Pleasant surprise for Malaysia's 1MDB asset recovery campaign - superluxury yacht Topaz

The DOJ has so far helped Malaysia recover more than US$1 billion in assets related to the alleged embezzlement at 1MDB.
The DOJ has so far helped Malaysia recover more than US$1 billion in assets related to the alleged embezzlement at 1MDB.PHOTO: AFP

KUALA LUMPUR - In a stunning, but little-noticed, disclosure last week, the US Department of Justice (DOJ) stated that the superyacht, Topaz, estimated to be valued at US$688 million (S$956 million) and ranked as the seventh-largest in the world, was purchased in part with funds that were traceable to the 1MDB bribery and money-laundering scandal.

The financing details of the luxury motor yacht - that has since been renamed The A+ - were contained in a DOJ filing on June 30 to a federal court in California.

The DOJ is seeking a ruling to allow it to seize assets, including two Warhol paintings, a Basquiat drawing, an apartment in Paris and millions of dollars held in Swiss bank accounts, all of which were purchased with monies embezzled from 1MDB.

The documents in the California court filing did not state whether the DOJ would be seeking to stake its claim on the luxury superyacht as part of its ongoing 1MDB asset forfeiture campaign.

It is also not clear whether Malaysia would consider lodging a claim for the asset. Government officials in Kuala Lumpur could not be reached for comment

The latest filing joins an already long list of seized assets that were purchased with 1MDB funds by the alleged mastermind of the fraud, Malaysian financier Low Taek Jho. Items already seized include Low's superyacht, Equanimity, millions of dollars in jewellery and paintings by Van Goh and Monet.

Low chartered The A+ on at least five occasions between 2013 and 2014, at various locations including Nice in France, Ibiza in Spain, the Caribbean, New York and around the vicinity of the Brazilian coast, the DOJ filing stated.

The DOJ has so far helped Malaysia recover more than US$1 billion in assets related to the alleged embezzlement at 1MDB and its latest filing could prove beneficial for Malaysia's own 1MDB asset recovery campaign and its ongoing legal battle with Abu Dhabi in the London courts.

Kuala Lumpur is seeking the recovery of US$3.5 billion that it maintains was misappropriated and diverted to allegedly sham subsidiaries in an elaborate conspiracy involving top level executives at the Emirate's state-owned International Petroleum Investment Company, (IPIC).

Both governments have tried to reach an out of court settlement to the legal dispute but talks have so far failed because Abu Dhabi has repeatedly maintained that the alleged embezzlement of 1MDB monies were carried out by rogue officials of IPIC who are now serving long jail sentences.

Last week's disclosure by the DOJ in a 280-page filing could tip the scales in Malaysia's favour because the revelations over the funding of the Topaz purchase now formally links the 1MDB affair to a top United Arab Emirates official.

 
 
 
 

The June 30 DOJ filing said a private concern, Oceanus Maritime Ltd, took possession of the A+ in August 2012, paying US$688 million for it .

"Upon information and belief, Oceanus Maritime is beneficially owned by Emirati Official 1, a UAE public official in a senior leadership role in IPIC," the filing stated without identifying the individual.

Several other websites and publications specialising in the coverage of super luxury vessels have identified the yacht owner as Sheikh Mansour bin Zayed Al Nayan, an Emirati politician who is the deputy prime minister of the United Arab Emirates and a member of the royal family of Abu Dhabi.

During the time of IPIC's dealing with 1MDB, Sheikh Mansour, who is also the owner of the Manchester City football club in the United Kingdom, was the chairman of IPIC and the two rogue executives now serving long jail terms in Abu Dhabi were widely considered to be his key corporate lieutenants.

The DOJ filing stated that "Oceanus Maritime funded the purchase in large part through a 400 million euro loan from Deutsche Bank". The private concern then proceeded to pay back that loan in tranches through money that was misappropriated from 1MDB obtained in another elaborate scheme led by the two former IPIC executives, Khadem Al Qubaisi and Badawy al Husseiny.

In end-May and end-November 2012, four wires totalling US$472.75 million that had earlier been misappropriated from 1MDB were transferred to an account in Bank Rothschild in Luxembourg maintained in the name of Vasco Investment Services. The four transfers, according to the DOJ, passed through Standard Chartered Bank in the US.

From the Vasco account, funds were then transferred to another account named Tasameem Investments at the same Rothschild Bank before they were transferred to partly pay for the Deutsche Bank loan taken by Oceanus Maritime for the purchase of The A+, the DOJ filing stated.