Clownish Distraction? 1MDB/SRC's $23 Billion Legal Claim Reaps Ridicule In KL

Clownish Distraction? 1MDB/SRC's $23 Billion Legal Claim Reaps Ridicule In KL

Once again PM Mahiaddin’s personal libel lawyer Rosli Dahlan is at the helm of the latest eye-catching legal action by 1MDB.  His suits, publicised over the weekend, smack of a classic genre favoured in Malaysia – swaggering demands based on threadbare grounds.

Rosli and his team are loudly proclaiming the support of their top client, their strongest card in the bully boy game they plainly aspire to play.

“The suit was signed off by the Attorney General. 1MDB is a wholly owned subsidiary of Ministry of Finance Incorporation (MOFI). The Prime Minister supported the suit. He knew about the suit”

was how one of the team of litigants described the situation to a questioner this week.

In the meantime they have announced they are suing everything but the kitchen sink – a total of 2o separate civil suits demanding no less than $23 billion from the variety of banks, individuals and entities who were caught up in 1MDB.

However, the glaring weaknesses in these cases and in the entire legal strategy itself has had many of the more experienced practitioners of the Malaysian bar sniggering dismissively in private – “clownish and inept” was how one summed it up to Sarawak Report:

“they are living in hope of being able to bully a quick settlement out of institutions who want to make them go away given their big name client. Also, of course, it’s a distraction from the other cases that they’ve messed up”.

Those other cases include the law suit against IPIC, which the coup government rushed to pull out of open court in the UK, apparently in order to spare the blushes of the Abu Dhabi princes (friends of the present Agong) who were involved up to their necks, first in the thefts from 1MDB and then in the fraudulent arbitration settlement negotiated by Najib to cover the whole thing up.

Having claimed they would negotiate a settlement out of court (thanks to friendly royal relationships) Mahiaddin’s legal team have clearly waded well out of their depth in their attempts to get money from Abu Dhabi.  Not so long ago Rosli was boasting that a billion dollars was coming Malaysia’s way, but a year on the London case still on ice and not a bent shekel has been obtained in compensation.

After all, by dropping the fraud case the PN’s Attorney General had surrendered Malaysia’s main bargaining chip and put Rosli’s team of negotiators back at the beck and call of the Abu Dhabi potentates, who have already received at least $500 million in kickbacks ($160 million of which went towards a yacht for Prince Mansour) and a further $1.02 billion more of Malaysian borrowed money via a corrupt actor in Kuwait in 2017.

The conduit in the latter case were the bogus pipeline contracts with China that were ultimately designed to give the appearance that 1MDB had sold land to pay back IPIC for clearing debt repayments that had threatened to expose the entire affair.

On top, the ‘settlement’ that the desperate Najib then negotiated with the Gulf Emirate committed Malaysia to pay Abu Dhabi a further $5.8 billion in return for its kind services in covering up the matter. Instead of reversing this and getting proper recompense, Mahiaddin’s lawyers have suspended the London fraud case and allowed all hopes of compensation to run into the Arabian sands.

Hence the big noise distraction?

Mega-Law Suit!

Rosli and his mates appear to be basing their plan to bully billions from some of the world’s top financial players and a handful of individuals who clearly haven’t got the money on what they tout as their ‘triumphs’ in settling with Goldman Sachs and the local AmBank plus local branch of Deloitte.

In fact, the Goldman Sachs deal was a snitch for the American bank who were being roasted for a whole lot more before the PN crew snatched office and went for a cheap and easy cut-price deal. Separately, AmBank was vulnerable to bully tactics and minor shareholders are furious the matter was settled behind closed doors in crony circles rather than being fought in court.

It doesn’t mean Rosli is going to find it as easy as he appears to think to repeat his ‘class act':

These lawyers aren’t the sort you hire to plead in front of a judge. Their business is the settlement game.  Except, why should the likes of Deutsche Bank, JP Morgan Suisse and Wong &Partners (part of the world’s largest legal firm Baker & McKenzie) buckle to such nonsense?

observes one senior KL legal practitioner.

It is not only that the sums being asked are so preposterous but that the plaintiffs are in such a weak position to demand them of such targets. Both the banks and legal firm were only caught up in 1MDB, after all, because of the actions and the lies made to them by the plaintiffs themselves namely 1MDB and SRC.

“What you have is the fraudsters themselves bringing legal action against the parties they defrauded and lied to, in order to get more money out of the victims themselves. Any judge will dismiss such nonsense.” 

is how one senior KL lawyer described the situation to Sarawak Report.

The litigation itself ironically makes the very same point, in that the large number of individuals being simultaneously sued by 1MDB as part of this overall action are former Directors, CEOs, CFOs and ‘advisors of 1MDB/SRC themselves.  What clearer admission could there be from the plaintiffs that the main crooks in this affair were indeed 1MDB and SRC, the very institutions who are now suing?

The methods by which these officials deceived and lied on behalf of 1MDB/SRC to get past the anti money laundering efforts of both Deutsche Bank and JP Morgan (inadequate as both plainly were) are detailed mercilessly for all to see in the DOJ filings of the civil asset seizure case lodged in the United States under a section titled:

“FALSE REPRESENTATIONS TO BANKS CAUSING $700 MILLION DIVERSION FROM 1MDB TO THE GOOD STAR ACCOUNT”.

The segment lays out how a swathe of Malaysian officials from the funds lied to the banks to justify why no less than $700 million of borrowed money was being funnelled to the Jho Low owned company Good Star Limited for example, claiming it was a repayment owed to PetroSaudi. A straight lie that the banks failed to identify and for which both have been punished to a lesser or greater degree already by their regulators:

59. As set forth below, members of 1MDB’s Senior Management Team, including 1MDB OFFICERS 1 and 2, made material misrepresentations and omissions to Deutsche Bank officials in order to cause Deutsche Bank to divert $700 million of 1MDB’s funds to the Good Star Account.

60. On or about September 30, 2009, a letter signed by 1MDB OFFICER 1 was delivered “BY HAND” to Deutsche Bank in Malaysia instructing the Bank to transfer (i) $300 million to an account at J.P. Morgan (Suisse), S.A. in Switzerland (the “$300 million wire transfer”) and (ii) $700 million to an account at RBS Coutts in Switzerland (the “$700 million wire transfer”). The instructions specified the account numbers for the two destination accounts but did not identify account names or beneficiaries.

….In an email dated September 30, 2009, at 1:09 p.m., a 1MDB official represented to a Deutsche Bank employee (the “Deutsche Bank Employee”), that the “beneficiar[y]” of the $300 million wire transfer was the Joint Venture and the “beneficiar[y]” of the $700 million wire was PetroSaudi. In that same email, the 1MDB official indicated to Deutsche Bank that, “[i]n order to avoid any unforeseen circumstance, we are not incorporating the name of the beneficiary in our instruction letter and please follow our instruction according.”

…On September 30, 2009, at approximately 2:39 p.m., the Deutsche Bank Employee, a Deutsche Bank supervisor (“Deutsche Bank Supervisor”), and 1MDB OFFICER 1 had a telephone conversation regarding the requested $700 million wire transfer. During this conversation, 1MDB OFFICER 1 falsely represented that the beneficiary of the $700 million wire was PetroSaudi. In truth, the beneficiary of the wire was Good Star.

….. Thereafter, at approximately 7:51 p.m., 1MDB OFFICER 2 emailed the Deutsche Bank Employee and 1MDB OFFICER 1 with authorization to disclose to RBS Coutts that the beneficiary of the $700 million wire was Good Star. However, 1MDB OFFICER 2 misrepresented the nature of the relationship between Good Star and PetroSaudi. Specifically, 1MDB OFFICER 2 stated: “This payment was for beneficiary ‘Good Star Limited’ in their SWIFT. Good Star is owned 100% by PetroSaudi International Limited.”

Given such evidence of gross misrepresentation on the Malaysian side and given the corroboration by 1MDB itself of that fraudulence by taking simultaneous action against these former employees, it is hard indeed to understand why these large German and US institutions would bother to come to KL and negotiate with such a blatant attempt at legal hijacking, let alone pay even a fraction of the demanded $5 billion to a government largely made up of politicians who supported the heist and then tried to cover it up at the time?

Statement by Wong & Partners (Baker & McKenzie) - who will fight the action which "has no merit"

Statement by Wong & Partners (Baker & McKenzie) – who will fight the action which “has no merit”

Wong & Partners have already issued its own statement on the matter, determining that the case has no merit in their estimation. After all, they can demonstrate they were baldly lied to by their clients, the ones who are now suing them for believing them at the time.

That the global legal eagles from Baker & McKenzie are likely to provide a daunting challenge for Mahiaddin’s team of Malaysian chancers, is the general consensus should it ever get to court.

And Wong & Partners have made clear they intend to test the metal of this case out in the open instead of behind closed doors on behalf of “powerful clients”.

Indeed they spelt out their view of the blackmail tactics in their public statement yesterday:

“We firmly believe the Plaintiff’s case is without merit and has no basis in fact and law. As such we will vigorously defend the firm against these baseless allegations … the extraordinary sum [$1.7 billion] claimed is wholly unjustified and an attempt to pressure the Firm into a settlement”

The firm has, like Deutsche Bank, also drawn disapproving attention to the headline-seeking nature of the action as a whole.

The details of the case were all slipped out over the weekend via a crony publication which it was spuriously claimed had beaten its rivals to spotting court papers lodged over the weekend. Except, the papers were still not on the system say lawyers who checked on Monday several hours after the story had been published.

Nor had even the defendants in the case been notified of any plans to pursue civil action against them as both Wong & Partners and Deutsche Bank have now confirmed. Speaking to baffled enquiring journalists one of the litigation team yesterday said “There is no documentation. It is all under lock and key… I am under a duty not to share documentation. But, The Edge document is accurate.” 

The insider went on to admit the extent to which the case is just a ruse with these astounding words:

“The financial numbers are the money that left 1MDB. At the end of the day there will an accounting judgement to ensure no double recovery. 1MDB will not be allowed to double triple claim from the same breach. Various people have a role in moving each separate funds transaction so there will be an accounting to ensure there is no double or triple accounting. Each party has been charged for the entire amount of theft.”

In other words, numbers are being thrown around to see what 1MDB can bully out of all these parties in the acknowledgement the plaintiffs are double and triple counting all along.

The laziness and ineptitude of such grandstanding nonsense has been pinpointed by lawyers in one damning example of flawed legal reasoning, which has allowed even former prime minister Najib Razak to describe himself as ‘persecuted’ with a level of legitimacy. As one outraged top lawyer has explained to Sarawak Report:

“The criminal case has already found Najib guilty over SRC and he has received the maximum penalty allowed under criminal law in terms of fines, which is 5 times the amount stolen, namely RM210 million. In a civil case, which SRC is now repeating against Najib they could only at most achieve the RM42 million at issue, but this is double jeopardy! You can’t sue the same case twice and now they are chasing the lesser amount. It is sheer legal ineptitude and incompetence”

The case against Najib must be the first to go say disdainful professionals but the rest of this grandstanding nonsense also looks destined to be a short lived show with few pennies likely to be gained save from the assets of individuals who can’t defend themselves in KL.

Those names have not been officially published but you can get them from The Edge and they have been brandished around the world accordingly. They include Jho Low and his family and friends, also pursued for the same set of billions but who remain, of course, well out of reach of the Malaysian legal action behind the Great Wall of China.

As for the IPIC case?  Well, it seems these lawyers having lost control of that are at least hoping this new “$23 billion” treasure hunt might provide a welcome distraction.

In answer to enquiries the insider from the Rosli legal camp admitted exactly what Sarawak Report has long been warning of:

“IPIC is still on the table. Not reaching fruition. It is under discussion now”

In short, PN’s cozy lawyers have thrown away the bird in the hand for a multitude in the bush, which are all well armed with sharp beaks and wings.

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