KUALA LUMPUR: One of UBG Bank’s top executives was also employed as the chief investment officer (CIO) of debt-ridden 1Malaysia Development Bhd (1MDB) at the same time the government-owned fund was negotiating a deal with PetroSaudi International, the United Kingdom-based Sarawak Report has said.

The website said the employment of Nik Faisal Ariff Kamil, who is also a close associate of businessman Low Taek Jho, better known as Jho Low, by both companies during the course of 2010 raised the question of conflict of interest.

At that time, Nik Faisal was both UBG executive director of investments and CIO, while Jho Low was a board member of the bank, having headed a substantial share acquisition a few months earlier.

“Correspondence shows that Nik Faisal was looped into extensive discussions with PetroSaudi over what was described as ‘Project Uganda’,” Sarawak Report said.

“This project appeared to be focused around the loans to PetroSaudi and also the buyout of UBG — given that the correspondence on ‘Project Uganda’ email network referred to both these topics only.

“It raises questions over whether Nik Faisal was essentially UBG’s ‘man inside’ 1MDB at this crucial negotiating time — acting as an effective cat’s paw for Jho Low?”

Low’s company Majestic Masterpiece was issued a stake in UBG, which is owned by Sarawak governor Tun Abdul Taib Mahmud, following a share swap deal, Sarawak Report said. Following that, Low joined the UBG board.

“Nik Faisal was UBG executive director of development at the time and is known to be close to Jho Low. He is now a director of another highway construction company called Prolintas, which has received the contract to build the Damansara-Shah Alam Elevated Expressway,” the website said, adding that Nik Faisal was still a director at UBG.

Sarawak Report said its evidence, documents and emails, raised a clear conflict of interest in the fact that Nik Faisal was working inside 1MDB as its CIO throughout 2010, at the very time PetroSaudi was negotiating two further loans from the fund and was also engaged in buying out UBG Bank. — The Malaysian Insider

This article first appeared in The Edge Financial Daily, on March 5, 2015.