US denies role in transfer of Jho Low's 1MDB-linked Equanimity yacht to Malaysia

The “Equanimity” arrived at a port in the outskirts of Kuala Lumpur on Aug 7, 2018.
The “Equanimity” arrived at a port in the outskirts of Kuala Lumpur on Aug 7, 2018. PHOTO: EPA-EFE

KUALA LUMPUR - The United States Department of Justice (DOJ) has refuted claims that it was involved in Indonesia’s handover of the luxury yacht Equanimity to the Malaysian government earlier this month, raising doubts over plans by Prime Minister Mahathir Mohamad’s administration to sell the vessel linked to the 1Malaysia Development Bhd (1MDB) money-laundering scandal.

In a filing to the Central District Court of California on Friday (Aug 17), the DOJ stated that “the US government took no part in Indonesia’s transferring the yacht”, contradicting earlier claims by Malaysia’s Attorney General’s Chambers that the seizure of the US$250 million (S$343 million) superyacht was carried out after sensitive and delicate negotiations with Washington.

The DOJ court filing, however, made no mention whether Malaysia’s seizure of the 92m vessel had contravened US law.

Malaysian lawyers tracking developments surrounding the Equanimity said that the DOJ response is likely to raise fresh questions over the ownership of the vessel and is likely to complicate Malaysia’s plans to sell the yacht, which is believed to be owned by businessman Low Taek Jho who the US and Malaysian authorities say played a central role in the 1MDB debacle.

Responding to the DOJ filing, Tun Dr Mahathir told news site Malaysiakini on Saturday that the US authorities had not objected to the transfer despite knowing about it beforehand. “As far as we know, they have not protested (against) our taking over the boat. We told (them) that before,” he was quoted as saying.

A spokesman for Mr Low, through his attorney, issued a statement on Friday claiming that the seizure was “without US knowledge or consent, and in violation of both a US court order and a decision of the Indonesian court.”

The statement added that the DOJ filing had clearly stated that the US had planned to bring the vessel to the US after spending considerable sums of money on the crew, and fuel and the upkeep of the vessel. 

“Then Mahathir stole it right from under them, and flat-out lied about it,” the statement said, adding that it would be impossible to sell the asset for a fair value because of the unsettled question over ownership and the legal repercussions that might be faced by a new owner.

Tun Dr Mahathir had said a week ago that the US authorities had confirmed the vessel belonged to Mr Low and was bought with funds stolen from 1MDB.

“They have documents on this and said if we wanted to keep it, we are entitled to it because it was bought with our stolen money,” he said, as quoted in media reports.

 
 
 

The Equanimity has become a major political trophy for the Dr Mahathir-led Pakatan Harapan administration, which came into power after beating the long-ruling Barisan Nasional (BN) coalition government in the May 9 general election. 

Malaysia’s takeover of the vessel on Aug 6 has come to symbolise the new government’s determination investigate the 1MDB debacle that turned public sentiment against former premier Najib Razak and the BN coalition government in the last election.

Lawyers for 1MDB have obtained a warrant of arrest against the ship from the Admiralty court in Kuala Lumpur.

The vessel is the single largest asset in the list of over US$1 billion in luxury items the DOJ alleges were acquired with funds siphoned from 1MDB. The DOJ has filed several civil suits since mid-2016 which claim that over US$4.5 billion was misappropriated from the state fund in money-laundering schemes worldwide. 

Malaysia’s government is also keen to secure control of a private jet owned by Mr Low, which is currently grounded at Singapore’s Seletar Aerospace Park. 

The yacht was first seized in late February in Bali by the Indonesian police on behalf of US regulatory authorities, prompting its official owner, Equanimity Cayman Ltd, to challenge the seizure which was later ruled to be illegal.

The DOJ contested the claim in a Los Angeles court and secured an order that Equanimity Cayman would have to hand control of yacht to the US agency pending the sale of the contested asset. All monies from the sale would be then deposited in an escrow account until the outcome of all civil cases in the US.

According to DOJ’s Friday filing in the California District Court, the US government had in July made preparations to sail the yacht to the US and had received official certification to temporarily dock the yacht in Guam.

Those plans were disrupted on Aug 2 when a 13-member Indonesia police team and three Malaysian officials seized the yacht in Bali and commandeered Equanimity to Batam island where it was handed over to the Malaysian authorities four days later.

At the time of the seizure, the Equanimity was already under the control of the DOJ, which had earlier replaced the previous crew with a specially appointed team from international yacht management company, Wilson Yacht Management (WYM).

The DOJ filing noted that the US government’s only action with regard to the Equanimity’s handover to Malaysia was to advise WYM to obey the directives of the Indonesian government, and to maintain its contract with WYM until Aug 7, to ensure the vessel was never un-crewed or unattended.

Malaysia is not listed as a claimant in the US court proceedings with regard to the Equanimity. The US government had on Aug 6 requested that the proceedings be suspended to allow the parties to find out Malaysia’s intentions with respect to the yacht.