This article first appeared in The Edge Malaysia Weekly on June 24, 2024 - June 30, 2024

THE list of jewellery and luxury goods worth US$346.01 million (RM1.632 billion), allegedly purchased using misappropriated funds of 1Malaysia Development Bhd (1MDB) and its subsidiaries, is not exhaustive and may be amended to include subsequent items as investigations are still pending, the companies said in their lawsuit against Datin Seri Rosmah Mansor.

In their statement of claim (SOC) filed earlier this month, 1MDB and its four subsidiaries and SRC International Sdn Bhd stated that they reserve the right to amend the statement which listed all the valuables said to have been acquired by Rosmah between 2010 and 2014 from funds that originated from the companies. Discovery applications in three jurisdictions — Hong Kong, the US and the UK — have been filed to seek further details of luxury valuables which may not have been accounted for and are still pending investigations.

The plaintiffs’ court filings through Messrs Lim Chee Wee Partnership and a file search indicated that there are about 12 volumes of listed items with the lists running to more than 100 pages.

Interestingly, in one of the volumes, and listed by the Department of Justice (DOJ) documents, the testimony of a Jacob & Co employee named Beverly Bartalis admitted that Low Taek Jho’s (Jho Low) accomplice Eric Tan Kim Loong had sent an email dated May 4, 2011 to Philip Nassimi informing the company that it should not send any invoice or emails that made any reference to then prime minister Datuk Seri Najib Razak or his wife Rosmah.

“You must be mistaken. There is no such client, and please delete any such email from your servers or systems and we will do the same, because we do not want any communication of such nature,” Tan stressed in the email which came on the heels of Rosmah’s interest in a US$8 million diamond ring that she had viewed earlier.

In 2010, Rosmah had allegedly bought US$425,000 worth of bracelets and watches in cash from Jacob & Co, and two years later in 2012 when the jeweller was said to have added some diamond jewellery to the locks of pre-owned handbags at a cost of US$1.2 million.

Tan, through several companies he controlled such as Alsen Chance Holdings Ltd, paid for some of the jewellery. Some jewellery bought from Michael Greene & Co, was also made through Alsen Chance as indicated by the DOJ. Some of the jewellery and handbags were identified by the American witnesses in their testimony when shown pictures taken by the Malaysian police.

Nearly 12,000 pieces of jewellery and hundreds of handbags were seized during the May 2018 police raid, some of it now the subject of discovery applications as mentioned above.

During the forfeiture proceedings between 2018 and 2022, police carted out 14 huge plastic boxes containing pictures of the luxury goods which were kept in Bank Negara vaults after the raid.

However, following a failed forfeiture application at the High Court, and no filing of an appeal over the High Court decision, those valuables were returned to Rosmah and Najib.

According to an affidavit in support by Kroll Advisory Ltd’s director of investigations, Richard Templeman, the misappropriation of 1MDB and its units funds, took place over five phases: Good Star, Aabar, Options Buyback, Tanore and SRC International.

Templeman, who specialises in financial crime investigation and fraud, said based on his investigations the funds misappropriated during these phases were channelled through various intermediaries through a set of coordinated and sham transactions and were ultimately received by eight offshore paying entities.

“The offshore paying entities made payments to the vendors for the purchase of luxury goods. The first defendant (Rosmah) ultimately received many of these luxury goods,” Templeman said in the court documents.

According to the 515-page SOC and 413 pages of Templeman’s affidavit, the list of luxurious items were bought from 14 different countries or jurisdictions and paid to 48 different vendors.

A total of 320 transactions or payments were made by these eight offshore paying entities to the vendors.

“The eight entities registered in offshore jurisdictions made 320 payments totalling US$346.01 million to 48 different vendors of luxury goods based in no less than 14 jurisdictions and were received by the first defendant (Rosmah),” the SOC said.

“These payments are traceable to and/or represent the monies misappropriated from 1MDB and its four subsidiaries and SRC International, that is, the funds misappropriated between 2010 and 2014.”

The 14 countries or jurisdictions where the luxury items were traced from and the list of 48 vendors are: British Virgin Islands (one), Hong Kong (nine), India (four), Indonesia (two), Italy (three), Lebanon (three), Mauritius (one), Panama (one), Singapore (one), Thailand (two), United Arab Emirates (seven), Türkiye (two), the UK (two) and the US (seven).

There are three vendors whose country of origin are yet to be determined.

1MDB and SRC in their SOC said the eight entities that received 1MDB funds and that paid the vendors for the valuables brought by Rosmah served no legitimate purpose and carried no legitimate commercial endeavours but only served as conduits for the laundering of the funds and that some of them were under the direction, control or beneficial ownership of individuals associated with the fraud.

The SOC named some of the fiduciaries and/or trustees as Najib, fugitive businessman Jho Low and his father Tan Sri Larry Low Hock Peng.

Both Jho Low and Hock Peng have left the country since 2018 and their whereabouts are unknown.

The eight entities named in the SOC that acted as payment conduits are Aabar Seychelles, Affinity Equity International Partners Ltd (Affinity), Alsen Chance Holdings Ltd, Blackrock Commodities Global Ltd, Blackstone Real Estate Partners Ltd, Brightstone Jewellery Ltd, Good Star Ltd and World Merit Management Ltd.

Aabar made two transactions and paid two vendors US$1.747 million, Affinity (two transactions paid to two vendors a sum of US$2 million), Alsen Chance (88 transactions paid to 30 vendors for a sum of US$79.437 million), Blackrock (99 transactions paid to 23 vendors a sum of US$149.403 million), Blackstone (four transactions to four vendors a sum of US$4.712 million), Brightstone (120 transactions to 23 vendors to a sum of US$97.483 million), Good Star (four transactions to three vendors to a sum of US$7.125 million) and World Merit (one transaction to one vendor for US$4.1 million), the court documents stated. 

According to the SOC, Rosmah would purchase or procure the luxury goods herself or through agents or proxies including the second defendant, Shabnam Naraindas Daswani @ Natasha Mirpuri, a Singaporean.

“They would contact the vendor for the purchase or procurement of one or more of the luxury goods, [then] Rosmah or Mirpuri or their agents would select the luxury goods intended to be purchased.

“Alternatively, the vendor would deliver a number of luxury goods like jewellery for Rosmah to select the luxury goods intended to be purchased and thereafter return the unselected luxury goods. Once the goods in question are selected, Rosmah’s agents or proxies including Mirpuri would instruct the vendor to issue the invoice or obtain payment from one or more of the offshore paying entities,” it added.

In such a scenario, the legal document said either Rosmah or Mirpuri or their agents would collect, receive or accept delivery of the luxury goods from the vendor.

It is to be noted that the second method — the delivery of luxury goods for viewing and selection — is stated in an ongoing lawsuit against Rosmah by Lebanese firm Global Royalty Trading SAL.

1MDB and SRC are claiming unjust enrichment, knowing receipt of trust property, vindication of property rights and constructive trust to the return of those luxury goods that amount to more than 13,000 valuables that comprise more than 12,000 jewellery items, more than 400 handbags, more than 400 luxury watches and more than 230 luxury spectacles.  Alternatively, the plaintiffs are seeking repayment of an equivalent amount.

“These items of jewellery, watches and bags are, or form part of, the luxury goods purchased with payments made by the offshore paying entities,” it said.

“Rosmah’s receipt of the luxury goods is apparent from the seizure by the police from the Pavilion residence on May 17, 2018 pursuant to the forfeiture proceedings.”

Some items of jewellery, watches and bags were returned to her on April 24, 2022 and Aug 28, 2022 as she claimed they were wedding gifts or gifts given by dignitaries, and the remainder following the forfeiture judgment against the government at the end of 2022.

On June 14, Rosmah gave an undertaking to the High Court without admitting liability and pending confirmation, that she would not dispose of the purported US$346.01 million worth of luxury goods that are said to be linked to 1MDB and SRC International.

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's App Store and Android's Google Play.