The Kuwait Connection, The 1MDB Saga Continues

Issue 26

07.06.20 - The 1MDB scandal, one of the largest frauds of the century Last September, fugitive Malaysian financier Jho Low traveled to Kuwait, under the radar of international authorities, authorities in the U.S. and Malaysia pursuing him for his alleged role in a multibillion-dollar fraud.  Mr. Low entered Kuwait despite red notices from international police agency Interpol.

The Kuwait connection has provided Mr. Low means to fend off U.S. and Malaysian investigators who accuse him of masterminding the looting of Malaysian state investment fund 1Malaysia Development Bhd, or 1MDB.

Mr. Low has denied wrongdoing. Low turned to the oil-rich emirate’s royal family in early 2016, as U.S. authorities began closing in and unraveling his life as a jet-setting deal-maker who financed the “The Wolf of Wall Street” movie and extravagant parties that drew Leonardo DiCaprio and other stars.

On visits to Kuwait in early 2016, he sought out the son of the prime minister, Sheikh Sabah Al-Jaber Al-Mubarak Al-Hamad Al-Sabah, whom he met years earlier, and offered to use his contacts in China to steer investments to Kuwait, said a French businessman who was present at their meetings.

The Kuwaiti ties brought Mr. Low new protectors, new business deals and new channels for moving money. Banks there handled hundreds of millions of dollars tied to Mr. Low’s activities, including millions in payments to companies in the U.S. and U.K. to cover his mounting legal fees, according to people familiar with the transactions.

Malaysian investigators say they traced a trail of money from China to a Chinese bank in Kuwait and onward to a Cayman Islands entity partly controlled by Mr. Low that then paid nearly $1 billion for Low-controlled assets in Malaysia to pay some 1MDB debts. The transactions were in Chinese yuan to skirt U.S. attention, the investigators say.

The fiasco may have in turn revealed a conduit for capital flight from the far east through Kuwait to evade capital controls and US regulatory attention as Low was able to move billions of yuan through the country without detection.

Source: Wall Street Journal