Report: Ex-IPIC managing director claims made scapegoat by UAE authorities in 1MDB scandal

A man walks past a 1 Malaysia Development Berhad (1MDB) billboard in Kuala Lumpur, March 30, 2015. — Picture by Yusof Mat Isa
A man walks past a 1 Malaysia Development Berhad (1MDB) billboard in Kuala Lumpur, March 30, 2015. — Picture by Yusof Mat Isa

KUALA LUMPUR, Jan 23 — The former managing director for the International Petroleum Investment Co (IPIC), which guaranteed US$3.5 billion (RM14.47 billion) in 1Malaysia Development Berhad (1MDB) bonds, has claimed that he is being made a scapegoat by the United Arab Emirates (UAE) authorities.

The Wall Street Journal (WSJ) reported that Khadem Al-Qubaisi, a former top aide to a “powerful member of Abu Dhabi’s royal family”, had said that the Emirati authorities were trying to force him to turn over his assets to a company owned by UAE deputy prime minister Sheikh Mansour Bin Zayed al Nahyan.

Al-Qubaisi was arrested in 2016 after the US Justice Department accused him and other co-conspirators of collectively stealing billions from 1MDB. He had received US$471 million of stolen funds in a private bank account in Luxembourg.

The US-based paper reported that the US Justice Department’s civil complaint said he tried to use the funds to purchase property in the US but has not been charged with any crime in the US or UAE.

In his first media interview since he was jailed, he told WSJ from prison that he was being made a “scapegoat” by Sheikh Mansor, who is also the Abu Dhabi Judicial Department chairman where he oversees all criminal cases there.

Al-Qubaisi has reportedly accused the authorities of trying to turn his assets to a private company owned by Sheikh Mansor, who was also his former boss.

The Abu Dhabi government, along with the sheikh’s representatives and his company Das Holdings refused to comment on the allegations.

However, an unnamed lawyer told WSJ that Al-Qubaisi had allegedly abused and exceeded his authority to achieve “personal and illegal gains” and is currently concerned with keeping his “illegal wealth” instead of doing the right thing.

The former IPIC top executive said senior UAE officials were fully aware of his actions when IPIC became a key business partner to 1MDB, including guaranteeing the bonds.

At that time, Sheikh Mansour was also IPIC chairman.

The US claimed that Al-Qubaisi funnelled the 1MDB money to co-conspirators through companies set up to look like IPIC subsidiaries.

“I did this deal but I did it on behalf of the government of Abu Dhabi. Now ‘they are putting everything on my back.’

“If I did something wrong for this Malaysia deal, okay, they can go and take my assets, no problem,” he reportedly said.

“Why is a private company trying to take control of my assets?”

The paper also reported that the Abu Dhabi intermediary who set up the call had been detained and questioned by local security services.

WSJ also mentioned that financial documents reviewed after the interview show a bigger asset financed largely by 1MDB money — a half-billion-dollar yacht called Topaz.

“Financial documents reviewed by The Journal after the interviews show an even bigger asset was largely financed with 1MDB money but hasn’t been targeted by authorities: A half-billion-dollar yacht called the Topaz. Mr Al-Qubaisi directed companies he controlled to use approximately €116 million originating from 1MDB for debt payments on the yacht between 2012 and 2015, the documents show.

“The Topaz — a 482-foot yacht with eight floors, a swimming pool, cinema and two helicopter pads — was used and controlled by Sheikh Mansour until at least 2015, according to people familiar with the matter.

“Jho Low, the Malaysian financier who US officials allege masterminded the 1MDB scandal, leased it on multiple occasions, including to attend the 2014 Fifa World Cup with Leonardo DiCaprio and other celebrities, according to people familiar with the matter,” it reported.

The luxury ship’s current ownership is undetermined.