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Putrajaya says not liable for US$1.2b payment by 1MDB to IPIC

Free Malaysia Today logo Free Malaysia Today 9/2/2018 V Anbalagan

a close up of a sign: 1mdb-ipic © Provided by MToday News Sdn Bhd 1mdb-ipic KUALA LUMPUR: Putrajaya is denying liability in a lawsuit filed over its payment of US$1.2 billion (RM4.72 billion) to Abu Dhabi-based International Petroleum Investment Company (IPIC).

The government, who together with Prime Minister Najib Razak and 1MDB are defendants in the suit, said the action by the plaintiffs Gerakan Anakmuda Tolak Najib (Ganti) was wrongful understanding of the law.

“There is no nexus between the facts alleged against Najib and 1MDB to the government,” said the defence document filed in the High Court today and sighted by FMT.

The defence document admitted that the Arbitration Act 2005 was applicable on the government but said it had no relevance to them in the suit brought by the plaintiffs.

The government further said the plaintiff comprising opposition youth members, had no legal standing to bring the action and that it was an abuse of the court process.

Interestingly, the government did not specifically address the Aug 1, 2016 statement by Second Finance Minister Johari Abdul Ghani that Putrajaya would fight the arbitration claim which formed part of the plaintiffs basis to file the suit.

However, in April last year, it was revealed that the finance ministry decided not to contest, and entered into a consent award to pay US$3.5 billion to IPIC subsidiary Aabar Investment PJS.

Najib and 1MDB have been spared from filing their defence after the Court of Appeal on Monday allowed their stay applications.

On July 11, the plaintiffs sought a court order that the settlement agreement between IPIC and 1MDB at the London International Court of Arbitration on May 11 be declared invalid.

Ganti also sought to compel Najib, the government and 1MDB to provide detailed accounts of all the money paid to IPIC and its subsidiary, Aabar Investment PJS.

It claimed the consent award agreed on between IPIC and Aabar Investment PJS in London was wrong and fraudulent.

The group said it was forced to sue Najib and the other two defendants as no action had been taken against those who made the “fraudulent payments” to the British Virgin Island-registered Aabar Investment PJS Limited, or Aabar BVI, which IPIC claimed was not its subsidiary.

IPIC’s subsidiary is Aabar Investment PJS (without the Limited).

As per the settlement, 1MDB said it would, among others, make certain payments to IPIC and assume responsibility for all future interest and principal payments for two bonds issued by the 1MDB group of companies, due in 2022.

1MDB previously claimed it had paid IPIC’s subsidiary, Aabar BVI, a total of RM3.51 billion between 2012 and 2014.

However, IPIC disputed this in 2016, claiming it never received the money.

1MDB had paid IPIC US$1.2 billion in two equal payments on July 31 and Dec 31.

Meanwhile, lawyer Mohamed Haniff Khatri Abdulla, said High Court judge Hue Siew Kheng has fixed another case management on March 26.

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