Govt says it's not liable for Najib, 1MDB's conduct in IPIC settlement

Bede Hong Bede Hong Updated 6 years ago · Published on 9 Feb 2018 8:08PM · 4 Comments

THE government said it is not connected to Prime Minister Najib Razak and 1Malaysia Development Bhd regarding a controversial multi-billion-dollar loan settlement with an Abu Dhabi investment firm, and that their conduct has no bearing on its liability.

In its statement of defence, filed today by senior federal counsel Alice Loke Yee Ching, the government said there was no “nexus” between the allegations against Najib or the state investment fund, and the government.

The case is in relation to a debt payment dispute in 2016, when the International Petroleum Investment Company (IPIC) sought US$6.5 billion (RM24 billion) from 1MDB and the Finance Ministry.

In May last year, a settlement was reached in London, which Pakatan Harapan youth group Gerakan Anak Muda Tolak Najib (GANT1) is taking to court, to declare it void.

The government – one of the three respondents – is the sole party to file a statement of defence today.

Najib and 1MDB were granted a stay from filing their defence by the Court of Appeal on Monday, pending their appeal to strike out GANT1’s suit.

The government has not made a similar application.

In its statement of defence, the government denied “vicarious liability” towards the liabilities of Najib or 1MDB.

Responding to GANT1’s statement of claim, the government said although the Arbitration Act 2005 was applicable to itself, it denied its relevance, and requested that the court dismiss the suit under the Public Authorities Protection Act 1948.

The government made no remarks as to comments by Second Finance Minister Johari Abdul Ghani on August 1, 2016, that 1MDB would “fight” and not pay the US$6.5 billion in claims made by IPIC and its subsidiary, Aabar Investments PJS (Aabar Asli), via the London Court of International Arbitration.

“We want to fight, and we want to win this case. We cannot make statements that might weaken Malaysia’s position,” Johari had said.

“Based on the documents that 1MDB had forwarded to us, I’m very confident of a positive outcome.

“We are taking the position that we are not paying the interest. We shouldn’t pay. We must win this case.”

The government also made no mention of the 1MDB audit report prepared for the Public Accounts Committee (PAC) in July 2015.

Both Johari’s comments and the PAC report were part of GANT1’s statement of claim.

GANT1’s suit, filed in July last year, was over a consent award at the London Court of International Arbitration entered by 1MDB with IPIC, concerning the former’s alleged US$3.5 billion bond assistance from IPIC and Aabar Asli, for the purchase of an energy plant.

In its statement of claim, GANT1 said IPIC and Aabar Asli had, on June 14, 2016, brought their case to the London court against 1MDB and the government, relating to a US$6.5 billion claim over 1MDB’s failure to honour the contract.

IPIC had claimed that it never received payment from 1MDB, which led to a legal dispute in the London court.

A settlement, however, was reached days before a hearing was schedule to begin last May.

GANT1, led by Amanah Youth deputy chief Faiz Fadzil, is seeking, among others, a declaration that the settlement agreement and consent award signed in London were null and void.

GANT1 is also seeking to compel the three parties to provide detailed accounts of the monies paid to IPIC and Aabar Asli.

On January 9, Kuala Lumpur High Court judge Hue Siew Kheng had dismissed applications by Najib, 1MDB and the government to strike out the suit. – February 9, 2018.

Sign up or sign in here to comment.

Comments

  • he late C.J. Ong once in his judgement said don't stretch the law as an ass.............NOW IT IS...

    Posted 6 years ago by Mohanarajan murugeson · Reply

  • Government of bastards will give stupid excuses.

    Posted 6 years ago by Ali Along · Reply

  • The government’s defence disclaiming any connection to PM Najib and 1MDB sounds ridiculous. How could it be so when 1MDB is wholly owned by the Finance Ministry and Najib is the Finance Minister whose personal approval to every major financial transaction was mandatory under the M & A of 1MDB?
    Further, it was from 1MDB and the Finance Ministry that IPIC sought its claims and it was also with the same two Malaysian parties that IPIC reached its settlement. Isn’t the Finance Ministry part of the Malaysian government?
    And where did 1MDB, an empty shell laden with billions of debts now, get the money to pay IPIC US$1.2 billion recently, if not from the government? If 1MDB or the government claims otherwise, can they substantiate their claims by revealing the source of the US$1.2 billion?
    There is no way the government and PM Najib can disclaim responsibility for the mountain of liabilities incurred by 1MDB as a result of massive embezzlement from this so-called sovereign wealth fund.

    Posted 6 years ago by Kim quek · Reply

  • 1MDB sent money to IPIC look-alike account in BVI, said to be intended to settle contractual obligation to IPIC. The IPIC HQ claimed that they had not been received payment. Had 1MDB been surprised that payment was not received by IPIC, 1MDB should have gotten Interpol to help check where the money in BVI bank which received the 1MDB payment had gone to. Instead 1MDB chose to enter into negotiation at London Court of International Arbitration knowing very well that after a while, 1MDB would lose the case. It would appear that 1MDB knew very well to whom the money sent to in BVI in the name of IPIC was intended, and it was certainly not IPIC for the settlement of contractual obligations. But 1MDB did not bother to try to recover it (Well, they expected IPIC to stage a claim, as planned). Indeed, 1MDB knew also that it would have to make payment to IPIC eventually, with interest included. GANTI's court case seeks to find out what had happened to the money sent to BVI. It seems that the 'mistake ' 1MDB management made in sending, by wire it would appear, in sending USD 3.5 billion or more has made Malaysia lost USD 3.5 billion. The gamble made by the government in 1992-94 amounting to RM 31 billion had at least a chance of winning. That was bad judgement. But this is 'clerical mistakes' and 1MDB thought it not worthwhile to be bothered to recover the money sent because it was just USD 3.5 billion, a small sum. It was said, 1MDB had land assets, and so it can afford to throw money around.

    Posted 6 years ago by Meng Kow Loh · Reply