Arrests Over 1MDB Threaten To Open A Kuwaiti Can of Worms

Arrests Over 1MDB Threaten To Open A Kuwaiti Can of Worms

Warrants issued last night duly resulted in the arrest today of one of of Kuwait’s most prominent royal sheikhs, Sabah Jaber Al-Mubarak Al-Sabah (Sheikh Sabah).

Hamad Al Wazzan (left) and Sheikh Sabah

Hamad Al Wazzan (left) and Sheikh Sabah

He was picked up around 10am Kuwait time, together with a business associate Hamad Al Wazzan, best known for his links to the 1MDB financier Jho Low and also the Sheikh’s personal lawyer, Saud Abdelmohsan, who managed the bogus Cayman Island subsidiary Silk Road Southeastasia Real Estate Limited that purportedly channelled  1MDB kickbacks from Malaysia.

The men are currently being questioned after the Amir of the state reportedly refused to intervene on behalf of Sheikh Sabah, a royal relative and the son of Kuwait’s former prime minister, Sheikh Jaber al-Mubarak al al-Sabah, who resigned amidst corruption allegations in November.

They are expected to remain in custody over the weekend to respond to enquiries about apparent 1MDB related kickbacks from Chinese state construction companies that were laundered through companies, including Silk Road Southeastasia, connected to Sheikh Sabah in Kuwait.

Saud Abdulmohsen, lawyer and company manager for Sheikh Sabah

Saud Abdulmohsen, lawyer and company manager for Sheikh Sabah

Sarawak Report exposed the scandal through a series of articles beginning in May. However, as news is exchanged around Kuwait the connections between the 1MDB affair and the as yet unresolved issues that brought down the prime minister in November are starting to be explored.

Topping the list are kickback allegations relating to the newly completed Al Jabe al-Ahmad Al-Sabah Causeway, which is one of the longest bridges in the world built by the South Korean company Hyundai.

There is also the matter of a staggering civil law suit filed last year in the United States, where the former Kuwait defence minister and close political associate of Sheikh Jaber al-Mubarak alleged he was deceived out of a $160 million payment for a house in Beverley Hills by someone who turned out not to be the title holder. Of more interest to Kuwaitis is how this politician obtained the huge sum of money of which he was defrauded in the first place, since many considered him a proxy for his political boss?

The $160 million civil suit has been the focus of a discreet investigation into the conduct of this former defence minister, Sheikh Khaled Al-Jarrah Al-Sabah, who was replaced by the eldest son of the Amir, Sheikh Nasser Sabah al-Ahmad al-Sabah, two years previously.

Sheikh Nasser is regarded as an anti-corruption reformer and he was looking into alleged massive misappropriations of defence ministry money under his predecessors, which people with knowledge of those investigations say involved the transfer of large sums of money into the London branches of three major Kuwaiti banks into accounts opened officially in the name of the Ministry of Defence.

Inadequate records were filed back to Kuwait on the use of these sums, the sources say, and Sheikh Nasser became concerned there was evidence that up to a billion dollars flowed out into private accounts over the course of a decade of transactions that also involved two major UK banks.

There is compelling evidence, according to a complaint that was eventually filed in November last year by Sheikh Nasser, that it was money from this source that was used to buy the bogus $160 million mansion in Beverley Hills. The accusation was denied by Sheikh Khalid but it appears to have provoked the major crisis that upturned the government.

Sheikh Nasser was himself forced by his father to resign, but prime minister Sheikh Jaber al-Mubarak al al-Sabah also tendered his resignation and Sheikh Nasser went public with allegations that the reason lay in the corruption allegations regarding those misappropriations from the Ministry of Defence.

Open corruption allegations between royal sheikhs caused the collapse of the Kuwaiti government in November 2019

Open corruption allegations between royal sheikhs caused the collapse of the Kuwaiti government in November 2019

At the heart of the issue were the known close ties between the outgoing PM Sheikh Jaber Mubarak and the former defence minister Sheikh Khalid, who had succeeded  Sheikh Jaber into this position that he himself had occupied before becoming prime minister in 2011. The alleged plunder of the military aid fund supposedly began in 2009.

Interestingly, Sheikh Khalid had moved to become Minister for the Interior after being replaced at defence by Sheikh Nasser who began the investigations. The Ministry of the Interior was to act as the key agency when it came to the investigations started into Sheikh Sabah’s involvement in 1MDB initiated by Malaysia in 2018.

Under Sheikh Khalid the Ministry of the Interior effectively shut down those investigations into the son of his political ally and Malaysia was informed there was no case to answer by Kuwait in December 2018.

New 1MDB Whistleblower Revelations Re-Opens Scrutiny

With the main protagonists removed by the end of last year and the case against Sheikh Sabah closed regarding the laundering of Jho Low’s money many in Kuwait had feared the corruption concerns might face cover-up.

However, Sheikh Sabah had alienated and allegedly persecuted a former key business associate namely Bachar Kiwan, following the collapse of their three decades long business partnership. Following numerous criminal charges brought by Sheikh Sabah Kiwan was sentenced to 35 years in jail, but escaped Kuwait.

Taking refuge in Paris Kiwan has spoken out about what he now acknowledges was a corrupt relationship with Sheikh Sabah and his family, including the prime minister and brother Sheikh Fahd Jaber Al-Mubarak Al-Hamad Al-Sabah who held the position as the government’s chief of staff.

Sarawak Report exposed how companies owned by Sheikh Sabah together with Bachar Kiwan agreed to launder money and facilitate cash flows for the wanted Malaysian fugitive Jho Low, even after he had been named by the United States Department of Justice as the perpetrator of numerous billion dollars thefts from 1MDB on behalf of Malaysian prime minister Najib Razak.

Their company Al Waseet acted as a front, for example, to enable the sale of Jho’s stake in the New York Park Lane Hotel bought with 1MDB money to China’s Greenland property group. Kiwan has also documented how hundreds of millions of dollars of Chinese yuan were passed into the ICBC bank account of another company owned by the two men in 2016, namely Komoros Gulf General Trading and Construction Company Limited in Kuwait, which represented kickbacks for inflated contracts awarded to Chinese companies in Malaysia by Najib.

Much of the money was used to pay Jho Low’s creditors, including the US law firm Kobre & Kim and the UK reputation lawyers Schillings, who sought to prevent the publication of the book The Sarawak Report and another publication about 1MDB.

Sarawak Report has also gained evidence that further billions connected to Jho Low and Chines kickbacks for the East Coast Rail and gas pipeline contracts were laundered through separate companies opened by Sheikh Sabah in 2017. A co-signatory on one of those accounts was the Kuwaiti citizen Hamad Al Wazzan, who has been widely publicised as a long term college friend of Jho Low, thereby cementing the apparent link between the Malaysian and the Sheikh.

Telling line up (left to right) Bachar Kiwan, Majd Suleiman and Sheikh Sabah the main partners in Al Waseet, plus Jho Low and college friend from Kuwait Hamad Al Wazzan

Telling line up (left to right) Bachar Kiwan, Majd Suleiman and Sheikh Sabah the main partners in Al Waseet, plus Jho Low and his Wharton college friend from Kuwait, Hamad Al Wazzan – forging relations in Kuwait February 2016

The revelations regarding the Al Waseet partners’ involvements with Jho Low appears to have re-opened with a bang in Kuwait the corruption concerns of late last year. Ironically, recent representations by the new Kuwait authorities to Malaysia’s current unconfirmed backdoor regime for further information on the case have now themselves been rebuffed.

However, following these arrests the Kuwait authorities have announced they will investigate corruption no matter who is responsible.

Another crucial link between the recent 1MDB Kuwait exposes and existing cases appears to be the published role played by the same Al Waseet in receiving kickbacks from the South Korean engineering giant Hyundai for the contract to construct the Al Jaber causeway in Kuwait, itself completed just last year.

The Sheikh Jaber Al Ahmed Causeway constructed by Hyundai

The Sheikh Jaber Al Ahmed Causeway constructed by Hyundai

According to a complaint issued by Bachar Kiwan in 2018 the government of Sheikh Jaber al-Mubarak al al-Sabah had raised complaints and suspended the project amidst bogus concerns about Hyundai’s ability to complete the project in order to secure a 10% kickback of some 73 million Kuwait dinars (over US$200 million) that, according to Kuwait was paid into Al Waseet accounts in the name of a series of bogus construction projects.

From a complaint by Bachar Kiwan to the Kuwait authorities in 2018

From a complaint by Bachar Kiwan to the Kuwait authorities in 2018

An alleged affidavit has also been circulated by an apparent Hyundai executive on the project testifying to the fact the company was forced to make the payment to retain the contract.

Such matters and allegations will doubtless be explored alongside the apparent related issues of money laundering Jho Low’s stolen millions and it is clear that anti-corruption activists in Kuwait are seeking to highlight not only the role of the businessman son of the ex-prime minister but also the alleged involvement by his wider family in wide-scale top-level corruption by the previous government.

Alleged affidavit by a Hyundai executive whose name has been redacted released by anti-corruption campaigners in Kuwait

Alleged affidavit by a Hyundai executive whose name has been redacted released by anti-corruption campaigners in Kuwait

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