US to return $200m in 1MDB funds to Malaysia

:: Peoples Time Online ::

US authorities have so far transferred $57m tied to a Hollywood firm accused of using 1MDB funds to finance films. It will send another $139m linked to the sale of a Manhattan property allegedly bought with 1MDB funds.Billions of dollars from 1MDB – officially the 1Malaysia Development Berhad fund – have gone missing. Set up in 2009, the sovereign wealth fund was designed to boost Malaysia’s economy through strategic investments. 

But US authorities say $4.5bn was diverted from 1MDB into private pockets, and they have been investigating the corruption scandal.According to US and Malaysian prosecutors, the money was used to buy assets including luxury real estate, a private jet and expensive artworks.

Prime Minister Mahathir Mohamad, who defeated Najib in a shock election result last year, is working with at least six countries to recover about $4.5bn it says was stolen from 1MDB.The tranche of money being returned by the US includes $140m from the sale of a stake in New York’s Park Lane Hotel, after it was given up by fugitive financier Low Taek Jho, known as Jho Low, the two sources said.

Jho Low, the alleged mastermind behind the looting of 1MDB, is wanted by the Malaysian authorities to face criminal charges. Low, whose whereabouts are unknown, has denied wrongdoing.Malaysia has also filed criminal charges against Goldman Sachs for its role in raising money for 1MDB. The investment bank says it conducted correct due diligence.

On Tuesday, US ambassador to Malaysia, Kamala Shirin Lahkdhir, told Reuters: “We are extremely pleased that this first tranche of assets from this Justice Department investigation is being transferred back to Malaysia, demonstrating the US commitment to return these assets for the benefit of the people of Malaysia,”The $57m remitted so far relates to a settlement reached with US film production company Red Granite Pictures, Malaysia’s Attorney General Tommy Thomas said in a statement.

The film production company settled a civil lawsuit with the US government over rights to blockbuster The Wolf of Wall Street. According to Reuters, US authorities say the film was financed with 1MDB funds.1MDB was set up by Malaysia’s then-prime minister Najib Razak, but red flags were raised in 2015 after it missed payments owed to banks and bondholders.

Najib faces more than 40 charges and has gone on trial for his role in a financial scandal. He has pleaded not guilty.He is accused of pocketing $681m from 1MDB. Prosecutors said the money had been used to fund a lavish lifestyle for the former PM and his wife Rosmah Mansor, who is also facing charges of corruption.

Peoples Time/HG

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