1MDB and the era of global crime

The Malaysian Sovereign Wealth Fund called 1MDB raised some $6.5 billions with the intention of investing in Malaysian and other energy sectors. But this worthy goal was subborned by criminals who performed one of the biggest heists in the history of theft.  That money moved round the globe, through multiple politicians’ pockets, multiple kingdoms, multiple banks, multiple companies, multiple assets. It was an object lesson in seeing how many places dirty money can travel without a question being asked. We see from the places where the money filched from 1MDB ended up where and how criminals operate.  Those who benefited to the tune of millions, even hundreds of millions, could spend beyond their wildest dreams on property, leisure, luxury, excess. For many the fun was shortlived and it became a nightmare. 

PetroSaudi was just one section of the 1MDB story, but it has beeen picked over more than most and it shows us how the master crook worked to exploit the greed of others and the gaping holes in the fin ancial system. 

PetroSaudi was a small boutique investment vehicle which was down on its luck. Its owners, Tarek Obaid and Princve Turki  (of whom much more further down) claimed to have some investments in the energy sector which were underperforming and not worth nearly as muich as its owners had hoped. The oppounity to boost the business weas presented by 1MDB which had capital biut no assets. 1MDB offered PetroSaudi enough capital to enter into a joint venture if it could show that its investments were equal to half of the value of this 50:50 arrangement, a total of $1.8 billion.

Now to the scam! It is alleged that PetroSaudi deliberately inflated the value of its investments in energy to ensure the creation of the joint venture. Such an alleged false over-valuation was the catalyst for the injection of the 1MDB capital.

Once such an injection had been made, PetroSaudi allegedly diverted the capital intended for energy investment (jointly owned  by 1MDB) through a series of manoevres involving private Swiss, American and British banks. The beneficiaries were Jho Low’s vehicle Good Star, Tarek Obaid and Patrick Mahony. The entire $1.8 billion disappeared into a black hole, engineered by the alleged conspirators. 

Question One: What did 1MDB think was happening to the investments PetroSaudi said they were making in energy ventures? 

Querstion Two: What did the private banks know about the large sums they were moving between themselves.

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