Two executives linked to 1MDB scandal jailed in Abu Dhabi: WSJ

The two men are linked to the 1MDB scandal, but the convictions were reportedly not related to the 1MDB case.
The two men are linked to the 1MDB scandal, but the convictions were reportedly not related to the 1MDB case.PHOTO: ST FILE

DUBAI (BLOOMBERG) - Two executives linked to a Malaysia wealth fund scandal were convicted of financial crimes and sentenced to prison in Abu Dhabi, the Wall Street Journal reported, citing people familiar with the matter.

Khadem Al Qubaisi, who once headed Abu Dhabi's International Petroleum Investment Co (IPIC), was handed a 15-year prison sentence, and Mohammed Badawy Al Husseiny, a United States citizen who formerly ran Aabar Investments, a subsidiary of IPIC, was sentenced to 10 years, according to the report.

They jointly must pay about US$336 million (S$460 million), the WSJ reported, citing a statement from the emirate's court.

The court statement didn't identify the men by name, but people familiar with the judicial actions told the Journal that the unidentified defendants were Al Qubaisi and Al Husseiny.

It also cited people familiar as saying the convictions weren't related to the Malaysian fund scandal.

Lawyers for both men and a representative of the Abu Dhabi Criminal Court declined to comment on the charges, the Journal reported.

1Malaysia Development Bhd (1MDB), set up by former prime minister Najib Razak to attract foreign investment, accumulated billions of dollars of debt after its 2009 inception and is at the centre of multiple investigations in relation to alleged corruption and money laundering.

IPIC and Aabar last year alleged in a court filing that Goldman Sachs Group paid bribes to former fund officials, who in exchange "agreed to manipulate and mislead IPIC and Aabar, and to misuse the companies' names, networks, and infrastructures to further the criminal schemes and to personally benefit".

In Malaysia, Najib is facing seven charges tied to criminal breach of trust, money laundering and abuse of power involving SRC International, a former subsidiary of 1MDB, over how RM42 million (S$13.8 million) of its funds were transferred into his private bank accounts.

He is also facing other charges in Malaysia over the 1MDB scandal.