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Thursday, July 16, 2020, 13:58
Malaysian court grants temporary freeze on US$340m 1MDB money
By Reuters
Thursday, July 16, 2020, 13:58 By Reuters

Malaysian Anti-Corruption Commission (MACC) officials handle boxes of documents relating to the 1MDB trial at the Kuala Lumpur Courts Complex in Kuala Lumpur, Malaysia on May 19, 2020. (SAMSUL SAID / BLOOMBERG)

KUALA LUMPUR - A Malaysian court on Thursday granted an interim order to stop Saudi energy firm PetroSaudi International (PSI) from using more than US$340 million in funds in Britain, which Malaysian prosecutors believe was siphoned from state fund 1MDB.

High court judge Mohd Nazlan Mohd Ghazali imposed a temporary freeze on the funds in Britain held by PetroSaudi, which has links to the Saudi royal family

US and Malaysian authorities say about US$4.5 billion was stolen from 1Malaysia  Development Berhad (1MDB) in an elaborate scheme that spanned the globe and implicated former Malaysian Prime Minister Najib Razak and US bank Goldman Sachs, among others.

Najib has denied wrongdoing. In February, three units of Goldman Sachs pleaded not guilty in a Malaysian court to charges of misleading investors regarding US$6.5 billion in bond sales the US investment bank helped raise for 1MDB.

ALSO READ: Najib's 1MDB trial on hold to let him join Malaysia politics

High court judge Mohd Nazlan Mohd Ghazali imposed a temporary freeze on the funds in Britain held by PetroSaudi, which has links to the Saudi royal family, pending the outcome of an Aug 28 hearing on an application by Malaysian prosecutors seeking an order to prohibit the company and four others from accessing it.

The Malaysian Anti-Corruption Commission (MACC), which filed the application under anti-money laundering legislation, said it would extend the interim order to British authorities via mutual legal assistance to ensure the assets remain frozen until the court comes to a decision on the case.

The Free Malaysia Today news site quoted a lawyer for the MACC, Muhammad Nizamuddin Abdul Hamid, as saying Britain’s National Crime Agency (NCA) had advised Malaysian authorities to seek a Malaysian court order so the NCA could enforce it there.

ALSO READ: Malaysia seeks to amend 1MDB charges against Goldman Sachs

Others named in the application were PSI co-founder Tarek Obaid; PetroSaudi Oil Services (Venezuela) Limited; Clyde & Co LLP, which is holding US$500 million of PetroSaudi funds in escrow; and an account under the name Temple Fiduciary Services, which Malaysian prosecutors say allegedly belongs to Tarek.

Lawyers representing Tarek and PetroSaudi Oil Services opposed the order in court.

They declined to comment on their clients’ position on the case when approached by reporters outside the court.

Co-founded by Najib in 2009, 1MDB entered what would ultimately become a failed joint-venture with PetroSaudi to develop oil fields that year, with US$1 billion paid up front by the Malaysian fund.

READ MORE: DOJ: US reaches settlement to recover over US$49m involving 1MDB

Since Najib was ousted in 2018, the country has reopened investigations and sought to find the billions of dollars missing from 1MDB. It has brought back US$600 million with help from US authorities and recouped millions of dollars more with assistance from neighboring Singapore.

Najib’s party has since returned to power following a political turmoil in February that ended with the appointment of Prime Minister Muhyiddin Yassin. Muhyiddin has pledged to continue fighting corruption and working with authorities around the world to recoup the funds, even as his government faced backlash for striking a deal with Najib’s stepson to drop a different set of 1MDB-related charges.


With Bloomberg inputs

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