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'Wolf of Wall Street' future profits ring-fenced pending DOJ lawsuits

Published:  |  Modified:

All future profits earned by production firm Red Granite from the blockbuster hit 'The Wolf of Wall Street' will be kept separate pending the outcome of the US Department of Justice's lawsuits to seize more than US$1 billion 1MDB-linked assets.

The deal between the Hollywood production firm owned by Prime Minister Najib Abdul Razak's stepson Riza Aziz, and the DOJ was disclosed in a court filing, The Wall Street Journal (WSJ) reported.

Red Granite also agreed to ring-fence future profits from its 2012 film 'Friends with Kids', although the DOJ did not file a seizure suit against it.

The DOJ also withdrew a proposed restraining order against the rights to 'The Wolf of Wall Street', US entertainment website Variety reported.

"Instead, the stipulation maintains existing collection account management agreements, thereby allowing proceeds from the films to continue to flow to DiCaprio, Scorsese, Fox, the actors’ and directors’ guilds, and to Red Granite’s lenders," it reported.

The DOJ last month filed lawsuits to seize the assets, including future proceeds from the film 'The Wolf of Wall Street' which it alleged was funded by money siphoned from 1MDB.

It is unclear how much the ring-fenced future income will be.

WSJ notes the amount might be a relatively small millions of US dollars from proceeds from sales to television networks and video-on demand companies like Netflix.

The film, released in December 2013, grossed US$400 million at the box office, but not all the proceeds went to Red Granite, the US daily reported.

This shows the firm "remains open for business, and that everyone involved with Red Granite can confidently continue to do business with us in the wake of the civil lawsuit filed by the government last month”, Red Granite said in a statement to WSJ.

Red Granite earlier said it believes its sources of funding are legitimate.

In its lawsuits last month, the DOJ said Red Granite received US$64 million from British Virgin Island registered firm Aabar, which went into the production of 'The Wolf of Wall Street'.

1MDB transferred US$3.5 billion to Aabar BVI, which shares an almost identical name as a subsidiary of the International Petroleum Investment Corporation (IPIC).

1MDB said that it transferred the funds to Aabar BVI after being told by then IPIC managing director Khadem al Qubaisi and Aabar chairperson Mohamed Al Husseiny that the BVI firm is an IPIC subsidiary.

However, IPIC in a filing with the London bourse said Aabar BVI is not its subsidiary.

Al Qubaisi and al Husseiny were named in the DOJ lawsuits, alongside Riza and businessman Jho Low.

"The funds sent from Aabar-BVI to Red Granite Capital, which were thereafter transferred into the United States for use by Red Granite Pictures, did not represent a legitimate investment by 1MDB, IPIC, or Aabar in Red Granite Pictures.

"And balance sheets for Red Granite Pictures and Red Granite Capital show no payments to 1MDB, IPIC or Aabar indicative of any investment return," the DOJ said in the lawsuits filed last month.

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