(Nov 27): For sale: a piece of 1MDB history complete with Turkish bath, swimming pool and a helicopter landing pad.
Wednesday marks the last auction day for the Equanimity yacht once owned by fugitive businessman Low Taek Jho and formerly used to host parties featuring the likes of socialite Paris Hilton and Australian model Miranda Kerr.
The 300-foot vessel was put up for sale last month after being seized in March as part of global attempts to recoup assets allegedly lost through the state investment company. Its former owner, better known as Jho Low, has been described as a central figure in the billion-dollar 1MDB scandal that has resulted in worldwide investigations and engulfed Goldman Sachs Group Inc. along with former Malaysian Prime Minister Najib Razak.
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While the yacht might appear to be of interest only to those with a quarter billion dollars burning in their pockets, a smooth sale could help ease pressure on Prime Minister Mahathir Mohamad as he seeks to fulfill a campaign pledge to recover funds believed to be missing from 1MDB. The leader has said he aims to recover as much $4.5 billion.
Yacht specialist Burgess, the sole broker for the sale, said there’s interest from both local and foreign investors. Some of those potential buyers have already had to stump up a $1 million deposit to pay for the privilege of surveying the yacht, said Ong Chee Kwan from law firm Christopher & Lee Ong, which is representing Malaysia and 1MDB in the sale.
The Equanimity is just one part of a treasure trove of glitzy possessions once owned by Low and now the subject of legal wrangling and asset seizures around the world. The U.S. has filed forfeiture lawsuits against $1.7 billion of assets that were allegedly acquired with money embezzled from 1MDB, including a $1.29 million heart-shaped diamond and a $3.8 million diamond pendant that Low gave to Kerr, as well as a $3.2 million Picasso painting that Low gifted to actor Leonardo DiCaprio.
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Low has previously called the yacht’s seizure “illegitimate,” while Mahathir challenged the vessel’s owners to reveal the source of funds used to buy Equanimity.
The Malaysian Admiralty Court ruled in October that the Malaysian government and 1MDB are the rightful owners after no one from Equanimity Cayman Ltd., the company that held titles to the yacht, appeared in court to contest the claim. The company said in August that it hadn’t received any “legally valid notice” on the hearing.
The judicial sale process means interested buyers must send in sealed bids to the Sheriff of the High Court of Malaya, who also holds a sealed appraisal note setting out the yacht’s court-approved value. The Sheriff will pick the highest offer as long as it’s more than the amount set out in the note, and Malaysia may have to consider another option if all the bids are lower. The yacht has already cost Malaysian taxpayers more than 3.5 million ringgit ($835,000) in maintenance.
Despite its colorful history, the successful buyer of the yacht will get a globally-recognized ownership title “free of mortgage, attachment and all encumbrances,” according to Burgess’ site. - Bloomberg