Ten observations on DOJ’s June 2017 1MDB-related civil suit

By MT Webmaster On Jun 16, 2017

LSS Report

Here are my thoughts on the latest civil suit based on that 250 pages court submission from the USA’s Department of Justice submission:

1. It is still a civil suit for forfeiture of assets and not a criminal suit.

Nothing has changed since last year except that more assets are listed. It is also important to note that civil asset forfeiture lawsuits are filed against the assets themselves and not individuals (such as Jhow Low etc). Owners of the assets can contest the forfeiture, which they are doing.

2. It is essentially a continuation of the previous suit in July 2016.

Nothing has changed since last year except that more assets are listed. However, the one that caught the public’s interest is the allegation of a USD27 million (RM118 million) diamond gifted to MO1’s wife – which everyone knows it refers to Datin Sri Rosmah, the Prime Minister’s wife. We shall go into detail on this later.

1MDB did not borrow or lose any more money since last year July 2016. In fact, 1MDB actually made significant progress in making money and paying off debts over the last year.

3. None of the money allegedly spent or invest legally belongs to 1MDB.

This means that those money spent is not 1MDB’s money. I had proven this extensively last year in this post. Events since my post one year ago had further confirmed this – especially the IPIC-1MDB settlement in April this year where IPIC was reported to have arranged a buyer for the USD2.5 billion worth of units while agreeing to the following: “The parties have also agreed to enter into good faith discussions in relation to payments made by 1MDB Group to certain entities.”

This is also the reason why 1MDB keeps insisting that none of their money has been lost.

4. DOJ’s allegations that the BSI or Cayman units were over-valued or wrongly-valued are irrelevant to 1MDB

As previously explained, the value of the units are guaranteed by the real Aabar Investments PJS. As far as 1MDB is concerned, the minimum value of the units is what Aabar had guaranteed it for. As was reported by the Singapore press, Aabar had arranged a buyer for the USD2.5 billion units (which includes the USD940 million units remaining in the BSI funds) and that 1MDB had already started to receive the cash proceeds.

In 1MDB’s point of view, they had a certain money in the BSI units guaranteed by the real Aabar. Since the real Aabar had now gotten someone to buy the fund units and pay 1MDB the correct amount then there is no question of whether the fund units are worthless or undervalued or overvalued.

5. DOJ’s allegations that money was siphoned off from 1MDB’s Deutsche Bank loan has nothing to do with 1MDB

DOJ reports that the Deutsche Bank loan was to pay for the cancellation of options held by Aabar in return for IPIC guaranteeing 1MDB’s USD3.5 billion loan in the year 2012.

According to the DOJ, the money was paid to a “fake” Aabar Seychelles which they claim had nothing to do with the real Aabar in Abu Dhabi.

However, DOJ also confirms that the sole director of Aabar Seychelles was the Managing Director of the real Aabar and that the shareholder of Aabar Seychelles listed in the certificate of incumbency (also known as the company registration) document is the real Aabar.

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1MDB DOJ