Book Review – The Sarawak Report by Clare Rewcastle Brown

The Sarawak Report (available here) by eco journalist Clare Rewcastle Brown (CRB) describes her investigations to uncover the 1MDB scandal which has been described as the theft of the century. If you think House of Cards is about US politics, a number of episodes could have been informed by the antics from Malaysia, described in detail in The Serawak Report. Many will be familiar with Malaysian former Prime Minister Najib’s scheme to skim billions from a development fund set up in 2009 with the intent ostensibly to promote development in Malaysia, which blew up with Najib eventually kicked out of office by the electorate in May 2018, then arrested and facing trial on corruption charges.

What is not so widely reported though are the following which is contained in The Sarawak Report:

  • a whistleblower who provided an email cache to CRB was a Swiss National, Xavier Justo who as a former director of the first vehicle to enable the start of the fraud, namely Petro-Saudi (PS) but who left PS with grievances and that he shared with CRB. He was later arrested and jailed in Thailand where he spent 18 months in prison before the full story emerged and at the end of January 2019, was awarded a “gift” of USD2 mio from an anti Najiib Malaysian media mogul. Apparently he is finding it very difficult to open a bank account to receive the money!!
  • PS was essentially a shell company masquerading as an important Saudi owned and connected oil and gas company but it did have some business and indeed enlisted the help of Tony Blair, former U.K. prime minister who agreed retainer fees of US$65,000 per month for advisory services fees to help PS in markets such as Asia (China) & Africa.
  • 1MDB was a PEP, but not by close association to Najib, but actually as was revealed by Clause 117 of the Fund’s Constitution, which later was revealed after many denials from Najib as to his involvement, which provided that total control of the fund, including all investment decisions, and appointments and removals of senior staff as well as sole shareholder being the Minister of Finance. Najib held both prime minister and finance minister roles.
  • Red Granite funded and produced the Oscar nominated film, The Wolf on Wall Street, which depicts the true story of greed and debauchery on a grand scale by fraudster Jordan Belfort, starring Leonardo de Caprio, actor and environmentalist, was run by Najib’s son in law Rizza Aziz and 1MDB adviser and Najib adviser / front man / fraudster Jho Lo. In an ironic twist, the film was banned in Malaysia as considered indecent, Hardly the kind of investment you’d expect coming from a Muslim country like Malaysia to least of all from a domestic development fund.
  • a former deputy Secretary of State for Energy in the US was used by PS to value its assets, to be contributed to the JV with 1MDB as evidence of the JV nature of the deal, with 1MDB contributing an initial US$1 billion in cash, PS was contributing assets which he valued via a desktop exercise at US$2.9 billion, likely to be really valued at around US$2.8 something billion, less than this figure. He added though a disclaimer to his valuation provided by PS to 1MDB that he had not checked any of the materials provided by him to be true or whether any of the assets claimed as owned by PS were in fact so owned. He was paid USD100,000.
  • much of the money taken from 1MDB flowed overseas, via traditional and well known offshore centres such as Singapore, Switzerland, UAE and the Caribbean, in US dollars (giving US law enforcement a unique insight into the case), very much in the style of previous corrupt PEP schemes. Still the remarkable thing about this case was that in a departure from the norm, Najib, held a domestic bank account in his own name at AmBank in Malaysia, (though it was referred to in the Bank under the codename “Mr X”) and had that funded by over US$1 billion such was the confidence or hubris demonstrated by the former PM. Due to the size of the deposits and spending on the account, the Bank has reported on numerous occasions it’s concerns to the Central Bank.
  • One of the Bank’s, BSI, most closely associated with the 1MDB scandal and forced to close following investigations by regulators in both Singapore and Switzerland, actually refused to open accounts that kicked off the fraud by the Swiss Compliance team requesting a detailed list of thoughtful KYC information to PS that they couldn’t provide. Later as one of the main bankers to Jho Lo in Singapore, the MAS would punish the Bank for lax controls as would FiNMA in Switzerland.
  • the lead banker at BSI Singapore Mr Yak, responsible for managing the Jho Lo relationship and 1MDB related accounts, had his assets frozen by his employer, amounting to more than USD10 mio, and was described as the star banker at the Bank. Prison time?

There is much more indeed the Book for example that reveal murder plots, the risks of dealing with poorly governed sovereign wealth funds, the role of facilitators, including Banks and the time taken for other countries law enforcement arms to act and then co operate. Most of all it’s a timely reminder, that this is really about enormous greed, the abuse of power, and the effect on the real victims of such abuse, namely those that deserve much better in Malaysia.

Two more books published that chronicle the scandal are also available.

The Billion Dollar Whale focuses on Jho Low and his role, life and antics, from 2 Wall Street Journal contributors, who themselves did much to expose the scandal; and 1MDB – The Scandal that Brought Down a Government by P. Gunasegaram and KINIBIZ.

0 0 votes
Article Rating
Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments