1MDB-linked legal action against Petrosaudi postponed to Nov 23

The prosecution is seeking to get further instructions on the need to amend their 1MDB-linked legal action against Petrosaudi International Limited (PSI) and four others over US$340 million (RM1.5 billion) of 1MDB funds.

As a result, the Kuala Lumpur High Court this afternoon adjourned the hearing of the prohibitory order bid to Nov 23.

During proceedings earlier today, deputy public prosecutor Norinna Bahadun raised the possibility of the application to amend in order “to prevent possible confusion” in the legal bid involving 1MDB funds allegedly held in an escrow account managed by United Kingdom-based law firm Clyde & Co LLP.

She proposed this after judge Ahmad Shahrir Mohd Salleh indicated that the main cause papers were too vague.

He pointed out that the legal action’s documentation only indicated it was based on Section 53 of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLATFPUA).

The judge asked the prosecution whether the legal action falls under Section 53(1)(a) of 53(1)(c) of the Act.

Section 53 deals with the application for the prohibition of dealing with property outside Malaysia.

Subheading 1(a) is in relation to where the property is the subject matter or evidence relating to the commission of an offence under Section 4(1) or a terrorism financing offence.

Subheading 1(c) deals with the situation where the property is the proceeds of an unlawful activity.

Section 4(1) of AMLATFPUA is in relation to the offence of money laundering, which is punishable with a maximum penalty of 15 years in jail, fine of not less than five times the value of the proceeds of unlawful activity or RM5 million, whichever is higher.

When Shahrir asked the respondents’ legal team, counsel Mohd Yusof Zainal Abiden said they would leave it to the court over the matter.

The court then adjourned the hearing and for it to resume on Nov 23.

Yusof was representing Saudi national Tarek Obaid, who is one of the five respondents and also the director of PSI.

Another three respondents, namely PSI, Petrosaudi Oil Services (Venezuela) Limited (Incorporated in Barbados) also known as PSOSL, and UK-based Temple Fiduciary Services Limited, are represented by counsel Alex Tan. Clyde & Co was unrepresented.

Money laundering scheme

Through the prohibition application, the prosecution contended that the US$340 million was part of a money laundering scheme that funnelled millions of US dollars out of the Malaysian wealth sovereign fund beginning 2009.

Previously, the prosecution claimed that the money laundering began when US$700 million of US$1 billion meant for a joint venture between 1MDB and PSI had ended up instead in the account of Seychelles-incorporated Good Star Limited.

Good Star is alleged to be linked to fugitive businessperson Low Taek Jho (Jho Low), whom the prosecution contended had arranged the embezzlement of funds out of 1MDB with the authority of former prime minister Najib Abdul Razak.

These contentions were raised by the prosecution during the separate, ongoing criminal corruption trial against Najib involving RM2.28 billion of funds from 1MDB.

In the present legal action filed on July 14, 2020, the Malaysian government claimed that the amount totalling US$340,258,246,87 at Clyde & Co, was derived from money laundering of funds rightfully belonging to 1MDB.

According to the US Department of Justice, the joint venture was alleged to have been a front to siphon off 1MDB funds.

Najib is serving a 12-year jail sentence following the apex court on Aug 23 upholding his conviction and custodial sentence as well as an RM210 million fine in the separate RM42 million SRC International corruption case.

Initially a subsidiary of 1MDB, SRC was later fully transferred to the Minister of Finance Incorporated (MOF Inc).

Najib also used to be finance minister, adviser emeritus of SRC and chairperson of 1MDB’s board of advisers.

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