Defendant in 1MDB trial rejects accusations in Bellinzona
Published: Tuesday, Apr 9th 2024, 18:31
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On Tuesday, the Federal Criminal Court questioned one of the two defendants in the 1MDB trial. The Swiss-British citizen tried to make it credible that the sovereign wealth fund and the Petrosaudi company originated in Malaysia and Saudi Arabia.
The 46-year-old defendant told the court that he lived with his family in Switzerland. He had no income as he would not be able to work in the financial sector until the end of the trial and he could not do anything else.
During the trial, the defendant, who had joined Petrosaudi in autumn 2009, emphasized the links between the company and the ruling family in Saudi Arabia. For example, 50 percent of the capital was held between Prince Turki, one of King Abdullah's sons, and the second defendant, a Swiss and Saudi Arabian national. The latter is also said to have been very well acquainted with the royal family.
When asked about Petrosaudi's activities, the businessman explained that this company had been regarded as a very reliable partner by the company where he had previously worked. Both companies had examined investment opportunities for hydrocarbon production in Latin America and Asia, the defendant said.
Although Petrosaudi was privately owned, it had access to important players in the industry due to its proximity to the state of Saudi Arabia. The man is considered to be the right-hand man of the main defendant, the head of Petrosaudi. According to the Office of the Attorney General (OAG), the two men are alleged to have embezzled 1.8 billion US dollars to the detriment of the Malaysian fund 1MDB.
Hardly any actual activities
With these statements, the defendant attempted to refute the thesis of the federal prosecutor. For them, Petrosaudi had no significant activities prior to the conclusion of the joint venture that led to the alleged embezzlement.
The Federal Criminal Court tried to understand why the partners were in such a hurry to conclude the deal between the meeting between Prince Turki and the then Malaysian Prime Minister Najib Razak in mid-August 2009 on the yacht Alfa Nero off the coast of Cannes and the end of September. The only explanation given was that this was in response to a request "from above".
The court president went through the e-mail correspondence between the defendant and the other participants in the negotiations with 1MDB. For some of them, the defendant invoked his weak memory, 15 years after the events.
He claimed not to have known anything about other things: "The indictment mentions many things that I have no idea about," he said.
As for the different addresses or aliases of the various parties involved, sometimes used only very briefly, this is "a common practice in the business world".
Fictitious exploitation rights
The court dealt with the valuation of the rights to exploit the Serdar III oil field in Turkmenistan. These rights were brought into the joint venture by Petrosaudi, while 1MDB made payments amounting to one billion US dollars. However, Petrosaudi never completed the acquisition of Serdar III. Instead, Petrosaudi acquired control of the funds that were transferred to the joint venture.
The defendant emphasized the variability of valuations in the oil business. Petrosaudi is said to have reached an "exclusive negotiation agreement" with the Canadian company that owns the rights to Serdar III. As a reminder, this area was and is the subject of a border conflict between Turkmenistan and Azerbaijan and is still not being exploited. A solution to the conflict would have multiplied the value of the rights.
In the course of the trial, the court addressed the second part of the alleged fraud, namely the restructuring of the joint venture with the help of an Islamic loan. In September 2010, 500 million US dollars were paid, and a further 330 million US dollars were transferred between May and October 2011.
Executor or actor?
Apart from his poor memory, the financier suggested that he had been an executor rather than an actor, that the decisions had been made at a higher level. Who was the "big man" mentioned in the emails? It is unclear, but the defendant mentioned King Abdullah. This is another way of confirming Saudi Arabia's involvement.
Of the total of 1.8 million dollars allegedly embezzled via Petrosaudi, the director is said to have personally received 570 million dollars and his deputy 37 million dollars. The rest is said to have gone to other actors, in particular Jho Low, Najib Razak's advisor.
The two defendants are mainly charged with commercial fraud, dishonest business management and serious money laundering. The trial is scheduled to last until the end of April.
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