KUALA LUMPUR, Jan 25 ― Investigators on fugitive financier Low Taek Jho’s role in the 1Malaysia Development Berhad (1MDB) heist are looking into a RM5 billion bond sale in 2009 involving local banks and companies in Thailand and Singapore, Bloomberg reported.
Low, commonly known as Jho Low, is believed to have made financial gains from the Terengganu Investment Authority (TIA), the state wealth fund that later became 1MDB under the leadership of Datuk Seri Najib Razak.
Quoting people familiar with the case, Bloomberg reported that Low and his associate Eric Tan are believed to have received US$126 million (RM521.5 million) in illicit funds from a deal arranged by banking and financial services firm AMMB Holdings Bhd ― a sister company to the AmBank Group ― involving companies in neighbouring Thailand and Singapore.
The authorities are scrutinising if and how Low and Tan benefited from transactions involving bonds issued by TIA that changed hands twice on the same day at vastly different prices.
It was reported that the series of transactions in 2009 may have started with TIA reaching out to AmBank to help it raise RM5 billion.
AmBank then sold RM3.8 billion of the TIA notes to Country Group Securities Pcl in Thailand, and RM700 million to a Singapore-based company, while buying RM500 million for itself, according to the report.
The three parties bought these notes at a discounted price of about RM87 ringgit for 100, on account of the notes being the first 30-year Islamic notes out of Malaysia.
Investigators reportedly obtained documents that showed the parties resold the bonds for profit on the same day.
It was believed that AmBank helped them sell the notes for RM100 to RM105 to local investors.
These transactions were done within 24 hours, which raised the suspicions of investigators.
Investigators are also probing why AmBank didn’t arrange for the bonds to be sold directly to the investors, and how Country Group, a new name in the 1MDB investigations, came into the picture.
Low, who served as an adviser to TIA at the time, was believed to be involved in the discussions on the bond issuance from the start.
Investigators also found a put option agreement that Country Group signed with Singapore-based ACME Time Ltd, whose beneficiaries are Low and Tan.
This agreement led to Country Group sending a third-party transfer instruction to AmBank to pay US$113 million, generated by reselling the TIA notes, to ACME Time.
It is unclear whether new charges will be filed based on these transactions while Secretary-General Rapee Sucharitakul said Thailand’s Securities and Exchange Commission are yet to be contacted about any investigations involving 1MDB.
The authorities were also looking into whether any individuals concealed or misrepresented statements related to the bond sale and whether any of the funds were misappropriated.
The Securities Commission is reportedly conducting inquiries into matters relating to 1MDB, including the TIA bond issuance.
Both Low and Tan, who remain at large, faced multiple charges in the Malaysian courts last December for allegedly receiving US$113.4 million of illicit funds through ACME Time from an AmBank account in May 2009.
They were charged with receiving another US$12.6 million in July 2009 but the charges were not linked to the payments to TIA’s bond sale.
US prosecutors also named Low as the alleged mastermind of the US$4.3 billion 1MDB scandal that involved Goldman Sachs Group Inc and led to investigations on three continents.
Low, who remains a fugitive, has repeatedly denied any wrongdoing.
Najib has been hit with 39 charges related to 1MDB and its former subsidiary SRC International Sdn Bhd while his wife Datin Seri Rosmah Mansor has also accumulated a series of money laundering charges.
Both have denied wrongdoing and are awaiting trial.
