US DoJ launches bid to seize RM1.3b in suspected 1MDB funds from London law firm

It was previously alleged that the funds had been held on behalf of Saudi businessman Tarek Obaidi, who has been linked to the scandal but maintains his innocence. — Reuters pic
It was previously alleged that the funds had been held on behalf of Saudi businessman Tarek Obaidi, who has been linked to the scandal but maintains his innocence. — Reuters pic

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KUALA LUMPUR, Feb 8 — The US Department of Justice (DoJ) has issued an arrest warrant to a law firm in London for the seizure of US$330 million (RM1.34 billion) allegedly misappropriated from 1MDB and held on behalf of a client.

According to The Guardian newspaper, the UK’s National Crime Agency served the in rem warrant issued on October 29 to Clyde & Co on behalf of the DoJ, targeting the funds held in the National Westminster Bank.

An in rem warrant is issued by a court over possessions or persons in legal jurisdictions outside its authority.

According to the DoJ’s filing, it alleged the funds to be the result of the embezzlement of over US$4 billion at Malaysia’s 1MDB, which the perpetrators laundered for bribe payments or to fund their lavish personal lifestyles.

It alleged that the US$330 million being targeted was all that remains of a larger sum misappropriated from 1MDB that was used to purchase “two secondhand and ageing drillships”.

It was previously alleged that the funds had been held on behalf of Saudi businessman Tarek Obaidi, who has been linked to the scandal but maintains his innocence.

The funds are also the subject of legal action by the Malaysian Anti-Corruption Commission (MACC), which previously applied for an emergency order in the UK to prevent their withdrawal.

It was previously feared that the funds could be withdrawn despite a prohibition order issued in Malaysia as this was superseded by another order permitting PetroSaudi Oil Services (Venezuela) Limited to draw from it for business purposes.

PetroSaudi Venezuela is a subsidiary of PetroSaudi International, which entered an abortive US$2.5 billion joint venture with 1MDB in 2012 for which the Malaysian investment firm still “paid” the former US$700 million, except that the sum went to Good Star Ltd, an unrelated firm.

The 1MDB scandal has resulted in prosecution of former prime minister Datuk Seri Najib Razak, who faces four charges of abusing his position to obtain bribes totalling RM2.3 billion from 1MDB and 21 charges of money laundering involving the same amount.

He was sentenced to 12 years’ imprisonment and fined RM210 million after he was found guilty of all seven charges over the misappropriation of RM42 million of SRC International Sdn Bhd’s funds, a former subsidiary of 1MDB.

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