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Federal Criminal Court to Hear Swiss Involvement in 1MDB Scandal

  • By The Swiss Times
  • 29 March 2024

Swiss Federal Criminal Court scrutinises local ties in the global 1MDB embezzlement case, spotlighting a Swiss-Saudi businessman and his accomplice.

Federal Criminal Court to Hear Swiss Involvement in 1MDB Scandal
Keystone/FAZRY ISMAIL

Starting next Tuesday, the Criminal Chamber of the Federal Criminal Court will deal with the Swiss part of the affair surrounding the Malaysian state fund 1MDB.

A businessman and his partner are facing charges of mismanagement, fraud, money laundering and other offences. They are alleged to have diverted money from the fund for themselves.

The men are accused by the Office of the Attorney General (OAG) of creating a system to siphon off funds. Former Malaysian Prime Minister Najib Razak and his advisor Jho Low were involved.

The extent of the embezzlement is said to have ultimately amounted to around 4.5 billion US dollars, of which 1.8 billion US dollars is said to have flowed into the accounts of the two defendants.

The businessman, a 48-year-old Swiss-Saudi dual national, is accused of mismanagement, bribery of foreign public officials, forgery of documents, qualified money laundering and misconduct in public office. His 46-year-old partner holds a Swiss and a British passport and is facing the same charges, with the exception of forgery.

According to the indictment, between 2009 and 2011, the first defendant is alleged to have arranged for the outflow of 1.8 billion US dollars from the sovereign wealth fund 1MDB to the accounts of his Geneva-based company Petrosaudi.

Based on the scheme devised by the two defendants and other actors, the fund’s board of directors was convinced that it was negotiating with a Saudi Arabian state-owned company that was active in the exploration and development of oil fields.

In reality, Petrosaudi and the companies it controlled on the Cayman Islands and in Turkmenistan were little more than empty shells. Through a clever web of lies and half-truths, the defendants allegedly convinced the fund’s board of directors that Petrosaudi held licenses for oil fields in Turkmenistan and Argentina.

In order to participate in the exploitation of these resources, the 1MDB fund was persuaded to enter into a joint venture with Petrosaudi. The fund made deposits, while the Geneva-based company’s deposits consisted of fictitious rights.

In a first phase, the fund was lightened by 1 billion US dollars by the end of 2009. Of this, 700 million went to an account of Jho Low and 300 million to Petrosaudi and thus to the two defendants.

Juicy Restructuring

In a second step, a restructuring of the joint venture in 2010 led to further payments: 500 million for the joint venture – and according to BA in reality for the defendants – and 330 million for Jho Low.

The 1MDB scandal has led to proceedings being initiated in several countries. In Malaysia, it triggered the fall of Najib Razak’s government in 2018. In July 2020, he was sentenced to twelve years in prison and a fine of 210 million ringgit (44 million Swiss francs). In early February 2024, the Malaysian Board of Pardons and Paroles reduced the sentence to six years.

The trial is scheduled for the whole of April. The OAG will announce the required sentence at the main hearing.

©Keystone/SDA

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