KUALA LUMPUR (Oct 13): 1Malaysia Development Berhad (1MDB) claimed it does not possess the global settlement agreements between the US Department of Justice (DOJ) and fugitive Low Taek Jho (Jho Low) and has no access to the statement of accounts, which is protected under the Official Secrets Act (OSA).

1MDB's legal counsel Datuk Lim Chee Wee asserted this on Monday during the hearing of 1MDB's US$6.59 billion civil suit against former 1MDB president and CEO Arul Kanda Kandasamy.

Arul Kanda has filed a discovery application in the High Court within the context of that suit, seeking the 2019 and 2024 DOJ-Jho Low settlement deals, along with records of money recovered by the Malaysian government, which he claims are important for his defence.

Arul Kanda argued that 1MDB should have disclosed the settlement agreements, noting they were made without any admission of guilt. He said 1MDB relied on the DOJ’s forfeiture actions to claim money was misused but failed to reveal that those cases were settled.

Lim, however, said the documents Arul Kanda is seeking are related to matters of international relations and have been expressly designated by the government as protected under the OSA. During submissions involving the application on Monday before judge Datuk Raja Ahmad Mohzanuddin Shah Raja Mohzan, Lim said 1MDB is not in a position to disclose the documents.

“The chairman of 1MDB and secretary general of the Ministry of Finance Malaysia have confirmed in affidavits that it’s not in their (1MDB’s) possession,” Lim said.

Lim further said the documents are not in 1MDB's possession because the company was not a party to the settlements, as the agreements were not made on a government-to-government basis but between the US DOJ and the Low family.

While linked to the government, 1MDB is a “separate legal entity”, Lim said, adding Arul Kanda’s lawyers as trying to turn “the law on its head” by demanding they produce the documents.

Arul Kanda’s lawyer, Sanjay Mohan, disagreed with Lim’s assertion that the documents are under the OSA and that 1MDB is not privy to them. “All we are saying is that you (1MDB) have received more and more money, account for it. They don’t want to account for it. Now they say it falls under the ambit of OSA.”

Sanjay argued that the Ministry of Finance and associated agencies would have been informed of, and would be privy to, the settlement frameworks with the US DOJ or other entities, given that the alleged loss is that of 1MDB.

Sanjay also contended that 1MDB, as the plaintiff in this suit, is “suppressing relevant information and documents in its possession” because it fears disclosure would lead to the dismissal of its case against Arul Kanda.

Sanjay further pointed out that the documents allegedly under the OSA are public knowledge, having been referenced in the news via various government-linked official press statements. “This information is in the public domain. If it is under OSA, how come it’s coming out in the news?” he asked.

Lim also argued that the settlement agreements Arul Kanda is seeking are immaterial because the misappropriation and fraudulent diversion of funds happened at a time when Irwan and Arul were in 1MDB.

“If anything, it further reinforces 1MDB’s position that Arul and Irwan ought to have undertaken investigative and recovery measures at the time,” Lim said.

He also claimed that the discovery application was just a “fishing expedition”.

“They (Arul and Irwan) have failed to identify with any degree of precision a specific document within the plaintiff’s (1MDB’s) possession, custody or power,” Lim said.

Sanjay rebutted this, asserting that their application was not a fishing expedition. “We’re saying that this information is in your possession and you’re obliged to provide it. You cannot hide behind it and say you can’t disclose it. Why the reluctance to show the proof?”

Irwan’s lawyer, Lavinia Kumaraendran, clarified that the parties are not seeking a breakdown of funds, but rather, the total figure of the settlement.

Sanjay and Lavinia both pointed out that the third plaintiff witness, Afidah Azwa Abdul Aziz, 49, who is part of the Ministry of Finance's Strategic Investments Division and the current director of 1MDB, had testified previously that 1MDB still had an overdue debt of RM26.29 billion, including RM9.312 billion for the coupon payments of the IMTN that will mature on May 27, 2039.

Lavinia argued for Irwan that throughout the proceedings, 1MDB and Lim’s team had relied on the DOJ civil forfeiture actions; however, they did not disclose those actions when they filed the claim in 2021.

Irwan is also supporting the application for discovery in seeking the documents. He asserts that they are relevant and material to the determination of the trial and ought to be disclosed in the interest of justice.

Lavinia said the plaintiffs had not disclosed that there had been a settlement of the very sum of US$700 million which was alleged to have been misappropriated by Jho Low in 2019 prior to this suit in 2021.

She said that they had failed to inform the court that there was a settlement.

She said that if the sum has already been returned, then her clients shouldn’t be liable for the sum.

Lavinia told the judge that Lim can give the sealed documents to the judge for him to make a determination on whether the information is relevant to the case.

“We just want to know how much was repatriated by Jho Low to the US DOJ, what was the settlement, and was it an admission as to no guilt,” she said.

Lavinia suggested to Justice Raja Ahmad that he can take the document and redact parts he deems fit and only show parties the relevant information they are seeking.

She said that the judge can make a protective order to do so.

Following Monday's submissions, Raja Ahmad set Nov 4 to deliver his decision on the matter.