KUALA LUMPUR, March 17 — The High Court today fixed hearing dates on September 6 and 7 to hear the Malaysian government’s bid to stop Saudi citizen Tarek Obaid, his company PetroSaudi International Limited (PSI) which was incorporated in Saudi and three others from accessing over US$340 million of funds allegedly originating from 1Malaysia Development Berhad (1MDB) and currently being held in the UK.
When met at the Kuala Lumpur court complex, deputy public prosecutor Budiman Lutfi Mohamed confirmed to reporters the hearing dates for the Malaysian government’s application to prohibit the five respondents from accessing the funds in the UK.
Asked about the progress of negotiations between the Malaysian government and the respondents for an out of court settlement, Budiman merely said it was “ongoing”.
The five respondents in this court case — filed on July 10, 2020 by the Malaysian government via the public prosecutor — are Tarek, PSI, the Barbados-incorporated PetroSaudi Oil Services (Venezuela) Limited (PSOS-VZ), UK law firm Clyde & Co, and Temple Fiduciary Services Ltd.
Earlier, Budiman and PSOS-VZ’s lawyer Alex Tan were in a case management before High Court judge Datuk Ahmad Shahrir Mohd Salleh.
This was the first time that the case has come up before Ahmad Shahrir, who took over from High Court judge Mohd Nazlan Mohd Ghazali.
The matter was last brought up before Mohd Nazlan on February 4. Mohd Nazlan was on March 1 transferred from the criminal courts to civil courts to replace another judge who was retiring.
The Malaysian government filed an application in July 2020, seekig a prohibition order under Section 53 of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLATFPUAA).
Section 53 relates to prohibition orders to prohibit persons from “dealing with properties” they that are holding outside of Malaysia, where the public prosecutor can apply for and where the court can issue such orders if satisfied that such property falls into various categories, such as being proceeds of an unlawful activity or being the subject matter or proof of money-laundering offences.
The Malaysian government sought to prohibit anyone from dealing with properties held overseas in the form of US$340,258,246.87 held by UK law firm Clyde & Co for PSOS-VZ which is fully owned by Tarek via PSI, as well as to prohibit anyone from dealing with an unspecified sum of funds held in Temple Fiduciary Services Ltd’s escrow account on behalf of PSOS-VZ which is wholly-owned by Tarek via PSI, as the public prosecutor was satisfied such funds were related to a money-laundering offence.
The judge Mohd Nazlan granted an interim order to the Malaysian government on July 16, 2020, to stop PSI, its founder Tarek and PSI subsidiary PSOS-VZ from moving the 1MDB-linked funds from the UK law firm Clyde & Co’s escrow account to other entities, in order to preserve the status quo until the court hears and decides on the government’s application for the prohibition order.
Mohd Nazlan on August 19 allowed PSOS-VZ’s request for the interim order’s terms to be amended, to enable the company to access US$1.357 million of the US$340 million sum to pay for business expenses and legal costs.
Last September, British newspaper The Guardian reported the US Department of Justice had filed civil forfeiture proceedings to seize US$330 million held by Clyde & Co, alleging that the funds can be traced back to money stolen from 1MDB and which went through money-laundering.
