1Malaysia Development Berhad scandal

The 1Malaysia Development Berhad scandal is a political scandal that is taking place in Malaysia. In 2015, Prime Minister Najib Razak was accused of sending over 2.67 billion Malaysian ringgit (about US$700 million) from 1Malaysia Development Berhad (1MDB), a government-run company that was made to develop the country's economy, to his own bank accounts. Many Malaysians called for Najib to resign because they did not want a corrupt prime minister. In 2018, Najib was defeated in an election by Mahathir Mohamad.

A Malaysian politician, Anwar Ibrahim, has asked questions about the true purpose of 1MDB. He told Parliament that the company "has no business address and no appointed auditor" to check the company's finances. According to records, 1MDB has nearly RM 42 billion (US$11.73 billion) in debt.

Introduction

"Berhad" is a Malay word that means limited. In this case it means a limited company. That means that a company's finances are separate from those of the owners. Members of the public may not own shares in the company.

Timeline

2009

July

• 1MDB is founded with Najib Razak as the advisory board chairman.

September

• 1MDB enters into a US$2.5 billion joint venture with Saudi oil company PetroSaudi International.

2010

May

• 1MDB signs deals with sovereign wealth funds in Qatar and Abu Dhabi, U.A.E. It also starts developing the old airport in Sungai Besi and the project is named Bandar Malaysia.

2012

March

• 1MDB buys Tanjong Energy Holdings for $2.81 billion from Ananda Krishnan.
• Najib starts the Tun Razak Exchange project.

May - October

• US investment bank Goldman Sachs helps 1MDB sell bonds worth $3.5 billion.

2013

March

• Goldman Sachs helps 1MDB get a further $3 billion in an additional bond sale, this time to cover "new strategic economic initiatives" between Malaysia and Abu Dhabi.

May 5

• Malaysia's 2013 General Elections is held. Najib's Barisan Nasional coalition wins the simple majority but the opposition coalition Pakatan Rakyat, led by Anwar Ibrahim, wins the popular vote.

December

• The movie The Wolf of Wall Street, which stars Leonardo DiCaprio is released. The movie credits Jho Low.

2014

March

• 1MDB is reported to be over $10 billion in debt.

2015

January

• Around 227,000 leaked documents related to the fraud are handed to Sarawak Report editor Clare Rewcastle-Brown, and to the Wall Street Journal. The documents were reportedly leaked by Xavier Andre Justo, a retired Swiss banker, who had worked with PetroSaudi.

May 29

• 1MDB gets a US$1 billion injection from Abu Dhabi's International Petroleum Investment Company, which will be used to repay a US$975 million loan from international bank lenders.

June

• Malaysia's central bank launches an investigation into 1MDB.

July 2

• The Wall Street Journal releases a report saying that US$700 million (RM 2.6 billion) of deposits have gone into Najib's personal bank accounts.

July 4

• Najib denies allegations that the cash was found in his bank accounts.

July 7

• A special task force formed to investigate allegations that millions of dollars had been channeled into Najib's bank accounts announces a freeze order for six accounts linked to the case.

July 8

• Police raid the 1MDB office.

July 9

• The Attorney-General's Chambers says that the six accounts which were ordered to be frozen were not linked to Najib, as his accounts with AmBank Islamic had already been closed by then.

July 20

• News website Sarawak Report is blocked by the Malaysian government and an arrest warrant is issued for editor Clare Rewcastle-Brown.

July 28

• Following criticism, Najib changes members of his cabinet. Deputy Prime Minister Muhyiddin Yassin and Rural and Regional Development Minister Shafie Apdal are dropped.
• Attorney General Abdul Ghani Patail is also fired and replaced by Apandi Ali.

August 3

• The MACC announces the task force has completed its investigation. It revealed the $700 million that allegedly went into Najib's accounts were from donations and had nothing to do with 1MDB.

August 17

• Thai authorities hands Justo a three-year jail sentence after he pleaded guilty to stealing information from PetroSaudi International (PSI).

August 29-30

• The Bersih 4 rally was held. Thousands come, including former prime minister Mahathir Mohamad and his wife Siti Hasmah. Mahathir. Participants urge Najib to resign.

September

• Several countries, including Hong Kong, Australia, Singapore and Switzerland, begin investigating financial firms and banks Najib allegedly used to siphon funds.

October 20

• Thai police give Malaysian counterparts approval to question Justo.

November 25

• 1MDB CEO Shahrol Halmi is questioned by Malaysia's Public Accounts Committee (PAC). He is later called back in on November 30 for further questioning.

December 1

• PAC questions 1MDB president Arul Kanda Kandasamy.

December 5

• Najib gives a statement to the MACC on the issue of the almost US$700 million found in his personal bank accounts and on SRC international.

December 31

• MACC submits 1MDB investigation papers to the Attorney General.

2016

January 26

• Attorney General Apandi Ali clears Najib of any wrongdoing, saying in a statement that US$681 million transferred into Najib's account was a "personal donation from the Saudi royal family". "A sum of US$620 million was returned by the Prime Minister to Saudi royal family because it was not [used]," the statement adds.

January 29

• Swiss prosecutors request assistance from Malaysian authorities as they believe around US$4 billion was stolen from Malaysian state-owned companies. "A small portion" of the cash was transferred into Swiss accounts held by former Malaysian officials as well as current and former officials from the United Arab Emirates, the Swiss attorney general's office says in a statement.

February 1

• Singapore's Commercial Affairs Department (CAD) and the Monetary Authority of Singapore (MAS) issue a statement, saying a "large number" of bank accounts in relation to a probe into 1MDB have been seized.

February 3

• Kedah Menteri Besar Mukhriz Mahathir resigns.

February 7

• Saudi Arabia's Foreign Minister Adel Al-Jubeir says he believes the funds that went into Najib's personal account were not a political donation from the Saudi government, but that they had been part of a business deal.

February 19

• 1MDB says in a statement that a Wall Street Journal report stating that it paid funds into the personal accounts of Najib is an "outright lie".

February 29

• Mahathir announces his departure from UMNO and also his withdrawal of support from Najib.

March 23

• Malaysia central bank governor Zeti Aktar Aziz says Bank Negara has initiated administrative punitive action against 1MDB after it failed to provide documents on its finances abroad.

March 31

• The Wall Street Journal publishes a report claiming that Najib spent money on luxury goods overseas, using funds diverted from 1MDB.

April 2

• 1MDB denies reports that it provided funds to finance the movie The Wolf of Wall Street.

April 5

• Pandan MP Rafizi Ramli is arrested under the Official Secrets Act (OSA) for leaking the Auditor General's 1MDB report.

April 7

• 1MDB's board of directors offer to resign after a report released by the parliamentary Public Accounts Committee said it found the state investment fund's financing and performance "unsatisfactory".

April 9

• PAC chairman Hasan Ariffin says there is no evidence to indicate any wrongdoing or abuse of power by Najib.

April 12

• Swiss authorities expand their investigation into 1MDB to two former officials in charge of Abu Dhabi funds.
• Singapore's Attorney-General's Chambers receives a request for legal assistance from Switzerland with regard to 1MDB.

April 13

• 1MDB CEO Arul Kanda Kandasamy says the state investment fund could be a victim of fraud. This is after the Abu Dhabi fund, the International Petroleum Investment Company, denied receiving payment from 1MDB.

April 19

• Mahathir applies for a court order to freeze Najib's assets.
• 1MDB also says it is working to resolve the dispute with International Petroleum Investment Company.

April 28

• Malaysia's central bank fines 1MDB for "failure to fully [follow] directions under the Financial Services Act".

May 24

• The Monetary Authority of Singapore says it has ordered the closure of Switzerland's BSI Bank in Singapore over "serious breaches of anti-money laundering requirements, poor management oversight of the bank’s operations, and gross misconduct by some of the bank’s staff".

May 31

• Malaysia's Ministry of Finance announces the appointment of a new board of directors for 1MDB, succeeding the previous board.

July 11

• 1MDB agrees to resolve its dispute with International Petroleum Investment Company via the London Court of International Arbitration.

July 21

• United States Attorney General Loretta Lynch announces the filing of civil forfeiture complaints seeking the forfeiture and recovery of more than US$1 billion in assets associated with an alleged international conspiracy to launder funds misappropriated from 1MDB.

August 9

• Justo receives a royal pardon and has his three-year sentence reduced by one third.

October 11

• The Monetary Authority of Singapore orders the Singapore branch of Falcon Bank to stop operations for serious failures in anti-money laundering controls and improper conduct by senior management. MAS also imposes fines on DBS and UBS banks for breaches of its anti-money laundering requirements. This comes after "supervisory examinations by MAS into 1MDB-related fund flows" that took place through the three banks from March 2013 to May 2015, MAS said.

December 2

• MAS fines Standard Chartered Singapore and Coutts & Co for breaches of anti-money laundering requirements that occurred in the context of 1MDB-related fund flows.

2017

March 22

• US authorities plan to file criminal charges against Jho Low, who is suspected to be at the center of the 1MDB scandal, the Wall Street Journal reports.

April 24

• 1MDB reaches a settlement deal with Abu Dhabi's International Petroleum Investment Company.

May 30

• The Monetary Authority of Singapore announces the completion of its two-year review of the banks involved in known 1MDB-related transactions. It says it has imposed financial penalties on Credit Suisse and United Overseas Bank, issued Prohibition Orders against three individuals and served notice of its intention to impose regulatory action on three others.

June 15

• US authorities seize another US$540 million in assets, allegedly stolen via 1MDB.

June 16

• The US Justice Department files a civil lawsuit, which claims that nearly US$30 million of funds stolen from 1MDB was used to buy jewelery for the wife of "Malaysian Official 1".

August 1

• International Petroleum Investment Company gives 1MDB five days to make a US$600 million payment, which it failed to pay on July 31. 1MDB says it will make the payment within the month.

August 2

• Najib says 1MDB's failure to make the US$600 million payment to International Petroleum Investment Company was "a technical matter, and not a question of not being able to pay back".

August 11

• 1MDB says it has sent US$350 million to International Petroleum Investment Company. This comes after Abu Dhabi extended the deadline for 1MDB to make its US$600 million debt repayment, provided at least US$310 million was paid by 12 Aug

August 30

• 1MDB says it has finished paying off the money to IPIC.

October 23

• Malaysia asks Interpol to try to locate Jho Low for questioning over his suspected involvement in the 1MDB scandal.

November 1

• The Monetary Authority of Singapore issues prohibition orders against two individuals involved in breaches related to 1MDB.

December 19

• The Monetary Authority of Singapore issues more financial bans in its 1MDB investigation.

December 27

• International Petroleum Investment Company says 1MDB has paid the settlement amount in full.

2018

February 28

• Indonesian authorities seize Jho Low's yacht, "Equanimity, at Bali.

May 9

• Opposition coalition Pakatan Harapan, led by Mahathir, wins in the country's general elections, defeating Najib and his Barisan Nasional coalition.

May 12

• Najib and his wife Rosmah Mansor are banned from leaving Malaysia. He later resigns as UMNO and Barisan Nasional chairman.

May 16-17

• Malaysian police seize luxury items from residences owned by Najib.

May 21

• A special task force that will look into possible criminal conduct of individuals involved in the management of 1MDB has been set up.

May 22

• Najib is questioned by the MACC.

May 24

• Najib is questioned by the MACC for the second time.
• The 1MDB task force has a meeting with the FBI and the United States' Department of Justice (DOJ) officials.

June 5

• Rosmah is questioned by the MACC.

June 7

• Malaysian police issue an arrest warrant for Jho Low and former director of SRC International Nik Faisal Ariff Kamil.

June 19

• In an interview with Reuters, Mahathir describes the 1MDB case against Najib as "almost perfect".

June 27

• Police reveal that the total value of items seized to be worth RM 900 million and RM 1.1 billion (US$220 million and US$269 million).

June 28

• 1MDB CEO Arul Kanda is fired, two days before the end of his contract.

July 3

• Najib is arrested by the MACC. He is charged with four counts of CBT and abuse of power over RM 42 million transferred into his private account from SRC International the following day.

August 4

• Najib is charged with three additional counts.

August 5

• The Equanimity leaves Bali, where it was seized, to Batam island, before arriving at Port Klang two days later.

September 18

• The book, "Billion Dollar Whale: The Man Who Fooled Wall Street, Hollywood, and the World" by Tom Wright and Bradley Hope of The Wall Street Journal is published.

September 20

• Najib is slapped with 25 charges of graft and money laundering over 1MDB transactions amounting to RM2.3 billion.

October 25

• Najib and former Treasury Secretary General Mohd Irwan Serigar Abdullah are slapped with six CBT charges involving RM 6.6 billion worth of government funds.

October 29

• The Equanimity is put up to auction.

December 12

• Najib is charged for reportedly tampering with the 1MDB audit report.
• Arul Kanda is also charged for abetting Najib.

2019

April 3

• Najib's trial on the SRC International begins.
• Equanimity is auctioned off to the Genting group at US$126 million.

May 8

• Attorney General Tommy Thomas says Malaysia has recovered US$322 million (RM1.3 billion) worth of 1MDB assets so far.

'July 4

• Red Granite Pictures founder and producer Riza Aziz arrested in Malaysia on money laundering charges.

August 27

• The High Court sets 11 November as the date to deliver its decision on Najib on the SRC International trial.

August 28

• Najib's 1MDB trial begins.

November 11

• The High Court orders Najib to enter defense on all seven charges involving abuse of SRC International funds.

2020

January 8

• The MACC releases nine phone audio recordings received about a week earlier. They were recorded between January 5 to July 29, 2016 and are about 45 minutes long in all. The recordings reveal Najib's attempts to cover up investigations into the 1MDB scandal, which MACC chief Latheefa Beebi Koya described as "shocking, as there are attempts at cover-ups and subversion of justice". One of the audio recordings featured a conversation between Najib and his wife Rosmah Mansor, who sounded upset at Najib's mishandling on the scandal. In another audio recording, Najib was seeking help from United Arab Emirates Crown Prince Mohammed bin Zayed Al Nahyan to help clear Najib's stepson, Riza Aziz's involvement in the scandal.

March 17

• Officials from the Malaysia's Prime Minister's Office (PMO) said that Malaysia has recovered US$322 million stolen from 1MDB, a fraction of the more than US$4.5 billion US prosecutors say was looted.

April 15

• The US Department of Justice returns US$300 million in funds stolen during the 1MDB scandal to Malaysia.

July 28

• Former prime minister Najib Razak is found guilty of one count of abuse of power, three counts of criminal breach of trust, three counts of money laundering, a total of seven charges. The verdict was announced on the first of five trials related to this scandal.