1MDB: AGC files additional charges against 17 individuals

KUALA LUMPUR, Aug 9 (Bernama) -- The Attorney General's Chamber (AGC) today filed additional criminal charges against 17 individuals, who are current and former directors of three subsidiaries of Goldman Sachs investment bank, over the sale of Guaranteed Notes of 1Malaysian Development Berhad (1MDB) subsidiaries amounting to US$6.5 billion by omitting several material facts and making false statements.

Attorney-General Tommy Thomas, in a press release, said the charges were filed under Section 367(1), read together with Section 179 of the Capital Markets and Services Act.

The individuals involved are Richard John Gnodde, Brian Griffiths, Michael Sydney Sherwood, Robin Antony Vince and Claes Ake Gustaf Dahlback of Goldman Sachs International; Oliver Robert Morgan Bolitho, Matthew Thayer Freemont-Smith, Frederick Towfigh, Archie William Parnell, Ronald Suk Bae Lee, Richard Mark Campbell-Breeden, Keith Leslie Hayes, Amol Sagun Naik, John Michael Evans and Dimitrios Kavvathas of Goldman Sachs (Asia) LLC; and Goh Boon Leng and Liow Chang Lee of Goldman Sachs (Singapore) Pte.

Gnodde, Griffiths, Sherwood, Vince, Bolitho, Freemont-Smith, Towfigh, Parnell, Suk, Campbell-Breeden, Hayes, Naik, Evans, Kavvathas and Goh, who were the directors of the subsidiaries, as the Bookrunner and Arranger for the sale of the Guaranteed Notes worth US$1.75 billion at a 5.99 per cent interest rate due 2022 to be issued by 1MDB Energy Limited (incorporated in Federal Territory of Labuan, Malaysia), had allegedly omitted several material facts in connection with the sale of the Notes.

They were alleged to have committed the offence at 1Malaysia Development Berhad (1MDB), Level 8, Tower IMC, No. 8, Jalan Sultan Ismail here between March 19 and Sept 25, 2012.

The omitted facts, among others, involved Low Taek Jho, 38, or better known as Jho Low, as the operator and key intermediary for 1MDB, the parent company of 1MDB Energy Limited.

Other omitted fact was that the 1MDB Energy Limited and Aabar Investments P.J.S. Limited (Aabar Limited) entered into a Collaboration Agreement For Credit Enhancement dated May 21, 2012, wherein 1MDB Energy Limited agreed to pay Aabar Limited a credit enhancement and underwriting contribution in cash (Credit Enhancement Collateral) in consideration of Aabar Limited procuring a guarantee from the International Petroleum Investment Company P.J.S.C. (IPIC), in favour of 1MDB Energy Limited guaranteeing the Notes and the Credit Enhancement Collateral was to be paid from the proceeds of the issuance of the Notes.

Gnodde, Griffiths, Sherwood, Vince, Bolitho, Freemont-Smith, Towfigh, Parnell, Lee, Campbell-Breeden, Hayes, Naik, Evans, Kavvathas, Goh and Dahlback, are also alleged to have omitted material facts related to the sale of the Guaranteed Notes worth US$ 1.75 billion due in 2022 at a 5.99 per cent interest rate to be issued by 1MDB Energy Limited (incorporated in the Federal Territory of Labuan, Malaysia) at the same location between Aug 10 and Oct 17, 2012.

Gnodde, Griffiths, Sherwood, Vince, Dahlback, Bolitho, Freemont-Smith, Towfigh, Parnell, Campbell-Breeden, Goh and Liow are also accused of making false statements in connection with the sale of the Notes worth US$3 billion due in 2023 at 4.4 per cent interest rate, to be issued by the 1MDB Global Investments Limited (incorporated in British Virgin Islands) (1MDB GIL) at 1MDB's office between March 12 and Nov 11, 2013.

The facts in the Offering Circular dated March 16, 2013, for the Notes, contained “The Issuer will, either on-lend all of the net proceeds of this Offering to ADMIC or use the net proceeds of the offering, to fund its investment in ADMIC, which will be a 50:50 joint venture between the Issuer and Aabar” written on page 24 under the heading of “USE OF PROCEEDS ”.

Meanwhile, Sherwood, Dahlback, Freemont-Smith, Towfigh, Parnell, Lee, Campbell-Breeden, Hayes,  Naik, Goh and Liow are also facing charges of omitting to state material facts for the sale of the Notes worth US$3 billion at a 4.4 percent interest rate due in 2023, to be published by 1MDB GIL at the 1MDB office here between March 12 and Nov 11, 2013.

The omitted facts include of Jho Low as the operator and key intermediary for 1MDB, the parent company of 1MDB GIL, which was necessary to make the following statements made in the Offering Circular for the Notes, dated March 16, 2013, namely, the statements on “Management of 1MDB” and “Corporate Governance of 1MDB” made at pages 37 to 39.

All of the charges are framed under Section 179 (c) of the Capital Markets and Services Act 2007 read together with subsection 367 (1) and punishable under Section 182 of the same Law which carries jail terms of up to 10 years and a fine of not less than RM1 million if convicted.

-- BERNAMA