Wednesday 21 Feb 2024
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KUALA LUMPUR (June 6):  The Edge weekly in its latest edition published a series of emails detailing how 1Malaysia Development Bhd’s (1MDB) funds were planned to be use to take over UBG Bhd, which was then listed on Bursa Malaysia.

The magazine reported that On Dec 1, 2009, Casey Tang, an executive director at 1Malaysia Development Bhd (1MDB), shot off an email to Patrick Mahony, introducing him to new member of staff Nik Faisal Ariff Kamil who had just joined as chief investment officer from UBG Bhd.

The Edge said that Nik Faisal was no ordinary recruit and there was a specific purpose for him to be connected to Mahony, a top executive of PetroSaudi Group (PetroSaudi) who was CEO at the joint-venture company 1MDB PetroSaudi Ltd (BVI) in which 1MDB had just sunk US$1.0 billion.

It said that in the email, Tang said Nik Faisal will work with Mahony on budget matters, including “US$170 million for ‘Project Utopia’ (UBG)” — the then codename for the plan to take over UBG, which was listed on Bursa Malaysia

The magazine reported that Mahony said it needed US$420 million — US$50 million for working capital, US$200 million to buy a drill ship and US$170 million for the purchase of UBG.

At the time, 1MDB PetroSaudi had only US$300 million left from the US$1.0 billion 1MDB had injected into it on Sept 29, 2009, because US$700 million had been transferred to Good Star Ltd (Seychelles) — a company controlled by Jho Low.

The Edge said that Mahony wrote in the Dec 17 email; quoting him as saying:  “This means we have a shortfall of $120 million. What I suggest we do is to have 1MDB put more funds into the JV. Jho (Low) agrees that this is the only way but his concern was the timing to do this. You need to tell me how they (1MDB) can justify putting more funds into the JV co quickly…Please let me know and discuss with Jho but the only way we can do all this is by funding from 1MDB.”

The Edge said this was the start of a plan that would eventually see Jho Low using US$260 million of cash from 1MDB to fund his 100% acquisition of UBG, in which he was already a substantial shareholder and a member of the board.

The magazine said what happened next was that Jho Low, Mahony and Nik Faisal — working with various financial and legal advisers in Kuala Lumpur and London — got 1MDB in July 2010 to agree to subscribe for another US$500 million tranche of so-called Islamic Murabahah notes to be issued by 1MDB PetroSaudi, which by then was wholly owned by Tarek Obaid’s PetroSaudi.

For a full account of what transpired in the series of emails involving 1MDB, get the latest edition of Edge for the week of June 8 – June 14 available at newsstands now.

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