ACCORDING TO an article published in The New York Times on June 17, 2015 (see excerpt), 1Malaysia Development Bhd (1MDB) said that Good Star Limited (Seychelles) is owned by the PetroSaudi International Group . As such, the US$700 million that 1MDB remitted on Sept 29, 2009, to Good Star was a legitimate payment of money due to PetroSaudi.

We have several questions, arising from the NYT article, which we would like to ask 1MDB and its President Arul Kanda Kandasamy about the ownership of Good Star.

1) As there are many PetroSaudi companies, please confirm that the PetroSaudi you stated to NYT is PetroSaudi Holdings Limited (Cayman). Or were you referring to its parent company PetroSaudi International Ltd (Saudi), which is registered in the Kingdom of Saudi Arabia and co-owned by Tarek Obaid and Prince Turki? Please say clearly which PetroSaudi you were referring to.

2) Can you confirm that the Good Star you referred to in the NYT article is Good Star Limited (Seychelles), which is the beneficiary owner of the RBS Coutts Bank Ltd Zurich Account Number 11116073?

3)Why is 1MDB speaking on behalf of PetroSaudi to say that it owned Good Star?

4) Who in PetroSaudi provided the information to 1MDB that PetroSaudi owned Good Star?

5) Has 1MDB itself verified this information to be true?

6) When did PetroSaudi own Good Star? Did it own Good Star from the date of incorporation?

7) If it is proven that PetroSaudi did not own Good Star at the time that 1MDB, on the instruction of then CEO Datuk Shahrol Halmi, remitted US$700 million to the RBS Coutts account in Zurich, will Arul or someone in 1MDB take responsibility for the wrongful payment?

On June 16, 1MDB issued a statement, “What is Dr M’s motivation in ever-changing claims?” to rebut allegations made by the former prime minister.

To the allegation by Mahathir that PetroSaudi did not put a single cent into the aborted joint-venture, 1MDB said the following:

PetroSaudi, via a subsidiary company, owned assets, comprising rights to oil fields in Turkmenistan and Argentina, worth approximately US$2.7 billion.

These assets were sold by PetroSaudi to another subsidiary, “JV Co”, which at the time of the asset sale, was a company formed by and initially 100% owned by PetroSaudi for the purposes of a proposed joint venture with 1MDB.

In return for the US$2.7 billion asset transfer, JV Co had to pay PetroSaudi US$700 million. This indebtedness resulted from the asset transfer. Accordingly, there was no loan made or “to settle”.

We have these questions for Arul and 1MDB pertaining to the parts of its statement that we have highlighted.

1)Are you sure there was no loan agreement pertaining to the US$700 million payment?

2) What if it is proven that there was a loan agreement and that 1MDB had remitted the US$700 million because the “lender” had, on Sept 29, 2009, sent a letter of demand for the loan to be paid back? What will you do?

3) What is the name of the “subsidiary of PetroSaudi” mentioned in your statement that the US$700 million was paid to?

Arul, since you have been very fast to respond to allegations made by Mahathir, we hope you will be equally fast to respond to our questions.

This article first appeared in The Edge Malaysia Weekly, on June 22 - 28, 2015.

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