Jho Low-linked BVI received US$8.99mil as kickback for US$91mil investment into GCE, court told

KUALA LUMPUR: A sum of US$8.99mil (RM42.13mil) received by Blackstone Asia Real Estate Partners Ltd (BVI), a company believed to be linked to fugitive businessman Low Taek Jho a.k.a Jho Low, was kickbacks for an investment made by Aabar-SRC into Mongolia's Gobi Coal & Energy Ltd (GCE), the High Court heard.

This was the summary made by offshore asset recovery specialist Angela Barkhouse as testified in the hearing of a lawsuit by SRC International Sdn Bhd against former prime minister Datuk Seri Najib Razak for breach of statutory duties.

It was reported that Low set up Blackstone Asia Real Estate Partners, a shell company with a similar name to real estate private equity firm, Blackstone Real Estate and he (Jho Low) deliberately used a naming convention for offshore shell companies built by him to resemble well-established companies in his conspiracy to siphon millions of dollars from 1Malaysia Development Bhd (1MDB).

Aabar-SRC is a joint venture between SRC International's subsidiary, SRC BVI, and Aabar UAE of Abu Dhabi.

ALSO READ: Jho Low-linked company transferred US$15mil of SRC funds to several parties, court hears

Barkhouse said the US$8.99mil payment to Blackstone was made from an HSBC Hong Kong account from GCE, with payment reference stated as "COMMISSION".

"I note the timing of the transactions from GCE to Blackstone and Globalink Private Aviation Ltd, being so shortly after the payment from Aabar-SRC to GCE and have concluded that these payments are likely to be 'kickbacks' for the US$91mil (RM426.43mil) investment into GCE," she said in her testimony via Zoom.

Aabar-SRC had used the majority of the funds it had received to acquire 14 million shares in GCE, a company that holds the rights to two large open-cut coal mines in Mongolia, for US$91mil on Dec 8, 2011.

The court had earlier heard from the witness that GCE, despite the investments it received from SRC BVI, had never produced coal on a commercial basis or generated any revenue from mining operations.

Under new management, SRC filed the legal action in May 2021, alleging that Najib had committed breach of trust, abuse of power, misappropriated the company's funds and personally benefited from it.

ALSO READ: Former banker admits BSI bank didn't check Jho Low's claim of acting on Najib's behalf

It named Najib along with its former directors Datuk Suboh Md Yassin, Datuk Mohammed Azhar Osman Khairuddin, Nik Faisal Ariff Kamil, Datuk Che Abdullah @ Rashidi Che Omar, Datuk Shahrol Azral Ibrahim Halmi and Tan Sri Ismee Ismail in May 2021.

However, later, it removed six names from the suit and retained Najib and Nik Faisal as the first and second defendants.

Additionally, Najib has brought the former named SRC International directors as third-party respondents in the suit.

Najib was SRC’s Emeritus Advisor from May 1, 2012, until March 4, 2019.

The company is seeking damages, interests, costs and a court declaration that Najib is responsible for the company’s losses due to his breach of duties and trust, and is demanding that Najib pay back the US$1.18bil in losses that it has suffered.

ALSO READ: ‘SRC millions funnelled out’

It is also seeking US$120mil and US$2mil from Najib and Nik Faisal respectively, on account of fraudulent breach of fiduciary duties and breach of trust.

Najib has been serving a jail sentence at the Kajang Prison since Aug 23, 2022, after being convicted of misappropriating RM42mil in SRC International funds.

After he filed a petition for a royal pardon on Sept 2, 2022, his jail term was reduced from 12 years to six years and the fine was reduced to RM50mil from RM210mil.

The hearing continues before Justice Ahmad Fairuz Zainol Abidin on March 25.

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