Friday, February 19, 2016

Lining Up The Next Scapegoat...... To Take The Blame For 1MDB?

Lining Up The Next Scapegoat...... To Take The Blame For 1MDB?

Lining Up The Next Scapegoat...... To Take The Blame For 1MDB?

18 FEB 2016

The Malaysian Prime Minister has demonstrated that he has no problem with altering his narrative once the previous line has been shown to be unsustainable or untrue.  At which point his cohorts gather round to chant the “new reality”.
And it is becoming clear that the moment is fast approaching for just such a change of gear over 1MDB.
After all, for the past year the Prime Minister and his spokesman at the company, Arul Kanda, have maintained that there has been no problem whatsoever with the fund.  Categorically, no money was siphoned out to third parties like ‘Special Advisor’ Jho Low.
Senior figures have been sacked and lesser people have been arrested and worse for suggesting otherwise in Malaysia.
However, the international community has now started looking at this matter, given the humungous sums involved.  Swiss, Singaporean and US authorities, in particular, already have all the evidence they need to show that money was taken out of 1MDB – the figure mentioned by the Swiss AG is at least US$4 billion.
There are responsible parties abroad (like banks) which are therefore being investigated for their facilitation of this theft across these jurisdictions and beyond.  And, since Najib is not able to put this wider genie back in the bottle, by shutting down, sacking or arresting these foreign investigators, he will need a different tactic.
Speculation in KL is that he will soon turn, therefore, to an increasingly well-worn device – and find another scapegoat to take all the blame off the man at the top. The obvious sitting duck in this respect is the former 1MDB CEO, Shahrol Halmi, who of all the original inner circle remains the only one still in town (the rest fled months ago).
In charge during all the hanky panky!
In charge during all the hanky panky!

Is Shahrol the fall guy?

Halmi was allowed to be interviewed by the Parliamentary Accounts Committee during its final session last week, before the new Chairman installed by Najib announced the sudden early closure of its investigations into 1MDB.
He is believed to have emerged sanguine over his performance, whereas others more suspicious of Najib have presumed that he merely confirmed on the record that his finger-prints – or more to the point his signatures – are all over over 1MDB’s dubious dealings from start to finish. Ooops.
Shahrol's colleagues are on the run....
Shahrol’s colleagues are on the run….
Sharhol Halmi was the original CEO of the ill-fated fund, taking up his position in May 2009 and steering its management right up until March 22nd 2013.  This is an interesting date, because March 21st was the day that the first tranche of US$620 million was paid into Najib’s AmBank account from Aabar owned Falcon Bank in Singapore.
The remainder of the RM2.6 billion came in a couple of days later.
It means that ALL the questionable deals under investigation relating to 1MDB, from the initial PetroSaudi heist, through to the Cayman Island sham and on through the so-called ‘power purchase’ and ‘strategic partnership’ deals with the rogue Abu Dhabi fund Aabar, were signed off by Shahrol Halmi.
Yet, whilst others, like SRC boss and 1MDB Chief Investment Officer Nik Kamil, have high-tailed it out of KL, Shahrol has remained, apparently sensing that he is in a safe position in his new post right inside the PM’s office heading up the so-called ‘performance unit’ PERMANDU.
To others, whispering in KL, he is more a fly in the spider’s parlour, waiting to be gobbled up.

Changing stories and the developing blame game over 1MDB

It’s not hard to see why Halmi looks increasingly endangered, despite his appearance of being powerfully protected.
The task forces dug up who was really in charge of 1MDB and more!
The task forces dug up who was really in charge of 1MDB and more!
When the scandal first erupted,  Najib had responded wide-eyed to suggestions that money had been siphoned out of the struggling 1MDB by his close friend Jho Low.  Confidently, he announced that Low had had no role at all in 1MDB and that he himself had only a distant over-view, merely as Chairman of the Board of Advisors.
So confident was the Prime Minister that he allowed the various regulatory bodies involved to set up investigations – four task forces were appointed in all and it appears that Najib reckoned he could control their activities sufficiently to close down the scandal soon.
However, it did not turn out that way, as investigators started to bring out more and more damning information. It emerged, for example, that far from being a distant overseer of 1MDB, Najib was in fact the sole shareholder and sole signatory of the fund – and therefore the final decision-maker on its every activity.
An email (below) from 1MDB’s own lawyers at Wong Partners to PetroSaudi’s legal counsel at the signing of the joint venture, illustrates Najib’s controlling position clearly (see Section 4 relating to the banking Form A, stating the beneficial owners of the JV for the relevant Bank Accounts).
Shahrol Halmi may have been the authorised signatory on the account, but he answered to Najib:
From: Lim, Jo Yan [mailto:Jo.Yan.Lim@WongPartners.com]
Sent: 30 September 2009 08:48
To: Buckland, Timothy
Cc: Broke, Philip; Reynolds, John; Rimmer, James; Patrick.Mahony@Petrosaudi.com; KL, Filing Asst16 AAR; Yong, Jonathan; Chia, Brian; Shahrol Halmi; Casey Tang; Kelvin Tan
Subject: RE: Funding/ Completion Instructions and Documentation
Dear Tim,
I am writing to tie up some loose ends:
  1. Letter Agreement
Please find attached a pdf copy of the execution page of the Letter Agreement to amend the Joint Venture Agreement. Could you please extend us a pdf copy of the executed pages by PSI and the JV Company for our record, and let us know where to send the original signing page.
  1. Bank Remittance
Please also find attached pdf copies of the bank remittance slips for the transfer of funds today, for the subscription of shares in the JV Company.
Could you please arrange for the 1,000,000,000 shares in the JV Company to be issued to 1MDB and let us have the subscription deliverables contemplated in Clause 4.1 of the Joint Venture Agreement.
  1. Loan Repayment Demand
From our review of the Loan Repayment Demand document, we note that the letter was drafted on the letterhead of PetroSaudi International Limited. We thought that it would have been on the letterhead of PetroSaudi Holdings (Cayman) Ltd. We understand from Patrick that the logo of PetroSaudi International Limited appears on the letterheads of all the companies, and they only change the footers of the letters for different companies.
Can you please confirm that Loan Repayment Demand letter is issued by PetroSaudi Holdings (Cayman) Ltd, and not PetroSaudi International Limited.
  1. JP Morgan’s Form A
Further to my email today (attached), could you please confirm that Tarik, HRH Prince Turki and the Minister of Finance Inc are named as the beneficial owners of the joint account in Form A because they are the ultimate beneficial owners of the shareholders of the JV Company. Presumably, it is JP Morgan’s requirement to name the ultimate beneficial owner of the account (and not the intermediaries).
Could you please also send us the revised Form A as suggested in the attached email
Next, the shocking information leaked out that the 1MDB task force investigators had traced RM2.6 billion into Najib’s own account and a further RM42 million that had gone into another Najib account from the 1MDB/MOF subsidiary SRC.
Not so rich after all - Prince Turki bin Abdullah
Not so rich after all – Prince Turki bin Abdullah
First, Najib denied the story and blocked Sarawak Report and threatened the Wall Street Journal.  Then he admitted the money, but said the it was a gift from an anonymous “donor”.  More recently, he has refined this story to say that the “donor” was a son of the Saudi King (off-the record identified as Prince Turki, the owner of 1MDB’s joint venture partner PetroSaudi).
The PM, later still, surprisingly announced that most of the money was afterwards “sent back” to this “donor”, presumably because he was unable to deny SR’s story that Najib emptied this account back to Singapore after the election.
Finally, another new development in the evolving narrative is that the PM has admitted that the RM42 million was placed in his account, but claims he does not know who put it there.  Nor did he realise that it had come from SRC.  Nevertheless, investigation papers, waved before cameras by the Attorney General himself, confirmed that this mystery money was used to pay Najib’s own credit card bills.
Nik Kamil - power of attorney over Najib's accounts.  High-tailed it from KL months ago
Nik Kamil – power of attorney over Najib’s accounts. High-tailed it from KL months ago
Nik Kamil, is in the firing line over those SRC payments.  After all, he had been given power of attorney over the relevant accounts belonging to the PM and was the person who transferred the money from SRC where he was simultaneously the CEO (working under Najib’s Ministry of Finance).
But, Nik hoofed it abroad some time back.
Meanwhile, the Wall Street Journal came out again this week to back statements by this blog and others that the RM2.6 billion, which separately arrived in Najib’s account from the Aabar owned Falcon Bank, all points to having originated from 1MDB, not a Saudi multi-billionaire royal.
It does not help Najib’s present narrative either that Prince Turki is known not to have been a man of great personal wealth and that he himself was back-handed US$77 million for allowing PetroSaudi to be “used as a front” for Jho Low’s original heist of US$1.83 billion…. which means that a new explanation may very well soon have to be found.
Someone will have to be blamed for losing this 1MDB money and then gulling the PM into thinking he had been given a Saudi donation……
Once that person has been identified and shown to have signed all the papers, how simple it would surely be to explain how, from his lofty position, so beset with other responsibilities, the Prime Minister/ Minister of Finance simply had no idea about what his various proxies were up to?
Who else could that person be, KL insiders are whispering, than Shahrol Halmi?

Pawn in the game

Master-mind was Jho Low, but he disappeared months ago
Master-mind was Jho Low, but he disappeared months ago
Emails and documents relating to the PetroSaudi deal in fact show that Halmi was little more than a front man for the deal.
However, this may not prevent him from shouldering all of the blame, because it was he who had the job of pushing through the resolutions of the Board and signing off the money transfers.
According to emails obtained by Sarawak Report, the PetroSaudi Joint Venture plan was hatched between Jho Low and PSI Directors Patrick Mahony and Tarek Obaid after a meeting on 8th September 2009.
But, Shahrol was not even introduced by email to his joint venture partners until 18th of that month.  By 30th, after a brief meeting in London, the deal was signed without any proper valuation of PetroSaudi having ever been conducted or brought before the Board of 1MDB.  It is plain the orchestrator was Jho Low (see below) although he advised Shahrol in future to leave him out of the official loop on 1MDB related matters “for proper governance purposes”.  
PetroSaudi’s emails show that he nevertheless continued to be back-channelled into all relevant exchanges by the PSI directors Tarek and Patrick.
Subject:
RE: Introductions for PSI and 1MDB
From:
“Shahrol Halmi”
Date:
20/09/2009 09:40
To:
Low, Jho (Personal); Tarek.Obaid@petrosaudi.com
CC:
‘Casey Tang'; ‘Patrick Mahony'; Robert Ho
Thanks Jho
Dear Tarek, pleased to make your acquaintance. Looking forward to meeting face to face next week.
I understand that you’ve couriered over a copy of PSI’s company profile late last week. Unfortunately it being a long weekend over here in Malaysia, we haven’t received anything yet.
In the spirit of moving as expeditiously as possible, would it be possible for Robert, our Corporate Communications person to liaise directly with his PSI equivalent to get going on joint statements, and to agree on levels of detail we are comfortable with releasing to the media?
Sincerely,
Shahrol
From: Low, Jho (Personal) [mailto:jho.low@gmail.com]
Sent: Friday, 18 September, 2009 8:31
To: ‘Shahrol Halmi'; Tarek.Obaid@petrosaudi.com
Cc: ‘Casey Tang'; ‘Patrick Mahony’
Subject: Introductions for PSI and 1MDB
Importance: High
Hi Tarek, Shahrol,
I am putting the both of you together as per the mutual interests of PetroSaudi and 1Malaysia Development Berhad (1MDB)
I am pleased to confirm as per YAB Prime Minister’s discussions with HM King Abdullah Al-Saud on furthering Saudi-Malaysia bi-lateral ties, together with YAB PM’s discussions with HRH Prince Turki Al-Saud, PetroSaudi and 1MDB is on track with respect to your USd2.5b JVC partnership.
YAB PM has confirmed that he looks forward to the signing ceremony on 28 September 2009 to be attended by HRH Prince Turki Al-Saud.
Would appreciate if you could keep the working group to a PNC – 4 member list serve as I understand due to the urgency of the matter, NDAs have not been signed, and PSI in participate is quite sensitive about information flow in respect of HRH.
 My suggestion is have Patrick and Casey work the details reporting back to Tarek and Shahrol for decision making, etc.
Thank you.
(I trust all of you can now officially communicate and don’t need to cc me for proper governance purposes)
Subject:
From:
Date:
To:
CC:
Minutes from 1MDB Board have subsequently been leaked which show that Board Members were furious with Shahrol and the Chairman subsequently resigned when it became clear that the deal had gone ahead at breakneck speed, contrary to resolutions. Furthermore, the ruse of paying back a supposed US$700 million ‘loan’ to PetroSaudi had been agreed to by 1MDB managers despite the Board’s demand for a proper valuation.
Yet, it is clear that while Shahrol seemed content to take on the front man role on these controversial matters, it was the others who continued to manage the decisions behind the scenes.  Take this continuation of the email exchange between Jho Low and the PSI directors, for example, where Low suggested keeping Halmi out of the loop until the “Prime Minister has cleared the air” with the Board.
Re: Introductions for PSI and 1MDB
From:
jho.low@gmail.com
Date:
08/10/2009 22:55
To:
Patrick Mahony
No, I wldnt even bother sending it. But if u have its fine. Keep it simple. Want to give board as little info as possible until PM clrs the air.
Sent via BlackBerry from T-Mobile
_____
From: Patrick Mahony
Date: Thu, 8 Oct 2009 23:35:45 +0200
To: jho.low@gmail.com
Subject: RE: Introductions for PSI and 1MDB
Jho – i sent them this again as they already had it. I have far more detailed presentations on PSI too that look better with asset details etc. Do you want me to send that?
From: Patrick Mahony
Sent: Thursday, 08 October, 2009 11:08 PM
To: ‘jho.low@gmail.com’
Subject: FW: Introductions for PSI and 1MDB
I had already sent them this. Ok to send again…?

From: Patrick Mahony
Sent: Monday, 21 September, 2009 2:50 PM
To: ‘Shahrol Halmi'; Low, Jho (Personal); Tarek Obaid
Cc: ‘Casey Tang'; Robert Ho
Subject: RE: Introductions for PSI and 1MDB
Dear Shahrol,
Tarek has asked me to answer on his behalf as he is not able to get to a computer at the moment. First of all regarding the overview of PetroSaudi, I attach a brief presentation. This is a bit dated and only includes the upstream oil and gas ambition of PSI (it also does not have any asset specific data) but should give you a sense of what we are about. Obviously PSI will aim to invest in other areas as it works with you going forward.
With regard to liaising with Robert on what we can release to the media, I will be the point person. I would suggest you send to me a draft of what you would like to release and we will let you know if it works for us. PSI is very press shy and usually never announces our investments (one of the main reasons governments like to work with us) but we understand you will need to make some statements and we would be happy to make them jointly with you.
I look forward to meeting you in London and hearing from Robert.
All the best,
Patrick
It is plain from the above emails and others that Shahrol Halmi was willing to proceed in a matter of just 10 days with signing over a billion dollars into a deal with PetroSaudi without even having been sent “asset specific” information about the company.
Man in charge of operations for PSI - Director Patrick Mahony
Man in charge of operations for PSI – Director Patrick Mahony was media shy
He was carrying out an agreement decided upon by his boss the Minister of Finance, purportedly with the King of Saudi Arabia… but in fact with his son, Prince Turki.
Note for example below the discussion between Shahrol and the PSI directors about the press release to announce the supposed ‘country to country’ joint venture deal.  Shahrol announced what the PM “insisted on” to give the impression this was a Saudi royal venture and then accommodated the nervous qualifications from Patrick Mahony.
The press release was for local demand and the conspirators hoped the foreign media wouldn’t pick it up, because PSI did not want anyone knowing just what it was claiming or how much money it had supposedly been paid!
Show email
ForwardedMessage.eml
Subject:
From:
Date:
To:
Indeed, the whole joint venture was managed between Jho Low and his team (including deputy Seet Li Lin) and the PetroSaudi team and their lawyers in London – Shahrol was flown in to sign, after being “softened” by Jho:
Show email
Ok. Thanks. Yes – W&C
—–Original Message—–
From: Seet Li Lin
Date: Mon, 21 Sep 2009 15:54:21
To: Patrick Mahony
Subject: Re: Meeting in LDN
Hi, give us a couple more hours for JVA.
 Meeting in LDN on Wed will be at White and Case?
 ——Original Message——
From: Patrick Mahony
To: Li Lin Seet (gmail)
Subject: RE: Meeting in LDN
Sent: Sep 21, 2009 14:34
 Thanks. ETA for first draft of agreement is still in a few hours…?
 —–Original Message—–
From: Seet Li Lin [mailto:seet.lilin@gmail.com]
Sent: Monday, 21 September, 2009 3:33 PM
To: Patrick Mahony
Subject: Re: Meeting in LDN
 Understand. Will do just that. Will prep B and M lawyers.
 ——Original Message——
From: Patrick Mahony
To: Li Lin Seet (gmail)
Subject: RE: Meeting in LDN
Sent: Sep 21, 2009 13:26
Ok. I’ve just been bbm’ing with jho and i think we need their counsel to stay longer in case. I also need to get the 1mdb lawyer and my lawyer in touch asap. I will wait until you send the jva but what i suggest is that when you send me the jva, you introduce me to your lawyers by email and then i will forward the jva to my lawyers and introduce my lawyers to your lawyers. Thanks
—–Original Message—–
From: Seet Li Lin [mailto:seet.lilin@gmail.com]
Sent: Monday, 21 September, 2009 2:06 PM
To: Patrick Mahony
Subject: Meeting in LDN
Hi Patrick,
Jho is tied up in meetings and could not do the call.
He requests that you bcc himself and me in any correspondence to 1MDB.
Also, the meeting on Wednesday is expected from 11am to 5pm. Can you get White and Case to book 2 meeting rooms. 1 for 1MDB and PSI. 1 for Jho and PSI.
Jho has softened the ground so the 1MDB ppl are expected to come and meet, chat to know each other and sign. Their legal counsel will be here as well.
Thanks
Jho Low, who is also hiding abroad, has his own problems with the international regulators who have frozen his accounts and appear to be hunting his whereabouts.  But, unlike Shahrol Halmi, he will not be coming back to KL
For the consumption of Malaysians therefore, it is currently being widely speculated that Halmi is the guy who can be picked up and blamed for all the missing millions and even for any that may be proven to have directly moved into Najib’s accounts – in the same way that Nik Kamil stands responsible as the power of attorney for Najib who moved the money from SRC.
Lawyer Tim Buckland master-minded the legal side from White and Case... then became a PetroSaudi director too
Lawyer Tim Buckland master-minded the legal side from White and Case… then became a PetroSaudi director too
It would be hard for Halmi to demonstrate his innocence in any Malaysian court of law, where, it goes without saying, blaming his boss would be disallowed.
So, onlookers are speculating that he will be the next in a line of fall guys.
With Xavier Justo now singing Najib’s tune from a jail in Bangkok and Sirul Azhar likewise from his cell in Sydney, the template on how to exploit an implicated man behind bars is fully established.
Shahrol Halmi once jailed would be faced with a choice behind bars in KL.  Either to remain saying nothing throughout an indeterminate sentence or to start playing ball in return for promises and cash to his family.
Should we anticipate 5 part videos from Halmi behind bars, accepting that he was solely responsible for taking all this money and revealing names of  ‘conspirators’ and ‘trouble-makers’ trying to ‘use him to cast aspersions against the Prime Minister’, who, of course had nothing to do with any of the losses from 1MDB?
It is jumping ahead a bit, but it seems a highly plausible outcome in the light of recent history.

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