Petrosaudi International executives Tarek Obaid and Patrick Mahony had purportedly discussed what to tell the then prime minister Najib Abdul Razak about 1MDB’s investments in August 2010.
What to tell:
- To quickly invest another US$500 million
- If 1MDB did not want to invest, the money could come from EPF or Petronas
- Appoint a more reliable person than Jho Low for the execs to work with
What not to tell:
- 1MDB lost US$500 million
- Relationship between PetroSaudi execs Obaid and Mahony and Jho Low already in trouble just a year after 1MDB poured US$1 billion into a joint venture (JV)
- US$700 million illegally diverted to Low’s company
- JV on shaking grounds, so trio sought another US$500 million from 1MDB
- 1MDB later invested another US$800 million, taking the total investment to US$1.8 billion, which now forms part of the worthless “units” cited in its accounts
- PetroSaudi-1MDB scam exploded in 2015
- Mahony is now said to be in UK, Obaid believed to be in Switzerland
At the time, 1MDB had invested US$1 billion into its joint venture with Petrosaidi about a year earlier, of which US$700 million had been allegedly diverted into the company Good Star Ltd that was supposedly owned by the Penang-born tycoon Low Taek Jho.
In a report titled ‘How PetroSaudi executives plotted what to tell Najib’, The Edge claimed it had sighted an email between the two Petrosaudi executives where Mahony supposedly told Obaid that Low had conceded that 1MDB would take a US$500 million loss on the investment. They were seeking another US$500 million from 1MDB.
Malaysiakini had also sighted the email, dated Aug 7, 2010, titled ‘Malaysia discussion tomorrow’.
Mahony supposedly told Obaid to conceal the 1MDB losses from Najib, but instead, impress upon him the importance of 1MDB quickly investing another US$500 million.
It was also proposed that if 1MDB did not want to invest, the money could come from the Employees’ Provident Fund (EPF) or Petronas instead.
“I think saying delays have cost us helps us because we can then blame them for the losses later,” Mahony supposedly told Obaid in the email.
Mahony also supposedly told Obaid to tell Najib to privately appoint another person for them to work with, and that person should be more reliable than Low.
He said Najib should be told that while “we really appreciate the relationship, it is difficult to talk about many more things when we know the one guy we need to speak to is just too busy with many other things or out partying.”
1MDB eventually ended up investing a total of US$1.8 billion in the joint venture with Petrosaudi before the venture was wound up. It took US$1.2 billion in debt notes for selling its equity but the notes were purportedly worthless.
According to the US Department of Justice (DOJ), over US$1 billion had been diverted from the joint venture to Good Star, and then onwards to numerous individuals and other purchases.
Of the amount, US$153 million supposedly ended up with Obaid, while about US$10 million went towards producing the film ‘The Wolf of Wall Street’. An unnamed “1MDB Officer 1” received US$5 million. Low supposedly used the funds to buy various properties.
The DOJ had listed Low and Obaid as among the “relevant individuals and entities” in relation to its series of civil forfeiture suits aimed to seize properties purportedly to be the proceeds of the misappropriation of 1MDB that had been channelled through the US financial system.
Low had claimed that the DOJ’s allegations against him were politically motivated.
In an exclusive interview with Malaysiakini, Najib said it was the late King Abdullah who had given him the blessings for 1MDB to enter into a joint-venture with PetroSaudi.
PetroSaudi is owned by Prince Turki Abdullah Al Saud. He is the seventh son of the then reigning King Abdullah. Prince Turki later became deputy governor and then governor of Riyadh, which is Saudi’s largest province.
The former premier also explained the reason for Jho Low being given a prominent role and that the latter informed him after allegations of embezzlement surfaced that he was acting on behalf of a Middle-Eastern royal member. – Malaysiakini