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Saturday, April 23, 2016

PetroSaudi keeping mum on link to PM Najib

The Saudi Arabian oil company at the centre of one of the most disputed transactions of Malaysia’s corruption scandal has ­refused to say whether it owns the entity that received $US1 billion ($1.3bn) from the 1MDB state investment fund, after revelations information confirming that it did not were removed from a key ­report.

PetroSaudi International dodged questions from The Weekend Australian over the ownership of Good Star, a ­Seychelles company it ­previously has claimed to own, days after the chairman of Malaysia’s Public Accounts Committee ­admitted removing references to Good Star’s ownership from a damning report into 1MDB.

The censored sentence ­referred to the fact Malaysia’s central bank had determined Good Star Limited, which ­received $US700m of a $US1bn payment in 2009 by 1MDB meant for its PetroSaudi International joint-venture partner, was unrelated to PetroSaudi.

“Bank Negara Malaysia had been informed voluntarily by the authorities of that country that Good Star Limited is a company owned by an individual that has no links to the PetroSaudi Group,” it had read.

According to online site Sarawak Report, Good Star is ­controlled by Malaysian financier Jho Low, a family friend of Prime Minister Najib Razak. Mr Low helped set up the Petro Saudi/1MDB joint venture and has acted as an adviser or ­representative at various times for both 1MDB and PetroSaudi.

PAC chairman Hasan Arifin admitted this week he removed the sentence, which had been approved by all members of the bipartisan committee, ­because it was “unclear”.

PetroSaudi and 1MDB ­management previously have confirmed Good Star is a subsidiary of PetroSaudi and said there was nothing amiss in the alleged diversion of $US700m intended for PetroSaudi in 2009. Another $US330m was paid to Goodstar by 1MDB in 2011.

But in an emailed response to questions from The Weekend Australian this week lawyers for PetroSaudi, a company once part-owned by Prince Turki bin Abdullah Al Saud — apparently the seventh son of the late Saudi King Abdullah bin Abdulaziz Al Saud — refused to say whether it owned Good Star.

Instead it said PetroSaudi had no involvement in the misappropriation of funds from 1MDB, and “all funds invested by 1MDB and associated transfers were made with the approval of the 1MDB board”.

In fact 1MDB’s 2009 investment in PetroSaudi — at the time a little-known company with few funds — sparked great concern among the fund’s board and the eventual resignation of one ­director.

This month’s PAC report into 1MDB mismanagement revealed the board had first demanded the return of the $US700m it said went to Good Star without its consent, and then an independent evaluation of PetroSaudi Cayman’s claimed $US2.7bn worth of assets. That demand was overruled by Mr Najib himself.

The central bank investigated the deal and recommended charges be laid against 1MDB — which the Attorney-General has twice refused to do. So the central bank ­announced last October it was retrospectively cancelling ­approvals for 1MDB to transfer US$1.83bn overseas because it had been given “inaccurate information”, and ordered 1MDB ­to repatriate the funds. It has not done so. 1MDB’s total investment in its PetroSaudi joint venture was $US1.83bn.

As more damning revelations unfolded this week, former prime minister Mahathir Mohamad once again appealed to foreign authorities to help oust Mr Najib.

Dr Mahathir made similar pleas for “foreign interference” in an interview with The Weekend Australian but later distanced himself from the comments after police opened a sedition investigation against him.

Speaking in Dubai, Dr Mahathir called on foreign governments and agencies investigating 1MDB for suspected misappropriation of as much as $US6bn to make public their findings.

“Inquiries that are kept secret are of no use to anyone,” said Dr Mahathir, whose application for a court-ordered freeze on Mr Najib’s assets will be heard today.

“Being diplomatic isn’t going to help Malaysia or anyone else. They must recognise action needs to be taken and do what is necessary.”

The Australian

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