1Malaysia Development Bhd (1MDB) was "complicit" in a "fraudulent" asset injection claim by PetroSaudi Ltd in its joint venture with 1MDB back in 2009, DAP's Petaling Jaya Utara MP Tony Pua claimed today.

 

Pua said this was because 1MDB was aware that PetroSaudi did not own legal and beneficial rights worth US$1.5 billion (RM5.44 billion) in assets for an oilfield in the Caspian Sea, and hence had breached the joint venture agreement with 1MDB.

 

The exploration rights of the oilfield belonged to a Canadian energy company, Buried Hill, which had an agreement with the Turkmenistan government to explore it, said Pua.

 

Buried Hill and PetroSaudi International, PetroSaudi's parent company, entered into a farm-in agreement for the oilfield, which was hastily valued at US$2.7 billion (RM9.8 billion) before PetroSaudi and 1MDB entered into the joint venture.

 

But merely months after the joint venture was signed, the 1MDB-PetroSaudi joint venture terminated the farm-in agreement with Buried Hill, meaning PetroSaudi no longer had the assets it claimed to have injected into the joint venture, and 1MDB was aware of this matter, said Pua.

Ownership of oilfield still under dispute

 

Pua also pointed out that the oilfield could not have been explored anyway as Turkmenistan and Azerbaijan are still disputing ownership over the particular area in the Caspian Sea.

"The whole asset injection (by PetroSaudi) was fraudulent. And 1MDB was complicit in this joint venture fraud," Pua said at a press conference today.

He also said that the eventual conversion of the 1MDB equity in the JV into Murabaha notes was a "cover up" to sweep the entire joint venture breach under the carpet.

"If 1MDB had indeed profited US$488 million from the venture, show us the money. Where is the money?" Pua asked.

Meanwhile, Segambut MP Lim Lip Eng gave all enforcement agencies and authorities 24 hours to commence investigations into the matter, and threatened to make a police report if there was no progress.