KUALA LUMPUR (Nov 9): Hollywood producer Riza Aziz along with Red Granite Pictures Inc and Red Granite Capital Ltd maintained in their defence that the monies received for the production of several movies were borrowed from the Saudi royal family or Dubai-based International Petroleum Investment Company (IPIC).
In their defence sighted by theedgemarkets.com filed by the firm of Messrs Scivetti and Associates on Oct 25, Riza and the two companies claimed that it was difficult for “an uncharted film producer” to obtain loans from banks.
“Therefore, the defendants opted to source investments and/or loans from individuals or companies.
“I (Riza) was introduced to Prince Saud Abdulaziz bin Majed bin Abdulaziz Al Saud (Prince Saud) and Prince Faisal bin Turki bin Abdullah bin Abdulaziz Al Saud (Prince Faisal) of the Saudi royal family who showed a keen interest to lend money to me for the purpose of film production by Red Granite Pictures.
“The representative of the Saudi royal family agreed to give a loan to me (Riza) for the purpose of Red Granite Pictures and Red Granite Capital's businesses. The loan was disbursed by a company known as Alsen Chance Holdings Limited where it was beneficially owned by the Saudi royals.”
As a result, Riza said he had entered into a loan agreement with Alsen Chance and sums of US$1.173 million and US$9 million were given. Riza who is the stepson of former prime minister Datuk Seri Najib Razak said he was introduced to the Saudi royals by fugitive businessman Low Taek Jho or Jho Low.
He added that the funds received from Alsen Chance were utilised to finance the businesses of the two companies which included the setting up of and operating a production house, buying rights of scripts, books and producing films.
“The first defendant (Riza) discharged his obligations under the Alsen Chance loan agreement by Oct 31 this year, whereby he had repaid Alsen Chance in full together with interest,” the statement of defence said.
“At all material times, Alsen Chance had no nexus or connection with the plaintiffs (1Malaysia Development Bhd [1MDB] and its subsidiaries). As such, there was no reason for the defendants to suspect the source of the funds.”
1MDB along with its subsidiaries 1MDB Energy Holdings Ltd, 1MDB Energy Ltd and 1MDB Energy (Langat) Ltd had filed a US$248 million suit against Riza along with Red Granite Pictures and Red Granite Capital claiming that Riza misappropriated funds from Jho Low or was wilful and reckless in failing to make relevant inquiries as to the source of the funds.
While 1MDB filed the suit on May 7, its law firm Messrs Shearne Delamore filed the statement of claim (SOC) on Sept 9, where it claimed that the first tranche payment of more than US$10 million was from Good Star Ltd controlled by Jho Low.
Funds of US$238 million purportedly from IPIC
With regard to the US$238 million it received in 2012, as alleged in the SOC, Riza said he was presented to IPIC as a company established in Abu Dhabi and its managing director Khadem Abdullah Al-Qubaisi, a former aide to Sheikh Mansour Zayed Al Nahyan (a minister and a member of the royal family).
Riza claimed that he was further presented that Aabar Investments PJS Ltd (Aabar BVI) was a subsidiary of IPIC and chief executive officer of Aabar Mohamed Ahmed Badawy Al-Huseiny, where the managing director of Aabar was Qubaisi and where Aabar was said to have a strong financial background with a capital of US$60 billion.
“It was presented to me (Riza) that Aabar Investments PJS (Aabar BVI) was a subsidiary of IPIC and the directors of Aabar BVI were Qubaisi and Huseiny. Therefore, the defendants had no knowledge that Aabar BVI was not an affiliate of IPIC or Aabar.
“At all material times, the defendants had no knowledge that Aabar BVI or the directors of Aabar BVI had any nexus or connection with 1MDB and its subsidiaries,” the statement of defence added.
The defendants maintained that they had no knowledge of the purported diversion of the 2012 bond proceeds from 1MDB as stated in the company's SOC, and said that it received the sum of US$238 million that included the operational cost of a production house, buying rights of scripts, books and producing films.
In the defence, Riza and the two companies said they had produced movies titled Friends with Kids, Children Rise, Out of the Furnace, award-winning The Wolf of Wall Street, Horns, Dumb and Dumber To and Daddy's Home.
Riza maintained that he does not know the business affairs of 1MDB and was not aware nor did he have any knowledge or reason to reasonably suspect that the funds were fraudulently and unlawfully acquired by Aabar BVI.
He further denied the firm's claim of unjust enrichment and for these reasons, he sought the court to dismiss the claim.
Case management came up before High Court senior assistant registrar Syeela Marlina Uttaman on Tuesday (Nov 9) where 1MDB and its subsidiaries sought an extension of time to reply to Riza, Red Granite Pictures and Red Granite Capital's defence.
Riza, Red Granite Pictures and Red Granite Capital were represented by Syazwani Mohd Zawawi from Scivetti, while Thong Chon Yen from Shearne appeared for 1MDB and its subsidiaries. Riza will be represented by counsel Datuk Hariharan Tara Singh in the civil suit.
Syeela Marlina allowed the extension of time for 1MDB and its subsidiaries to file their reply to the defence by Nov 22, and also asked the parties to file any interlocutory applications before the next case management by Dec 6.