Special Report: Names could be deceiving

This article first appeared in The Edge Malaysia Weekly, on August 13, 2018 - August 19, 2018.
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JHO Low and his associates were able to transfer hundreds of millions of US dollars from one Swiss bank account to another using many tactics. One of these was namesakes — opening bank accounts under names that are similar to those of reputable entities. And the namesakes worked so well bank officials were persuaded to execute the money transfers.

Aabar Investments PJS Ltd (BVI) and Aabar Investments PJS Ltd (Seychelles) 

The two companies — Aabar-BVI and Aabar-Seychelles — were set up by Jho Low and his associates to appear to have an affiliation with Aabar Investments PJS, a subsidiary of International Petroleum Investment Company.

Aabar-BVI and Aabar-Seychelles’ bank accounts were used as dummy accounts to siphon off a portion of loans granted by Deutsche Bank in 2014, when 1MDB was planning the listing of its energy assets.

Some US$175 million in loan proceeds was diverted through Aabar-BVI’s BSI Bank account in Lugano, Switzerland, while about US$700 million in proceeds went to Aabar-Seychelles’ UBS AG account in Singapore.

After several convoluted layering processes through various bank accounts, portions of the funds ended up in Low’s personal BSI Bank account.
 

Blackrock Commodities (Global) Ltd

The name Blackrock was likely used to lend some legitimacy to this dummy firm by borrowing global investment management company BlackRock Inc’s name. Otherwise, such large transactions could be subject to greater scrutiny.

The beneficial owner of Blackrock’s bank account was listed as Eric Tan Kim Loong, one of Low’s most trusted associates, although Low had de facto control over the use of funds in the account. The account was used to funnel some US$1.28 million to an AmBank account.

The original BlackRock Inc is the largest investment fund in the world, based in New York City, with assets under management (AUM) of US$6.3 trillion as at June 30 this year. The fund operates globally with 70 offices in 30 countries and clients in 100 countries.
 

Blackstone Asia Real Estate Partners

Between May and December 2012, five wire transfers totalling US$636 million were sent from Aabar-BVI to a Standard Chartered Bank account in Singapore, held in the name of Blackstone Asia Real Estate Partners, with Tan as the beneficial owner.

The account was originally opened in the name of Foreign FX Trading Ltd, but was changed to Blackstone Asia Real Estate Partners around May 2011.

The name change was likely inspired by the real estate private equity firm Blackstone Real Estate, an affiliate of private investment firm Blackstone Group, which is listed on the New York Stock Exchange with US$439 billion in AUM.

As at June 30, Blackstone Real Estate owned 226 million sq ft of office space, 75 million sq ft of retail assets, 152,000 hotel keys globally, 300,000 residential units and 383 million sq ft in industrial properties around the world.
 

Affinity Equity International Partners

This shell company borrows its name from Affinity Equity Partners, which is one of the largest Asian private equity firms with a particular focus on opportunities in South Korea, Australia, New Zealand, Greater China and Southeast Asia.

A DBS Bank account in Singapore, held in the name of Affinity Equity International Partners with Tan as its beneficial owner, had received US$155 million from Aabar-BVI in May 2014.

According to the US Department of Justice, BSI Bank officials may have believed there was a genuine affiliation between the shell company and the actual private equity firm when the fund transfer was approved.

Mohamed Ahmed Badawy al-Husseiny, the former CEO of Aabar, had represented to BSI Bank that the US$155 million transfer was for a shariah-compliant investment and profit-sharing agreement under the mudharabah principle between Aabar-BVI and Affinity Equity.
 

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