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PetroSaudi refuses to comment on Good Star ownership

Published
Modified 23 Apr 2016, 6:37 am

PetroSaudi International, the firm which partnered with 1Malaysia Development Berhad (1MDB) in a now defunct investment joint venture, has refused to comment if it owned Good Star Limited, which was the recipient of some US$700 million from the Malaysian government investment arm in 2009.

The US$700 million was part of 1MDB's US$1.83 billion investment in the PetroSaudi joint venture. Another US$330 million was reportedly paid, also to Good Star, two years later in 2011.

The Weekend Australian reported that, in an emailed response to questions from the newspaper, PetroSaudi lawyers have refused to say whether the company owned Good Star.

This, despite previous assurances by both 1MDB and PetroSaudi management that the Saudi firm is the owner of Good Star.

PetroSaudi was once part-owned by Prince Turki Abdullah Al Saud, apparently the seventh son of the late Saudi King Abdullah Abdulaziz Al Saud.

The firm also seemed to be distancing itself from involvement in the alleged misappropriation of billions from 1MDB, which is now the subject of at least five separate international investigations.

In its response to the Australian paper, PetroSaudi argued that it had no involvement in the alleged misappropriation of funds from 1MDB, and “all funds invested by 1MDB and associated transfers were made with the approval of the 1MDB board”.

The firm also insisted that 1MDB’s 2009 investment in the joint venture sparked great concern among the fund’s board and the eventual resignation of one of its directors.

Quoting online site Sarawak Report , The Weekend Australian noted that Good Star is ­controlled by Malaysian financier Jho Low, a family friend of Prime Minister Najib Abdul Razak, who helped set up the PetroSaudi-1MDB joint venture.

Najib and 1MDB however have repeatedly denied any involvement by Jho Low in 1MDB and its affairs.

Paragraphs on Good Star deleted

Just this week, Public Accounts Committee (PAC) chairperson Hasan Arifin admitted that he had unilaterally removed portions of the committee's final report – which noted that PetroSaudi does not own Good Star - because it was “unclear”.

The PAC report also revealed that the 1MDB board had first demanded the return of the US$700 million it said went to Good Star without its consent, but to no avail as the management did not listen to the board.

The board's call for an independent evaluation of PetroSaudi Cayman’s claimed US$2.7 billion worth of assets was also scuttled, this time reportedly overruled by Najib himself, who is chairperson of 1MDB's advisory board and through whom all approvals for major actions, transactions and investments must go through.

Bank Negara which investigated the deal had recommended charges be laid against 1MDB management but was rejected by the attorney-general twice.

The central bank announced last October it was retrospectively cancelling approvals for 1MDB to transfer US$1.83 billion overseas because it had been given “inaccurate information”, and ordered 1MDB to repatriate the funds, which the state-owned investment arm has yet to comply with.

This comes as former prime minister Mahathir Mohamad intensified his call for foreign pressure to be applied to Najib over the 1MDB scandal and asking foreign investigation agencies to make public their findings, to name and shame and force action at least, even if the long arm of the law may have been stymied or restricted.

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