NZ court lets Jho Low family change trustees

The family of Malaysian businessman Jho Low (above) claims the Swiss trustees holding its assets are afraid to fight back against the US for fear of being prosecuted.
The family of Malaysian businessman Jho Low (above) claims the Swiss trustees holding its assets are afraid to fight back against the US for fear of being prosecuted.

Decision keeps alive bid to stop US seizing assets allegedly linked to 1MDB scandal

WELLINGTON • A New Zealand court has ruled that Malaysian financier Low Taek Jho's family can change trustees holding their assets, keeping alive a fight to stop the United States from seizing US$650 million (S$927 million) in real estate and business investments allegedly acquired with stolen funds.

The family of the businessman known as Jho Low claims the Swiss trustees holding its assets are afraid to fight back against the US for fear of being prosecuted in a global game of investment hide-and-seek set off by the alleged disappearance of more than US$3.5 billion of the US$8 billion raised by Malaysian state fund 1Malaysia Development Berhad (1MDB).

Swiss investigators have said that some US$4 billion of 1MDB funds may have been misappropriated.

The US Department of Justice said last July that some of the funds was used to buy penthouses and luxury houses in the US and London, a Bombardier jet and artworks, and to finance the movie The Wolf Of Wall Street, among other things.

It said it is trying to recover some US$1 billion of these assets through civil lawsuits, by seizing them from three people, including Mr Low and Malaysian Prime Minister Najib Razak's stepson Riza Aziz. The third person named is a former United Arab Emirates government official.

New Zealand's High Court in Auckland yesterday agreed that the family can replace Swiss trustees Rothschild with Cayman Islands-based FFP Limited.

The Swiss trustees did not oppose the replacement.

Mr Low's family lawyer Michael Kyriak declined to comment.

"I am satisfied that the replacement of the current trustees with trustees who are willing to ensure that proper legal steps are taken in the California proceedings is not only expedient but necessary to safeguard the trust assets" and "protect the interests of the beneficiaries", Justice Kit Toogood said in his ruling.

He added that the New Zealand case "does not concern the merits of the allegations made by the US government".

The Low assets at issue include a US$380 million stake in New York's Park Lane Hotel, a US$107 million interest in EMI Music Publishing, a US$35 million Bombardier jet and a US$30 million penthouse at Time Warner Centre in New York.

Mr Low, who is known for partying with Hollywood celebrities like Lindsay Lohan and Paris Hilton, is also friends with Mr Riza and a producer of The Wolf Of Wall Street, which the US alleges was also funded with stolen money.

Mr Low has said he provided consulting to 1MDB that did not break any laws, while the fund and Datuk Seri Najib have both denied wrongdoing.

New Zealand has long been identified as offering a trust regime popular with the offshore wealth management business because its foreign trusts are secretive and not subject to tax.

New Zealand said in July last year it will introduce a registry of foreign trusts that tax and law enforcement agencies could use to investigate suspected money laundering and tax evasion.

BLOOMBERG, REUTERS

A version of this article appeared in the print edition of The Straits Times on January 21, 2017, with the headline 'NZ court lets Jho Low family change trustees'. Print Edition | Subscribe