Extra Documentary Evidence – Jho Low Accuses PM Najib For 1MDB Fiasco

Jho Low Says It Ain’t So: Malaysian Tycoon Denies Role In 1MDB ‘Heist Of The Century’

By Eric Ellis – Euromoney: Published on: Wednesday, April 01, 2015


The saga of scandalized Malaysian sovereign wealth fund 1MDB has drawn in many high-profile figures from the country’s establishment. None more so than a flamboyant, Hong Kong-based tycoon. But the self-styled Jho Low denies all involvement in 1MDB. Now he’s ready to publicly defend himself – and point the finger of blame at others.

Low Taek Jho’s high-rise lair in Hong Kong is the stuff of thrillers, appropriately enough for a young Penang-born tycoon cast by his countrymen as a mysterious villain whose shadowy dealings have exposed the secrets of Malaysia Inc. The intrigues are felt the moment one steps inside the stylish foyer of Jynwel Capital, his family’s private equity investment house based in downtown Central. A receptionist purrs that “Mr Low is expecting you” as a wall magically slides aside to reveal a minimalist ante-room framed by a panorama of the city’s harbour and the promise of China beyond. Once inside, the aperture silently glides shut behind. An immaculately dressed aide ushers the visitor to a single black leather armchair in the centre of the room. With the visitor seated, attention is diverted to a slick corporate video screening on a monitor emerging from a wall. Low appears for the first time, starring in a tour d’horizon of his worldwide empire: Caribbean resorts, European fashion, Alaskan resources, Asian property, meetings with Gulf sheikhs, his philanthropic foundation with the UN. The aide reappears to serve coffee in exquisite porcelain. Of course, it’s exactly to taste. The show over, another wall glides open and this time it’s Low in person, full of bonhomie and beckoning his visitor through another sliding wall.

With Malaysians from all sides urging his prosecution for alleged fraud and money laundering over his dealings with a scandalised sovereign fund, Jho Low, as he likes to be known, might be forgiven for wanting some extra protection after what he calls the most difficult time of his 33-year life.

However, low in the flesh doesn’t quite fit his detractors’ type. Young certainly, even geekily so, he is anxious to get his views across. At times, during a two-hour conversation, it almost seems the experience is cathartic. “I’m just constantly being gunned down,” Low laments of the furore that has engulfed the government-owned fund, 1Malaysia Development Berhad (1MDB). “I’m very frustrated, but I haven’t said anything.” In fact, since Euromoney sat down with him on March 6, Low has broken his silence in a series of carefully orchestrated interviews with Honk Kong-based newspaper South China Morning Post and television news channel CNBC. Whether Low should bear the blame for 1MDB being ‘screwed up’ is a much-discussed point in Malaysia. But few disagree that 1MDB is in deep strife, becoming a financial scandal fuelled by a drip feed of embarrassing leaks that threatens Malaysia’s creditworthiness and the continued rule of prime minister Najib Razak, who as finance minister and 1MDB chairman is ultimately responsible for the heavily indebted fund.Low is fighting back. “I feel it’s just gotten to a point where it’s just ridiculous,” he tells Euromoney.

“There are all these guys with their arrows out on me. There seems to be a very, very coordinated attempt to say: ‘This young Chinaman, it’s all his fault, he caused the failure of 1MDB and apparently he advised the PM and everything is screwed up now’.”

To hear Malaysians tell it, Low got rich at their expense and spent their money on Cristal champagne and partying with the likes of Paris Hilton. But to hear Low’s version of events, he has been demonized because he is 1) young, 2) made a lot of money quickly and 3) – and perhaps most provocative of all given modern Malaysia’s sensitive racial cocktail – is an ethnic Chinese Malaysian dabbling in the preserve of the politically connected Malay business elite.

1MDB began its controversial life in 2009 after the federal finance ministry took over the Terengganu Investment Authority (TIA), a provincial sovereign fund that Low, then a green 20-something MBA graduate from Wharton, had set up with the royal family to channel royalties from the oil-rich Terengganu state in peninsular Malaysia’s east. Malaysia already had a state investment house – Khazanah Nasional – created in the booming Mahathir Mohamad era that gave him a grip over the country’s key assets. But this new house would be different, claimed its government promoters, more dynamic – a brand-new national fund to mark a brand-new era – the Najib Razak era. It was renamed for his ‘One Malaysia’ initiative, which was conceived as a distinct break with Mahathir’s lingering legacy over the country. It also suited that a key source of cash was in federal hands, and not in states like Terengganu, which had been flirting with the opposition. But 1MDB started out with problems. There was holdover debt, while provincial jealousies festered over Kuala Lumpur’s seizure of TIA. The assets injected into the new entity were unremarkable; politically fraught land holdings at Kuala Lumpur’s fringes that yielded nothing, and a handful of ageing power stations in need of upgrading.

But actual cashflow has been rare, a problem because 1MDB has quickly accumulated debt now calculated at around $12 billion, some of it from a $3 billion state-guaranteed 2013 bond issued on very generous terms, led by Goldman Sachs. The US investment bank is believed to have made as much as $300 million in fees from that deal alone, although it disputes this figure. 1mdb-website There has been a constantly revolving door of senior executives at 1MDB, and of external auditors too, rare at a state-owned enterprise. Official information about the fund’s deals and its finances is sparse. If Malaysians want to get information about an enterprise they ultimately own, they must laboriously wade through the state companies registry at their own considerable expense. No such information is available from 1MDB’s glossy corporate website. After a chequered six years on Najib’s watch, 1MDB has descended into a financial debacle fuelled by a rampant opposition and a drip feed of embarrassing internet leaks, most damagingly from UK-based website, the Sarawak Report. Run by environmentalist Clare Rewcastle Brown, sister-in-law of former UK prime minister Gordon Brown, the site has become something of a Malaysia Wikileaks, posting embarrassing internal emails that detail the murky links and dealings of Low, 1MDB and prominent Middle East associates such as Abu Dhabi’s sovereign Mubadala Development Corp. One such report in February by Rewcastle Brown, headlined ‘Heist of the Century’, highlighted an alleged deal through 2009/10 between Low, 1MDB and a little-known Middle East-based oil exploration company called Petro Saudi International that saw around $900 million spirited into a Low-connected company. Najib and his family, notably his flamboyant wife Rosmah, have also appeared prominently in leaked correspondence, a boon to Malaysia’s opposition and his enemies within his own party, the long-ruling United Malays National Organisation (UMNO.) Embarrassed and weakened, Najib is moving to shut the 1MDB mess down, in an attempt to limit its damage to the country’s finances, and to his premiership. Though relentlessly attacked from all sides, Low has kept his silence about his links to the fund. But as near-daily revelations expose his dealings and his connections to Malaysia’s first family, he tells Euromoney that the time has come for him to talk, to defend himself against his many critics.

And it’s time too, he insists, to direct the 1MDB turmoil away from him to where, he claims, it really matters: the competence of those in charge of the fund.

“It’s so frustrating,” he says. “I’ve never faced this kind of attack from all directions. Its just crazy, and these UMNO guys are spinmasters, they know all this sort of nonsense.” He continues: “All these guys go round and round and round and I say: ‘Guys, it’s very simple, there’s a board, who’s the shareholder?’ Have you ever seen one statement from anyone that talks about the simple governance of a company? “Are you telling me the prime minister doesn’t make his own decisions? That the ministry, the minister of finance, who is the prime minister – and there are only two to three people in the finance ministry that sign off on shareholder resolutions under law – that none of them… that they just signed without evaluating it?” Low is on a roll now: “Did the people supposed to be responsible for decision-making (at 1MDB) suddenly decide to absolve all their responsibilities and then create this PR campaign with me as the focus of it? “No one seems to ask the question who is the ultimate decision-maker on 1MDB? No one asks that. No one ever asks about the shareholder’s role.” He concludes: “There are so many other people who get away with ridiculous billions and billions and billions worth of projects. But every single time there seems to be a political attack, wow, suddenly Jho is there again.”

Low says six years of silence on the matter have created “a crazy perception. I’ve done nothing wrong (but) no one in Malaysia is interested in our point of view. Then we try to get out of this perception and they launch a gazillion rounds of attacks in a very systematic manner.” He admits his high-profile lifestyle – the much-photographed celebrity partying in Hollywood and photos with Leonardo DiCaprio through links to the financiers of Hollywood blockbuster ‘Wolf of Wall Street’, hasn’t helped his cause. LOW-TAEK-JHO “My mistake?” he asks rhetorically. “Young kid, made a lot of money, never thought about the timelines of these events… and then partying, blah blah blah blah… and that’s the part that gets all the attention.” Low says it was a lethal recipe for adverse publicity. “I made money and I spent it, and it’s: ‘Oh, he must’ve made it from TIA/1MDB.’ I mean that’s basically the accusation. And because there are all these pictures of me and Paris Hilton drinking and all that, then you play to the bumiputra (ethnic Malay) card: ‘Oh, the Chinaman stole all the money and blew it all on alcohol’. And then I’m just like, I must be the dumbest person ever, if I really made money off the government and then to blow it like there is no tomorrow, it’s like about the dumbest thing you can do.” To make his point, Low says: “I graduated from Wharton. I’m not that stupid. I just didn’t understand politics at that time.”

As for calls for his prosecution, Low says he doesn’t fear arrest on return to Malaysia. “The biggest concern is people fabricating documents. I’ve no proof, there’s so much innuendo,” he says. But, Euromoney points out, Low has been seen for many years by prospective investors or partners of the embattled sovereign fund as its go-to guy. The rainmaker of 1MDB, to borrow the title of the film with which he is associated. Low denies this. “Not really, I think they see me as… I think, for me, I have a very good relationship with Abu Dhabi, so any deal they do anywhere in the world, they would first come to me and ask if I want to co-invest. In the Malaysian case, we always say no because it’s politically sensitive.” Euromoney puts the question that everyone wants an answer to: when was the last involvement he had with 1MDB? “I want to define it very clearly,” he replies. “I never get involved with 1MDB. 1MDB never asked me to advise them or pay me a fee or do anything, and I have been very clear on that. If someone at 1MDB wants to call me and say: ‘You know, Jho, what’s your view on the Middle East?’ I’ll give them my view on the Middle East.” SOUTH-CHINA-MORNING-POST He also admits that if a prospective investor asks his advice about 1MDB, he’ll provide it. “[They ask me:] ‘I want to buy a piece of land in TRX (the Tun Razak Exchange, an undeveloped KL property named after Najib’s late father and owned by 1MDB), what do you think about TRX, can you give me your views, can you connect me with them, can I talk to them?’…” Much of the speculation around Jho Low’s involvement in 1MDB relates to his role in TIA, the state fund he devised with the Terengganu royals that was taken over by the federal government. Again, he tries to shift the focus away from him. “It’s factually correct to say that from January to mid-May 2009 I was involved in TIA,” he says. “But then [it’s said] by someone or another I’m the main guy involved and that the other five guys – the other TIA board members – have disappeared? That, in that process, (TIA advisers) Goldman Sachs, JPMorgan, Boston Consulting and McKinsey all just disappeared, right?” Asked if he is invested in 1MDB bonds, he is emphatic. “Absolutely not… zero, absolutely zero. I never bought any 1MDB bonds. Let’s make it clear. But they have tried to make this accusation that I profited from Goldman’s fees.” Low is adamant. “I don’t run 1MDB. I don’t control 1MDB. I don’t decide anything on 1MDB, but if any Middle East entity that I know wants to ask me for my view, I’ll give them my view. And, if they want to get involved with 1MDB, that’s their prerogative.”

But the leaks keep coming, leaks that suggest a more profound role than Low agrees with.

Shortly after Euromoney met Low, the Sarawak report published an email dated December 19, 2009 purportedly from Low to two Petro Saudi officials, Patrick Mahony and Tarek Obaid, that 1MDB chief investment officer Nik Faisal Ariff Kamil “will work with you”, after Mahony had emailed Low to insist that any communications between PSI and 1MDB be confined to just Mahony and Kamil. Doesn’t this suggest that Low’s influence was much greater than he claims? Low says the situation is such that neither he nor his family can do business in his home country. “I choose not to just because anything and everything is going to be spun and become politicized. There is a perception that I share close links to the prime minister, but I’m not sure what has happened in recent times indicates that. But it has, because we still own a lot of real estate in Penang, which is now run by the opposition.” For the anti-Najib opposition denied victory in the 2013 elections, despite winning a popular majority, Low and 1MDB are a propaganda gift to pile pressure on a long-ruling UMNO-led coalition beset by scandal. wolf Riza AzizJoey Mcfarland Jho Low at the launch of Wolf Of Wall Street Low’s personal connections to Najib’s family have also been a useful battering ram for Malaysia’s ageing former prime minister Mahathir, who’d like to see Najib replaced as UMNO leader and PM. And Low is politically toxic for Najib as well, despite a long friendship dating from his English secondary school days with Najib’s stepson Riza Aziz, a Hollywood movie producer best known for his backing of ‘The Wolf of Wall Street’. “There is a perception that I have a good relationship with the PM’s wife because of the stepson. I mean, I know the stepson well, but I’m not sure I would agree that I am the wife’s best friend. “Of course the opposition is attacking the government and they think by attacking Jho Low that the prime minister will get affected because of my 16-year relationship with his stepson,” he says.

Low appears to be almost friendless in Malaysia. But his friend the prime minister is sticking by him. On March 16, a statement was issued in Najib’s name trumpeting the same line as Low proffers: “[He] has never worked for 1MDB and all decisions and dealings of 1MDB was done by the management and board of directors.” Low would like that to be the end of the matter. He knows it won’t be. “At the end of the day, something that was supposed to be a good cause just gets screwed – guess what? – because everyone just wants control of the money. It’s really as simple as that.” As the 1MDB scandal rolls on, there are many Malaysians who continue to say that ‘everyone’ also includes Low Taek Jho.

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