TORONTO (BLOOMBERG) - A Malaysian governor and his family are accused in a lawsuit of funnelling proceeds of corruption into Canadian real estate, with a Swiss environmental group pressing some of Canada's biggest financial firms to turn over information on how the money flowed.
Sarawak governor Abdul Taib Mahmud's family used the money to fund the expansion of the Ottawa-based real estate company Sakto Group's C$250 million ($259.06 million) real estate empire, according to a lawsuit unsealed this week by an Ontario judge and provided to Bloomberg by the non-profit and its law firm.
"If the plaintiffs' evidence is correct, there may be very significant criminal misconduct being committed here in aid of corrupt foreign official(s)," Justice Frederick Myers said in ordering that the court documents be made public.
Bruno-Manser-Fonds, a Swiss nonprofit that works to conserve tropical rainforests, sued Royal Bank of Canada, Toronto-Dominion Bank, Manulife Financial Corp and Deloitte & Touche for information about the flow of money into Sakto, using the corruption allegations against Mr Abdul Taib and his family to support its claim.
The group is seeking the information to gauge whether there are grounds for a criminal case against the real estate group.
Sakto rejected the allegations, calling the group's lawsuit a fishing expedition with insufficient evidence to support a legitimate complaint.
"This covert legal manoeuvre is another example of a media stunt by these activists funded by unknown foreign entities," Sakto said in an e-mailed statement Tuesday. "BMF routinely employs the tactic of filing complaints to generate news on which it can self-report online."
Corruption in Malaysia is under global scrutiny, with the US investigating the theft of money from a Malaysian state investment fund that was allegedly used to buy about US$1.7 billion (S$2.23 billion) of real estate, art, jewellery and other assets.
Singapore and Switzerland are also among the countries investigating the roles played by banks in the case.
Deloitte declined to comment on the lawsuit and whether Sakto is a client. Royal Bank has extensive controls to ensure integrity and complies with local laws and regulations, a spokeswoman for the bank said.
Toronto-Dominion said the bank's confidentiality policy doesn't allow for comments on specific cases or customers.
"Manulife does not discuss our clients' financial transactions," Mr Sean Pasternak, a spokesman for the insurer, said in an e-mail. The company complies with the law and adheres to regulations such as for anti-money laundering, he said.
Sakto is run by Mr Sean Murray and his wife, Ms Jamilah Taib Murray, who began the company in her early 20s and is Mr Abdul Taib's daughter. Her father has been investigated by a Malaysian Anti-Corruption Commission task force, and accused of corruption by Bruno-Manser.
"It is estimated that he is amongst the richest men in South-east Asia," the group, joined in their case by a Canadian citizen of Sarawak ancestry, said in the court filing. "Neither he nor his family were independently wealthy prior to his taking office in 1981."
Over the past three decades in government, Mr Abdul Taib diverted funds from "the massive deforestation of Sarawak and by illegally structuring state commercial activities to benefit him, his family and his related companies", Bruno-Manser said in the complaint.
Sakto, founded in 1983, owns several office and residential towers in Canada's capital, including offices in the Preston Square office complex which is a 13-minute drive from downtown, according to the company's website.
It also owns the 158-unit luxury condo building, The Adelaide, nearby in Little Italy.
The non-profit said that the Malaysian politician operates a web of international companies, including Sakto, to funnel money he got from awarding lucrative timber and land deals to firms owned by himself or family members, kickbacks for awarding contracts, and taking bribes, among other allegations.