure!

No News Is Bad News reproduces below a news report on a 1MDB court proceeding:

Malaysia

1MDB funds spent on gambling, real estate and making movies, court told

In their opening statement of 1MDB’s civil suit against Riza, the sovereign wealth fund and three of its subsidiaries said the defendants had knowingly received funds misappropriated from 1MDB. 

Updated 1 hour ago · Published on 17 Oct 2024 4:47PM

The statement, which was filed in the High Court yesterday, was made available to the press today.- October 17, 2024

A TOTAL US$248 million in siphoned 1MDB funds were spent on gambling, real estate, movie memorabilia, and to fund Riza Aziz's company Red Granite Pictures and its motion picture productions, claimed counsels acting for 1Malaysia Development Berhad (1MDB). 

They claimed the money was siphoned out through two companies linked to fugitive businessman Low Taek Jho or Jho Low, and sent to Datuk Seri Najib Abdul Razak’s stepson.

In their opening statement of 1MDB’s civil suit against Riza, the sovereign wealth fund and three of its subsidiaries said the defendants had knowingly received funds misappropriated from 1MDB. 

The statement, which was filed in the High Court yesterday, was made available to the press today.

Malaysian and US investigators estimate a total of US$4.5 billion was siphoned from 1MDB following its inception in 2009, implicating many people, including Najib, Low, Goldman Sachs personnel and high-level officials elsewhere.

Besides 1MDB, the other plaintiffs are 1MDB Energy Holdings Limited, 1MDB Energy Limited, and 1MDB Energy (Langat) Limited.

In the statement, 1MDB claims that the misappropriation of its funds had been made without the knowledge or approval of the board of 1MDB, and did not benefit the company in any way. 1MDB said Riza Aziz took a conscious decision not to make inquiries, despite having sufficient basis to be suspicious about the transfers of misappropriated funds he received from Jho Low through his companies.

“Alternatively, Riza Aziz recklessly and consciously and willfully failed and refrained from making such inquiries as an honest and reasonable person would have made,” it said.

1MDB is seeking for Riza and the two Red Granite companies to pay the US$248 million back to the strategic development company. 

1MDB, along with 1MDB Energy Ltd, 1MDB Energy Holdings Ltd, and 1MDB Energy (Langat) Ltd, filed the suit in May 2021.

They said that the first tranche of payment of more than US$10.173 million made to Riza was from Good Star Ltd, a company controlled by Jho Low, while the US$238 million that Red Granite Capital received was actually from bonds raised by 1MDB for the purchase of several power plants.

In his defence, Riza claimed that the money was received from a loan from Saudi royalty or the International Petroleum Investment Company (IPIC) and not from 1MDB.

The defendant claimed that it was hard for an unknown film producer to obtain loans from commercial banks and that had compelled him to seek funding from individuals or companies.

The plaintiffs are therefore seeking a declaration that Riza as well as the Red Granite companies are liable to account for the funds misappropriated from 1MDB.

Alternatively, the plaintiffs are seeking a repayment of the funds misappropriated from it based on unjust enrichment. - October 17, 2024