Malaysia to sell 1MDB-linked superyacht to casino operator Genting for $170 million

The plan was to dispose of Equanimity for no less than US$130 million, which is already about half its original cost, by March 31, but the government had yet to secure a buyer by then.
The plan was to dispose of Equanimity for no less than US$130 million, which is already about half its original cost, by March 31, but the government had yet to secure a buyer by then.PHOTO: REUTERS

KUALA LUMPUR - The yacht allegedly bought with money stolen from state investment fund 1Malaysia Development Berhad (1MDB) and once used by fugitive Malaysian businessman Jho Low to host lavish parties will be sold to casino operator Genting Malaysia Bhd for US$126 million (S$171 million). 

In a statement announcing the sale on Wednesday (April 3), Malaysia's Attorney-General Tommy Thomas said the Admiralty Court in Kuala Lumpur had approved the offer by Genting to purchase the vessel, Equanimity.

“The Government of Malaysia is pleased to announce that the Superyacht Equanimity is to be sold to Genting Malaysia Bhd or its special purpose vehicle (SPV) company at the price of US$126 million,” Mr Thomas said in a statement.

"This will rank as the highest recovery to date for the Government of Malaysia from the 1MDB scandal; within a mere eight months from the commencement of this action."

In an announcement on Bursa Malaysia's website, Genting said the acquisition will provide the company “a unique and competitive edge for its premium customers business”. The purchase will not affect its 2019 earnings.

Equanimity was seized off the coast of Bali by Indonesia in Feb­ruary last year at the request of US authorities as part of a multi-billion-dollar corruption investigation into the 1MDB scandal.

The luxury vessel is among assets allegedly bought by Low, also known as Low Taek Jho, and his associates with money taken from the fund, United States and Malaysian officials have said.

Low allegedly paid US$250 million for the yacht, which has an interior clad in marble and gold leaf, a spa and sauna, a 20m swimming pool, a movie theatre and helipad.

The Indonesian government handed over the vessel to Malaysia in August, but the Malaysian government had struggled to find buyers for the 91-metre ship after an earlier auction failed. 

 
 
 

The government has so far spent RM14.5 million (S$4.8 million) to maintain Equanimity, which is currently docked at the Royal Malaysian Navy's Region 3 headquarters in Langkawi, Malaysian media has said.

Mr Thomas said Genting will pay the US$126 million purchase price by the end of April. The price was the best offer received since the superyacht was put on sale in October last year.

"Many offers were received in this period, and a few were over US$100 million. It was Genting however, that offered the highest price, that was today approved by Court for acceptance," Mr Thomas said.

"As the Genting offer was negotiated directly with the Government of Malaysia, no agency commission is payable; resulting in savings of about US$4.4 million," he said.

Although the vessel was sold slightly below the listed price, Mr Thomas said the net returns to the Government of Malaysia is "as good if not more, than envisaged".

Malaysia had originally wanted to sell the yacht for no less than US$130 million.

Mr Thomas said a further statement will be issued once the purchase price is received, with a breakdown of the expenses incurred, and the net amount to be credited into a newly-opened 1MDB asset recovery account.

In a statement commenting on the sale, a spokesman for Low said they are prompted to speak even though the vessel is owned by Equanimity (Cayman) Ltd, as Low is "inevitably drawn into the media coverage over the yacht’s mishandling by the Malaysian Government".

"Let us be clear, had the Mahathir Government not illegally seized the Equanimity from Indonesia and docked it in a hazardous environment at Port Klang, the vessel would have maintained its value and avoided a fire sale," said the spokesman in the statement issued through lawyers.

"It took the Mahathir Government twice as long as they promised to sell the yacht, the auction flopped and the ‘transparent’ sales process the Mahathir Government committed to at the outset has been subject to multiple abrupt changes – largely forced on the Government through their own incompetence." 

Low, who has also denied any wrongdoing, remains at large. He faces charges in Malaysia including money laundering. 

Meanwhile on Wednesday, former Malaysian Prime Minister Najib Razak attended his first day of trial to face seven of 42 charges, ranging from abuse of power to money-laundering, linked to his role in the 1MDB corruption scandal. He has pleaded not guilty to all the allegations. 

Genting Malaysia is part of a global conglomerate that operate casinos, resorts and cruise lines in countries from the United States to Australia, as well property and palm oil plantations. The group runs Resorts World Sentosa in Singapore and the luxury Star Cruises line in Hong Kong.