Monday 27 May 2024
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KUALA LUMPUR (June 13): The US Justice Department alleged that funds stolen from 1Malaysia Development Bhd (1MDB) were used for the US$2.2 billion (about RM9.37 billion) acquisition of US-based Coastal Energy Co under a deal which netted Jho Low US$300 million within a week.

The Wall Street Journal (WSJ), quoting the Justice Department asset seizure lawsuit and people familiar with the investigation, reported today that between 2013 and 2014, Low invested US$50 million in the US$2.2 billion deal while Abu Dhabi-based International Petroleum Investment Co's (IPIC) Spanish energy unit, Compañía Española de Petróleos SAU (Cepsa), financed the balance.

WSJ, which also quoted statements announcing the acquisition, reported that Cepsa and Low's shell company formed a joint venture to buy Coastal Energy. WSJ reported that Cepsa transferred US$350 million to Low's shell company.

"The commercial basis for this nearly immediate 600% return on investment is not immediately apparent," the Justice Department lawsuit said, according to WSJ's report.

"The Justice Department is interested in the Coastal deal because it says the US$50 million Mr Low invested originally came from 1MDB. The Justice Department on Tuesday moved to seize London property that it says was bought with some of the US$350 million proceeds of the Coastal deal. The Justice Department has questioned people involved in the deal in recent months, according to people familiar with the investigation," WSJ reported.

According to WSJ, IPIC and Cepsa did not respond to requests for comment. WSJ said it was also unable to get Low's respond on the matter as his whereabouts were unclear.

"Jho Low, whose whereabouts are unclear, has denied wrongdoing. 1MDB has consistently denied wrongdoing and said it would cooperate with the investigations," WSJ reported.

According to WSJ, the Justice Department lawsuit cited Low as saying Cepsa bought out his stake because it "wanted full control and ownership of the business".


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