New York's Park Lane Hotel can be sold after Jho Low drops claim

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LOS ANGELES (Nov 18): The Park Lane Hotel in New York City can be sold to Abu Dhabi’s state-owned Mubadala Investment Co. after fugitive Malaysian financier Low Taek Jho agreed to drop his claims to the property in a U.S. forfeiture lawsuit.

The U.S. Justice Department has been trying to seize Low’s stake because he allegedly bought it with money stolen from Malaysia’s state-owned 1MDB investment fund. The intermediary companies that hold Low’s interest in the property said in a filing Friday in federal court in Los Angeles that they will withdraw their claims.

This will pave the way for an expedited sale of the hotel to Mubadala and other investors, a spokesman for Low said in a statement. The Justice Department has agreed that dropping the claims is no admission of wrongdoing or liability, according to the statement.

The luxury hotel on 36 Central Park South is among the assets the U.S. prosecutors allege that Low, also known as Jho Low, and his accomplices acquired with billions of dollars siphoned from the 1Malaysia Development Berhad fund. Low bought the hotel in 2013 in a joint venture with New York real estate developer Witkoff Group for about US$654 million. Low’s share was initially 85% of the property. Mubadala paid Low US$135 million in late 2013 for a stake in the hotel.

The sale of the hotel would follow Sony Corp.’s acquisition of Low’s stake in EMI Music Publishing, which was part of a Mubadala-led investor group that owned 60% of the company. Low’s proceeds from that sale, which closed Wednesday, are held by the U.S. pending the outcome of the forfeiture litigation.

Prosecutors in Los Angeles also agreed with Low last month to auction his Bombardier private jet with the U.S. holding on to the proceeds until the forfeiture lawsuit against that asset has been resolved. An earlier effort by the U.S. to sell Low’s US$250 million super yacht at auction fell through in August when Indonesia, where it had been seized at the request of the U.S., handed the yacht to Malaysia.

U.S. prosecutors in Brooklyn charged Low this month with conspiring with a Goldman Sachs Group Inc. banker to launder billions of dollars embezzled from 1MDB. Low, who is believed to be in China, has denied the allegations. -- Bloomberg