1Malaysia Development Bhd., the troubled Malaysian state fund that’s the subject of
global investigations, said it could be a victim of fraud if
payments of $3.5 billion intended for an Abu Dhabi sovereign wealth fund
never made it there.
Abu Dhabi’s International Petroleum Investment Co. this week
denied ownership of a company that received the funds known as Aabar
Investments PJS Limited or Aabar BVI.
Swiss authorities said on Tuesday they are investigating two former
public officials from the United Arab Emirates, who handled Abu Dhabi
sovereign wealth funds that guaranteed 1MDB bonds.
"Given the recent denial by IPIC and the announcement by the
Office of the Attorney-General of Switzerland, indicating that 1MDB
could be a victim of fraud, 1MDB is exploring all avenues open to us,"
the company said in a statement on Wednesday.
Authorities from the U.S. to Switzerland and Singapore are trying to
determine if some of the billions of dollars that 1MDB raised were
siphoned out inappropriately. 1MDB, whose advisory board is headed by
Prime Minister Najib Razak, amassed more than 50 billion ringgit ($12.9
billion) of debt over six years, using some of it to buy energy assets,
including joint ventures with companies in Saudi Arabia and Abu Dhabi.
Questionable Transactions
A report by a Malaysian parliamentary committee last week
identified at least $4.2 billion of questionable transactions by 1MDB
including those that involved the Abu Dhabi companies. The bipartisan
group said it couldn’t verify a $2.1 billion payment to Aabar
Investments PJS Ltd., while another $1.37 billion was sent to the
company without the approval of 1MDB’s board.
IPIC has a unit that goes by the name of Aabar Investments
PJS, without the Ltd. contained in the company that 1MDB transferred
money to. 1MDB said it negotiated "various legal agreements" with the
previous heads of IPIC and Aabar and called it a "surprising claim" that
neither of the Gulf companies knew of payments to Aabar BVI.
"1MDB is confident of its legal position in relation to the
$3.5 billion cash deposits paid to Aabar BVI," the Malaysian fund said
in a separate statement on Tuesday.
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