1MDB sues PSI exec, UK law firm for RM8.61bil

KUALA LUMPUR: 1Malaysia Development Bhd (1MDB) is suing Patrick Mahony of PetroSaudi International Ltd (PSI) and a law firm in Britain for US$1.83bil (RM8.61bil) for alleged dishonest assistance in an investment it partook in.

The sovereign wealth fund filed the lawsuit at the High Court registry through law firm Messrs Lim Chee Wee Partnership on May 7.

It named Mahony, who is PSI's chief investment officer, and White & Case LLP as the first and second defendants, respectively.

In the statement of claim, 1MDB stated that it was misled about a multi-billion joint venture agreement (JVA) between the company and PSI.

It claimed that the company's board was fraudulently misled that PSI was owned by King Abdullah of Saudi Arabia when in actual truth it was not.

“1MDB’s eventual joint venture partner was not PSI but PetroSaudi Holdings (Cayman) Ltd.

“The assets that were injected by PetroSaudi Holdings (Cayman) Ltd into the joint-venture company were worth substantially less than US$1.5mil (RM7.06mil) at the material time," it stated.

The company further claimed that the JV was a sham and resulted in 1MDB suffering a complete loss of its investment.

“By reason of the conspiracy, 1MDB has suffered loss and damage of US$1.83bil,” 1MDB said.

1MDB claimed Mahony had acted dishonestly in assisting former prime minister Datuk Seri Najib Razak in breach of fiduciary duties and Mahony had participated in the scheme to defraud substantial sums of monies from 1MDB.

It claimed Mahony had engaged and instructed White & Case in the JV, whereby the law firm also had acted dishonestly in the fraud.

"The defendants wrongfully and with intent to injure 1MDB by unlawful means conspired and combined together with the intention to injure 1MDB through unlawful means," the company said.

The plaintiff is seeking a court declaration to compel both defendants to repay US$1.83bil to the company, interests, costs and other reliefs deemed fit by the court.