KUALA LUMPUR: There is no way for the 1Malaysian Development Bhd (1MDB) to be investigated under the US Racketeer Influenced & Corrupt Organizations Act (RICO), says economist Azmi Arshad.
In his latest Facebook posting, Azmi argued that the question of ‘racketeering’ did not even arise in the case of 1MDB, as there was no proof whatsoever that a sum of US$700 million was siphoned by the Good Star Ltd as alleged by some.
Highlighting that the Good Star Ltd is owned by the Petrosaudi, Azmi further said: “This being the case, in this respect, no US$700 million could have been ‘siphoned out’ by anybody, including Jho Low (not that I care much if Jho Low is charged for other crimes not related to 1MDB).
“Therefore the question of ‘racketeering’ does not arise even before there is any concern whether RICO is even relevant,” he said further.
The post was meant to rebut an article by the fellow at Universiti Putra Malaysia’s Putra Business School Wan Ahmad Fayhsal Wan Ahmad Kamal which was published in The Malaysian Reserve recently.
Wan Ahmad Fayhsal, in his article titled ‘Could the RICO Act be applied to 1MDB?’, argued that there were probably three main reasons on why the controversial sovereign wealth fund could be investigated under the US Federal Laws.
“1MDB’s transactions are mostly US Dollar-denominated and using the SWIFT system. Say if large amount of money in USD was transferred between “shell companies” in Cayman Island, Singapore and Malaysia that somehow involved 1MDB, definitely it would have passed through one of the USD clearing houses in the US, say the Bank of New York. Any potential and possible wire fraud done by this “runner”, 1MDB would be implicated as well.
“1MDB ‘parked’ its so-called ‘units’ in BSI of Singapore. No one has pointed out that its parent company BSI SA of Lugano in Switzerland was the first to ‘graduate’ under DoJ’s Swiss Bank Programme,” Wan Ahmad Fayhsal wrote.
The last point, he said, was when the Jho Low’s failed bid to buy chain of hotels in UK.
“The court’s judgement made it clear Jho Low’s The Wynton Group received backing and was underwritten by 1MDB for the bid. The evidences are all in UK,” Wan Ahmad Fayhsal wrote further.
Therefore, he concluded that it is only a matter of time before 1MDB’s management would be investigated under the Act.
Last check had shown that the article could not be reached in the online version of TMR.
Replying to the allegations, Azmi questioned on how would the money went missing when the details of the investment in the Cayman Island were already accounted for.
“It has already been established that BSI held the US$1.103b financial assets after it was redeemed from Cayman unless you believe that six international banks who loaned the US$975m were stupid enough not to know that the financial assets were ‘worthless’ as collateral.
That being the case, how could even a single dollar have gone missing after all the investment that went into Cayman were accounted for: namely, a portion came back to pay for, among other things, the RM2 billion bridging loan while the remaining US$1.103b went to BSI. How much then could have been ‘siphoned out’?,” Azmi asked.
He pointed out that with the Cayman investment all accounted for, the question of ‘racketeering’ did not arise at all.