1MDB-Related Court Cases in Singapore: Yeo made S$23.9m in illicit money in 15 months from 1MDB deals

By December 10, 2016Malaysia News

1MDB-Related Court Cases in Singapore: Yeo made S$23.9m in illicit money in 15 months from 1MDB deals

By The Edge – November 28 – December 4, 2016

This article first appeared in The Edge Malaysia Weekly, on November 28 – December 4, 2016.

THE trial of ex-BSI banker Yeo Jiawei in Singapore on charges of tampering with witnesses ended on Nov 22, with the prosecution producing a chart that positioned him as the central figure involved in coordinating the laundering of money that originated in 1Malaysia Development Bhd (1MDB).

Prosecutors finished presenting their case by saying that because of the major role Yeo played, he was able to earn S$23.9 million in the 15 months after he left BSI to be an independent consultant to Low Taek Jho, or Jho Low, and to the fake Aabar Investments PJS Ltd (BVI).

At the time he left BSI in July 2014, Yeo’s net worth was S$2.0 million but 15 months later, he was worth S$25.9 million, based on documents produced in court.

Prosecutors said that Yeo had earned illicit money, an accusation he denies.

The 34-year-old has been described as the brain behind creating the various trust and investment structures to enable the laundering of billions of dollars that originated in 1MDB.

Yeo was the principal person who had dealt with clients like Jho Low, his associate Eric Tan Kim Loong, Mohamed Ahmed Badawy Al-Husseiny of Aabar and corporate services provider Amicorp Group to execute the various transactions.

Prosecutors had on Nov 22 produced a simple two-page document that Yeo had sent to Jose Renalto Carvalho Pinto of Amicorp that was to be used as a promissory note to be issued by the fake Aabar to 1MDB Global Investments Ltd to take over a fund called Rio Sereno Ltd for US$1.49 billion.

The promissory note carried no interest and the fake Aabar was to pay up the sum within 12 months, failing which it had to pay 3% interest.

1MDB Global Investments is the company that had raised US$3.0 billion in 2013 to develop the Tun Razak Exchange, but after raising the money, 1MDB remitted the bulk of it overseas to be invested in various things that it never fully disclosed. In its last audited accounts, 1MDB classified them as Available-For-Sale Investments, without details.

Here is a summary of key testimonies during the 12 days of hearing: 

Samuel Goh Sze-Wei, 40, a Singaporean and director of Bridge Partners Investment Management (BPIM) (Cayman Ltd)

Goh said he was approached by Yeo with a proposal where he could earn a lot in referral fees. He was asked to invest US$100,000 in BPIM (Cayman) and was introduced to Lobo Lee of BPIM, which was to be the investment manager of the Bridge Global Absolute Returns Fund (BGAR) in which 1MDB’s subsidiary Brazen Sky Pte Ltd was to invest. 

When Lee quit BPIM in early 2014, it had to look for another party with a fund management licence and that company was Australia’s Avestra Asset Management Ltd. Goh sold his 45% stake to Avestra for US$100,000. He said he travelled to Melbourne with, among others, 1MDB executive director of finance Terence Geh to negotiate the deal with Avestra. (Avestra was closed down by the Australian authorities in December 2015 for various breaches of corporate laws.)

Goh said he had earned US$4.0 million in referral fees acting as an intermediary between 1MDB, BSI Bank and Amicorp Spore Pte Ltd, which created the various fund structures.

Jose Renalto Carvalho Pinto, 35, a Brazilian who works as relationship manager at Amicorp Spore Pte Ltd

Pinto testified that in December 2011, he was asked to contact Yeo, who told him that BSI needed to urgently create a fiduciary fund structure involving the sovereign wealth of two countries — Malaysia and Saudi Arabia. He said this was the start of many fiduciary fund structures that Amicorp worked on with BSI for 1MDB and later, several Aabar companies that turned out to be unrelated to Aabar Investments of Abu Dhabi.

He named these companies as Aabar International Investments PJS Ltd (BVI), Aabar Investments PJS Ltd (Samoa), Aabar Investments PJS Ltd (Seychelles) and Aabar Investments PJS Ltd (BVI).

He said he also created trust structures for Jho Low and his family as well as for Jho Low’s associate Eric Tan Kim Loong.

Pinto described Yeo as very smart, hardworking and well versed in complex financial structures and that the latter had assured him that these Aabar companies were owned by Abu Dhabi’s Aabar Investments PJS.

The Brazilian also told the court how Amicorp shared the fees it had received from its clients with companies whose beneficial owners were Yeo, Goh and Yeo’s boss at BSI, Kevin Swampillai. He said Amicorp created fund structures valued at US$1.5 billion for 1MDB and the fake Aabar companies.

He spoke about meetings in Barbados and Abu Dhabi with Yeo, Jho Low, Mohamed Ahmed Badawy Al-Husseiny and 1MDB executive director of finance Terence Geh.

Pinto said that in November 2015, after many negative news reports surfaced about the problems at 1MDB, he met Jho Low and Geh in Abu Dhabi.

He told them that Amicorp did not want to receive any more payments from 1MDB as it was concerned about all the negative publicity surrounding the Malaysian sovereign wealth fund.

“I said Amicorp is not comfortable receiving payments from 1MDB because of the scandal and Terence responded and said we (1MDB) will save some money then,” Pinto told the court.

Pinto also brought up payments that Yeo was getting from the various deals and he said both Geh and Jho Low said there were no such agreements. “Jho Low laughed, hahaha, and said this must be Jiawei’s thing,” Pinto told the court.

The Amicorp executive went on to describe how he had panicked around April 2016 when Abu Dhabi’s International Petroleum Investment Corp (IPIC) announced that it was not the owner of Aabar Investments PJS Ltd (BVI), to which 1MDB had paid US$3.5 billion.

He said as Amicorp had created fund structures for four such Aabar companies, he decided to offer what he knew to the Commercial Affairs Department (CAD) of Singapore, which was investigating billions of dollars of money laundering that was done out of Singapore.

He went on to describe how Yeo had sent him messages to say that he (Yeo) had been called in by CAD. Yeo told him not to return to Singapore (Pinto was based in Hong Kong then) and to destroy a laptop and that he should use the Telegram messaging app as it was more secure.

Oh Yong Yang, investigating officer, Commercial Affairs Department

Oh described the investigations into transactions involving 1MDB as the largest and most sophisticated money laundering CAD had ever handled.

He named Low Taek Jho (Jho Low), Yeo Jiawei, Eric Tan Kim Loong and Mohamed Ahmed Badawy Al-Husseiny as among 10 individuals described as “persons of interest” who were the subject of investigations by Singapore and other jurisdictions.

What the accused Yeo Jiawei said

Yeo told the court the first structure he did for Malaysia’s sovereign wealth fund was for US$100 million for SRC International Ltd.

He said the scheme devised was for SRC, then a subsidiary of 1MDB, to invest in a fiduciary fund called Enterprise Emerging Market Fund (EEMF).

He explained that a fiduciary fund was one where the client, in this case SRC, will direct the manager of the fund on what to do with the money invested.

He told the court SRC asked that EEMF give a loan of US$100 million to a company called Blackstone whose beneficial owner was Eric Tan Kim Loong, an associate of Jho Low.

After that first transaction, many more followed from 1MDB and SRC, Yeo said.

Yeo said his boss Kevin Swampillai had asked him to handle that transaction in December 2011 and that it was to be done on an urgent basis and that the client was a very big and important client.

He said that SRC and 1MDB were the clients of his colleague Yak Yew Chee and that he was just a support staff to execute what was decided by his bosses. He denied that he was the principal link to Jho Low who had brought all the 1MDB deals to BSI.

The Singapore State Court will deliver its verdict on Dec 21. Yeo is also facing money laundering charges, which will be heard next April.