As PAC members noted in their report on all this shenanigans, the loan was nonsense.
Both the company which supposedly issued the loan, PetroSaudi International Holdings Cayman Limited (Caymans) and the subsidiary company which supposedly received it, 1MDB PetroSaudi Limited (BVI), were created on the self same day of September 18th 2009.
The loan was then hastily issued by PetroSaudi’s lawyers between their brand new holding company and brand new subsidiary on 25th September less than a week before it was due to be ‘paid back’. There is no evidence that any money actually transferred… in fact, the paper companies of PetroSaudi Director Mr Obaid had no such assets in the first place with which to issue such a monster ‘loan’.
By 29th of September, the day after the joint venture was signed, Tarek Obaid and PetroSaudi were issuing letters to 1MDB demanding the repayment of this ‘loan’ to be made to a mysterious bank account number at RBS Coutts, which cited no details of the name on the account.
![Four days after the fictitious loan was issued Tarek was demanding it back from 1MDB]()
Four days after the fictitious loan was issued Tarek was demanding it back from 1MDBHowever, a mass of email evidence at the time makes clear that everyone from Jho Low to Shahrol Halmi was aware that the account belonged to a Seychelles based company called Good Star Limited. Anxious emails flashed between Zurich and KL as the bankers at Coutts strived to learn who was the beneficial owner of this company for which they were receiving such an enormous sum of money.
1MDB CEO, Shahrol Halmi, told them it was Good Star Limited of the Seychelles.
However, the name of the company was not sufficient, the Zurich bankers said in these interchanges between 29th September and 2nd October. Who personally owned it?
These emails were forwarded to Jho Low, via the PetroSaudi email server, by the company’s directors Patrick Mahony and Tarek Obaid. Low told them via his Blackberry (see emails below) not to worry as the matter would “soon be cleared” – as indeed it was.
The matter leaves Low’s contact at Coutts Singapore, his bank manager HansPeter Brunner, in the clear firing line for questions over how this unusual deal was finally pushed through the Zurich account. Brunner has recently resigned his job and Low’s local relationship manager Yak Yew Chee is being investigated by the Singapore authorities:
!["Should be cleared soon" Jho Low told the PetroSaudi directors - see the email trail below]()
“Should be cleared soon” Jho Low told the PetroSaudi directors – see the email trail below
As the record shows, the matter was soon cleared and the money paid on October 2nd. At this point hasty emails were sent around PetroSaudi in London urging the directors to organise to send a letter to 1MDB to confirm receipt of the money and close down the matter:
A letter was drafted and then sent, confirming that the US$700 had been paid:
![But was it Mr Obaid who received the money?]()
But was it Mr Obaid who received the money?
With these formalities fulfilled Shahrol Halmi was in a position to tell a furious 1MDB Board that he had ‘repaid’ the loan as part of the joint venture agreement with PetroSaudi, when they met a day or so later.
As Malaysians now well know this was in
total defiance of the instructions he received from the Board just days earlier, which was to wait on any payment or joint venture until proper due diligence checks had been made.
However, as Halmi told the PAC, he had
ignored the Board, because it was overruled under the provisions of Section 117 of the articles of the company, which gives the final say in all matters to the Minister of Finance, Najib Razak.
![Ed Morse of Citigroup made a killing out of a report that was completed in less than a week.]()
Ed Morse of Citigroup made a killing out of a report that was completed in less than a week.
The justification dreamed up for this flash loan and repayment, supposedly to the PetroSaudi parent company, was that PetroSaudi had injected extremely valuable assets of US$2.9 billion into the joint venture in the form of its ‘ownership’ of Argentinian oil wells and a major oil field in Turkmenistan in the Caspian Sea. The cash, it was apparently argued, would make up for the immense value of these assets provided to the joint venture.
However, Sarawak Report has long since exposed these supposed assets to have been a sham and the valuation by the top US banker
Ed Morse to have been a rushed, made to order job, based solely on PetroSaudi’s own data provided to Morse. Morse got US$100,000 for his day of rejigging PetroSaudi’s own presentation and made sure to add a disclaimer that the figures and ownerships all needed to be independently verified.
So, what of those assets that supposedly under-pinned the ‘loan’? Email trails the very day after the joint venture deal was signed and the money received shows that PetroSaudi moved swiftly, indeed immediately, to close down a so-called ‘Farm in Agreement’ with a company called Buried Hill, which actually owned the oil field in Turkmenistan.
PetroSaudi had merely been in the process of negotiating a possible option to take part in their venture and did not own the asset at all. By the time of the deal PetroSaudi had just five working days to pull out of that option, explained its financiers at Ashmore Group, or it would indeed have had to have bought into the venture. PetroSaudi pulled out!
Does this explain the unseemly hurry to get this deal done by the end of September 2009?
![So, there was no Turkmenistan asset injected into 1MDB!]()
So, there was no Turkmenistan asset injected into 1MDB!
Likewise, the Argentinian ‘asset’ was also largely funded by a loan from Ashmore, which was where Director Patrick Mahony was officially still working while he fixed up the PetroSaudi deal with 1MDB.
It means that PetroSaudi injected zero assets in return for their US$700 million ‘loan’, which was repaid in cash by 1MDB…. to a third party.
Clear conspiracy
It is for the above many reasons that PetroSaudi is proven to have played the part of willing conspirators with Jho Low in the removal of the US$700 million from 1MDB.
PetroSaudi lied about its assets and then immediately terminated the ‘farm in’ arrangement, which had provided a facade of involvement in the Turkmenistan oil field (which is in fact in a disputed area and yet to achieve legal status for drilling).
It is plain, as pointed out by the PAC report, that PetroSaudi also conspired to provide a front for the receipt of the US$700 million loan, when in fact it went to a person outside of the joint venture, namely Jho Low.
PetroSaudi and their lawyers cooperated in the fabrication of the loan arrangement and repayment demand – and then provided formal notification of their receipt of the money, when in fact Good Star Limited belonged to Jho Low.
In return, Tarek Obaid was paid US$85 million by Jho Low from Good Star Limited itself on the very day of the receipt of the US$700 million. He also received on the same day a further US$20 million payment from another Jho Low company in Singapore,
Acme Time. Shortly after Tarek sent US$33 million of that on to his colleague Patrick Mahony.
Seet Li Lin
The formal letter which accompanied the above payment to Obaid from Good Star Limited detailed it as a “broker fee” to the Saudi businessman “in respect of raising funds from the Middle East to invest in Malaysia”. Nothing could have been further from the truth, since no money went from the Middle East to Malaysia – on the other hand it leaves no doubt as to which deal is being referred to in this payment.
![Pay out number 1 from Jho Low's Good Star itself]()
Pay out number 1 from Jho Low’s Good Star itself
Also on 30th September Jho Low arranged another US$20 million payment to Tarek through another of his Singapore companies Acme Time, which was arranged by one of his key fixers Eric Tan.
![Total of over US$100 million dollars to Tarek on the day the deal went through]()
Total of over US$100 million dollars to Tarek on the day the deal went through
On top of these inducements the shareholders of PetroSaudi also received a vast cash injection into their company of US$300 million, enabling it to develop into a serious player in the oil business for the first time. PetroSaudi rapidly became involved in a lucrative venture in Venezuela thanks to its ability to now invest in oil fields in the region.
Sarawak Report believes that this criminal series of inducements (which were not authorised by the 1MDB board) were what persuaded PetroSaudi to fulfil its agreed role to
“act as a front” for Jho Low.
Hence the crucial question over the real ownership of Good Star Limited.
If all the allegations against 1MDB had been false then these could have been disproved on day one by those concerned with the simple production of the official documents of Good Star Limited from the Seychelles company registry. Likewise, the documents from Coutts showing the beneficial ownership of the Good Star Limited account at the times concerned.
If the owners had been PetroSaudi, as alleged, then the entire allegation of theft could have been simply swept away.
A year later that has not happened. PetroSaudi has hidden behind lawyers and refused to answer the simple question over the ownership.
Dodging the question – PetroSaudi President Rick Haythornthwaite:
The PAC report complains also that persistent questioning of 1MDB failed to produce any documents or proof as to the ownership of Good Star Limited. The company merely offered to provide a ‘letter of assurance’ from PetroSaudi itself written in 2015, which the PAC dismissed as laughable in terms of evidence.
In fact, as long ago as our original February 28th article, Sarawak Report had established that the signatory and Chief Investment Officer for Good Star Limited in its documents dealing with both Tarek Obaid and Patrick Mahony was Jho Low’s deputy Seet Li Lin
![Seet was the signatory on an agreement with Mahony also dated 29th September 2009]()
Seet was the signatory on an agreement with Mahony also dated 29th September 2009
When Sarawak Report rang the above telephone number it was answered by Seet Li Lin.
Later information obtained by Sarawak Report from the Seychelles company directory has confirmed that Jho Low was indeed the sole beneficial shareholder of the now liquidated company.
And this was confirmed to the PAC, according to its original report, by none other than Bank Negara when questioned. The bank officials told the MPs that Good Star Limited had been confirmed as belonging to a party who had nothing to do with the PetroSaudi 1MDB joint venture i.e. neither PetroSaudi nor 1MDB.
“Datuk Hasan Arifin tried to defend his unilateral decision [to chop out two sentences of the report] by claiming that the statement “is unclear or being investigated”, hence “is something prejudicial”.
The PAC Chairman should inform the Parliament and all concerned, what exactly is so unclear about Bank Negara’s findings that “the ultimate beneficiary of Good Star Limited is an individual unrelated to the Petrosaudi International Ltd”? [Tony Pua, PAC committee member]
It was this highly damaging key central issue that Najib clearly needed to be removed from the report and he therefore directed his personally appointed new Chairman of the Committee to break the rules and take out those two crucial lines relating to the admission by Bank Negara that Good Star Limited did not belong to PetroSaudi.
It means the money was indeed stolen by the agent of Najib, Jho Low…. unless, after a year of ducking and diving, PetroSaudi and 1MDB are able to provide genuine documentation that show otherwise?
