Court temporarily bars Tarek Obaid, four others from moving US$340m 1MDB-linked funds

Tarek's lawyer Datuk Mohd Yusof Zainal Abiden (left) and PetroSaudi Oil Services (Venezuela)'s lawyer Alex Tan (Photo by Mohd Suhaimi Mohamed Yusuf/The Edge)

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KUALA LUMPUR (July 16): The High Court here had today issued an ad-interim (temporary) order barring Tarek Obaid, PetroSaudi Oil Services (Venezuela) Ltd (PetroSaudi Venezuela) and three others from moving US$340.26 million to other entities because the money is alleged to be linked to 1Malaysia Development Bhd (1MDB).

The temporary prohibition order will last until the disposal of an asset forfeiture application by the Malaysian government.

Besides Tarek and PetroSaudi Venezuela, others named in the asset forfeiture exercise are PetroSaudi International Ltd, Clyde & Co LLP and Temple Fiduciary Services Ltd.

Clyde & Co is allegedly the holder of the escrow account in excess of US$340 million for PetroSaudi Venezuela while Temple Fiduciary Services is where Tarek also has an account.

Yusof said they needed three weeks to reply to the prosecution's affidavit to oppose the application.

High Court judge Mohd Nazlan Mohd Ghazali granted the ad-interim order after deputy public prosecutors (DPPs) Budiman Lutfi Mohamed and Muhammad Izzat Fauzan applied for the order to bar Tarek, PetroSaudi Venezuela and the three others from moving the money.

The DPPs applied for the ad-interim order today following an arbitration decision on Friday in London where the arbitrator ruled in favour of PetroSaudi Venezuela.

In Malaysia today, Tarek's lawyer Datuk Mohd Yusof Zainal Abiden and PetroSaudi Venezuela's lawyer Alex Tan told the High Court they will oppose the Malaysian government's asset forfeiture application.

Budiman said if the ad-interim order was not given, it would render the Malaysian government's asset forfeiture application academic as Tarek and PetroSaudi Venezuela's application to oppose the forfeiture would be heard only next month.

Justice Mohd Nazlan granted the ad-interim order after hearing submissions from the DPPs besides Tarek and PetroSaudi Venezuela's lawyers.

The judge said: "The court has the jurisdiction to grant an interim preservation order which I now grant which will be enforced until the disposal of the main application."

Earlier, Yusof and Tan opposed the interim order sought by the prosecution as they said the Malaysian Anti-Corruption Commission (MACC) had more than six months to make the application but only did so by filing the application on Friday.

“I am not sure whether we have the provision to give an ad-interim premised on the illegality of the property. If an interim order is granted, it would mean the very idea of opposing this application could be lost,” Yusof said.

Budiman and Izzat told the court that they only received information of the arbitration award on Friday and are concerned that if an ad-interim order was not given for the matter to remain status quo, it would result in the monies being moved to other accounts and this would then turn into an academic exercise.

“Following the presence of the counsel, we would at a later date apply for the forfeiture. What is needed is to preserve the status quo to ensure there is no movement of monies,” Budiman said.

Izzat said the court has the power under the Courts of Judicature Act for the interim preservation of property by sale or by the court granting an injunction to preserve the property from being transferred elsewhere.

Lawyer Muhammad Nizamuddin Abdul Hamid, representing the MACC, told the court that the forfeiture action came after charges had been levelled on Tarek, Patrick Mahony and Low Taek Jho, or Jho Low, last February and that the forfeiture action was made following investigations that began in January till today.

It was reported last February that Tarek, Mahony and Jho Low were charged with criminal conspiracy to the commission of an offence by former prime minister Datuk Seri Najib Razak.

Obaid and Mahony face a separate charge for engaging in money laundering on Sept 30, 2009 at Switzerland-based J.P. Morgan (Suisse) SA involving a sum of US$300 million (about RM1.24 billion) being proceeds of an unlawful activity from 1MDB.

The charge sheet claimed that the money was deposited into 1MDB-PetroSaudi's bank account bearing the number 7619400 and the duo committed the offence under Section 4(1)(a) of Malaysia's Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001.

It was reported the public prosecutor filed the forfeiture action last Friday to seize the US$340 million said to be proceeds from 1MDB from its tie-up with PetroSaudi through PetroSaudi Venezuela.

After the proceedings, Yusof told reporters that he was appointed last night by Tarek.

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MACC lawyer: Forfeiture action against PetroSaudi, Tarek a result of Special Task Force probe on 1MDB