The public face of the deal was an Arab injection of money into Malaysia – the hidden agenda was a quick flip deal to net a half billion dollar profit.
Sarawak Report has obtained more shocking emails written by the PM’s crony businessman Jho Low in 2011.
The emails detail an insider trading conspiracy, in which Low cites the support of “HE Prime Minister of Malaysia” in a scheme to net USD500 million.
The conspiracy was hatched in April 2011, according to the email trails in our possession.
The plan was to orchestrate a quick flip sale of RHB bank shares owned by the Abu Dhabi Commercial Bank (ADCB), in the full knowledge that two of Malaysia’s own banks CIMB and Maybank were in the process of seeking a merger with RHB.
Using their insider knowledge and the controlling influences of the Malaysian authorities, Jho Low and his business partners, who were the UK based investor Robert Tchenguiz and the then Chairman of Abu Dhabi’s Aabar fund, Khadem Al Qubaisi, expected to profit by at least half a billion US dollars.
This was to be at the expense of the Abu Dhabi public bank and the two Malaysian banks, expected to eventually buy the 25% share of RHB.
Writing to Tchenguiz 31st May 2011 Low gloated at the prospect of a 50:50 deal on a USD500 million dollar profit:
“Now that the MayBank & CIMB process is happening simultaneously, we can be sure our exit will be likely faster within 6 to 18 months…Our lawyers are drafting up the USD100 million first lose guarantee for 24 months (with a 12 month extension) to be issued in favour of Aabar in return for a 50:50 net profit equal share so that our interests are mutually aligned in this partnership……. Our expectation is a minimum of USD500m net-profit for us jointly within 18 months or less.”
The most shocking aspect of this illegal plan was that Jho Low’s emails claimed he had the knowing consent of the PM at every stage, leaving glaring questions as to the PM/ Finance Minister’s level of involvement in the plot:
31st May 2011“I had a meeting with HE Prime Minister of Malaysia (“HE PM”) this evening whom has subsequently spoken to the Central Bank Governor and the following has been established:Malaysian Government Position:Once ADCB Board approves to sell its stake to Aabar at 2.2x Q1 2011 book, both ADCB and Aabar will write in simultaneously to the Central Bank of Malaysia (“BNM”)to request for approval to negotiate…..“It is important to put pressure on ADCB Board to ensure they agree on our price and that they only write to BNM for approval to negotiate with Aabar and not the other bidders”….“HE PM and BNM Governor has agreed that Abu Dhabi will first be allowed to sell its 25% stake in ADCB to Aabar prior to the CIMB/MayBank bidding war to take-over or merge with RHB Bank occurring. Even in the event of a merger, Aabar’s shares in RHB Bank would be underwritten or taken-out”..I would recommend…..Goldman Sachs (Asia) for International Advisory since they .. can quickly assist in the 2nd sale from Aabar to Maybank/CIMB.”
wrote Low in a devastating 3 page email (see below) which was forwarded to a number of contacts, in which he detailed the plot to quick flip the RHB shares through a “2nd sale” to the Malaysian banks, who were being excluded from bidding directly with ADCB.
Confident of making half a billion dollars (see full email below)
I had a meeting with HE Prime Minister of Malaysia evening
The most sensational aspect of this blatant and greedy wheeler-dealing is Jho Low’s open email confession to his business partners that he was carrying out this attempted raid on publicly owned banks at the behest of the Malaysian Prime Minister cum Finance Minister, Najib Razak.
The emails in our possession were sent between April and June of 2011 and they predicted the pattern of subsequent transactions, which later took place.
ADCB (Abu Dhabi Commercial Bank) sold their 25% share of RHB to the sovereign wealth fund Aabar at the very moment that CIMB/MayBank set about their attempted merger with the bank.
And within weeks of the buy up Aabar was attempting to profit by selling on those shares to the parties to the merger.
In the first communication between the collaborators obtained by Sarawak Report, Tchenguiz contacted Aabar’s Khadem al Qubaisi (who has now been recently sacked as a result of related scandals) on 20th April 2011 to say that Jho Low had “alerted” him to “an opportunity” on a trade valuing around USD$2 billion:
“National Bank of Abu Dhabi is currently a 25 per cent shareholder in the 4th largest Malaysian bank called RHB… Jho Low has alerted us about this opportunity. The trade is circa 2b dollars” wrote Tchenguiz.
Research by Sarawak Report has shown that this introduction by Tchenguiz of the well-connected Malaysian Jho Low to the Aabar fund manager soon sparked a frenzy of mutual activity between the two men.
The pair embarked on numerous deals involving Aabar, backed by 1MDB, all of which provided ample opportunities for large private commissions to Jho Low companies.
Indeed, by the following month, according to a British court judgement, Aabar, Jho Low and 1MDB were already tying together over a multi-million dollar deal to buy out a London Hotel group.
Again, the link was Tchenguiz:
Introduced by Tchenguiz in April and working together on deals by the following month, as well as dealing over RHB bank
Over subsequent years and months 1MDB engaged in a pattern of deals raising money through Aabar, all of which have contributed to the present parlous position of debt at the development fund.
HE PM has agreed… BNM will approve within 24 hours
We can now reveal the full extent of Jho Low’s plan to quick flip the RHB shares, which was laid out in a 3 page email (below) sent by Jho Low on 31st May 2011 entitled “Updates Re Project Red Transaction”. The email was eventually forwarded to a number of related contacts.
Khadem al Qubaisi, key player at Aabar
As a former senior officer at ADCB himself Al Qubaisi was clearly being addressed as someone who could still exert influence on the decisions of the shareholder bank, while controlling the buyer Aabar as well, through his role as then Chairman.
Jho Low explained how the well-positioned conspirators would use their combined influence to secure an advantageous trade on the RHB shares, thanks to the stated support of the Malaysian Prime Minister, who would prevent other parties from buying up the shares, even if they came in with a higher bid.
According to Low’s email, the PM was agreeing to support the Aabar bid, based on the calculation of a future “2nd sale from Aabar to MayBank/CIMB”.
This was even though Jho Low said that he “confidentially” knew a number of other banks were prepared to pay “much higher” than Aabar for the shares, so they needed to be kept out of the picture.
Facade for PR purposes?
The Penang businessman, whose close links to Najib and the investment decisions of the failing development fund 1MDB are now the subject of growing national and international scandal, also said the PM had collaborated in a decision to stage a public event in June in Kuala Lumpur.
This was in order to present the Aabar purchase in a positive PR light for his government:
“He PM has indicated he would like a MOU/Binding Term Sheet/SPA signed subject to relevant approvals in conjunction with HH Crown Prince of Abu Dhabi’s official visit to Malaysia on 16/17th June 2011 and will formally invite Aabar and IPIC [parent fund] senior officials.[this] is important for HE PM as it will show that Abu Dhabi is committed in investing in Malaysia with Aabar’s USD2b+ transaction in RHB Bank.
Jho Low (right back) accompanies PM’s wife during Aabar 1MDB JV negotiations in 2013
Yet, the rest of the email implies that the PM was well aware that Aabar was not ‘committed’ at all and was planning instead to make a lightening profit at the expense of Malaysia’s own banks, which were being prohibited from engaging in the first stage of the buy-out.
One of these two victim banks was of course none other than CIMB, whose Chairman is Najib Razak’s own brother.
“Project Robbie” was the code name adopted by Jho Low for this transaction in the 3 page email, which is reproduced below:
Team of seasoned operators
Notably, in this shockingly explicit email Jho Low recommended using a raft of professionals, who had already engaged in suspect deals with himself and 1MDB or were about to enter future highly contentious deals.
Goldman Sachs Asia’s Tim Leissner (left) and model wife, who is a friend of Najib Razak’s (second right) wife Rosmah
These included the law firm Wong & Partners, who had nodded through his billion dollar heist in 2009 against 1MDB, using the joint venture deal with the company PetroSaudi.
Also the bankers Goldman Sachs, who were later to cause uproar over their secret commission charges for raising funds for 1MDB power purchases (again in collaboration with Aabar and Al Qubaisi).
AmBank too was recommended by Low to take part in the deal. This was the bank involved in the earlier purchase of UBG group. At the time AmBank had raised concerns that the vehicle being used for the buy-out, PetroSaudi Seychelles, had no actual connection with the PetroSaudi International group, as was being claimed.
Yet the bank nevertheless accepted a dubious excuse for this illegal transgression, which was that Prince Turki bin Abdullah needed to avoid publicity.
The real reason, as Sarawak Report has amply demonstrated, was that the money used to buy out UBG had come from 1MDB and not PetroSaudi.
AmBank queried their concern at the illegal discrepancy, but eventually agreed to overlook it.. useful partners for Jho Low?
In a separate email trail an AmBank employee explained and accepted the excuses given by PetroSaudi directors for the illegal subterfuge, presumably sealing its position as a partner for Jho Low’s approach to business:
Insider traders
Yet the role of all these partners ought now be investigated. At the time of this UBG deal in 2010, dubbed Project Uganda, Jho Low had made clear why he favoured code names for such projects:
” KINDLY DO NOT STATE any reference to persons, or people’s names in reply to e-mails due to sensitivities in UBG Bhd deal and “insider trading” issues, etc.)” he warned in an email entitled “Updated – UBG Bhd Acquisition”:
Keep it anonymous, given the insider trading issues…
Owned by the Chief Minister of Sarawak
The above email from Jho Low also significantly referred to shares in UBG as being “stakes owned by the Chief Minister of Sarawak”.
Abdul Taib Mahmud (who remains the present Governor of the state) was the first leading political figure to develop a close relationship in Malaysia with Jho Low, even though he has always maintained that he has never “done business” in Sarawak.
What better evidence that Taib’s denials are lies, than this statement from his business colleague on the then Board of Directors of UBG?
Our latest information about similar activities over the RHB Bank buy out merits a thorough investigation over how decisions were being taken by the Finance Ministry and the influence being exerted by Jho Low.
Sting in the tale
The RHB deal has nevertheless turned out to be far less immediately lucrative than Jho Low had promised his business partners.
True to their original plans, by September of 2011 it was duly being reported that Aabar was indeed working with Goldman Sachs on the planned ‘2nd sale’, which it described as an attempt to “protect itself” from the ‘merger war’.
Not all as things seemed?
However, it soon became clear the cunning trade was falling flat, as the price of RHB shares plunged below Aabar’s buy up price:
“Aabar bought its RHB stake from Abu Dhabi Commercial Bank PJSC for 10.80 ringgit per share in 2011, when RHB was the target of a takeover battle between the country’s biggest lender Malayan Banking Bhd. and CIMB. RHB shares traded at 8.86 ringgit at 3:07 p.m. today in Kuala Lumpur, 18 percent below Aabar’s purchase price.[Bloomberg]
Over coming months Aabar’s determination to sell way above, instead of way below, its purchase price started to derail the merger deal and Aabar’s planned profit.
And by the end of 2014 the struggle was continuing as Aabar was still insisting on a higher price than market value:
Deals |Abu Dhabi state fund asks for more in $22 billion Malaysia banking deal
DUBAI/KUALA LUMPUR |Aabar Investments is demanding a hefty premium for its minority stake in Malaysia’s No.4 bank, sources say, as the Abu Dhabi state fund leverages on its amplified role in a $22 billion merger that will create Southeast Asia’s fourth-largest lender.When the Malaysian stock exchange last week barred the Employees Provident Fund (EPF) from voting on a plan to merge CIMB Group Holdings (CIMB.KL), RHB Capital Bhd (RHBC.KL) and Malaysia Building Society Bhd (MBSB) (MBSS.KL) due to the state pension fund’s majority ownership in the three lenders, the spotlight was suddenly thrown onto secondary shareholders.Aabar [INPTVA.UL], which owns 21 percent of RHB, wants its stake in the bank to be valued at 11-12 ringgit per share, sources familiar with the deal said. That would be as much as 11 percent more than what Aabar paid three years ago for its RHB holding and above the value placed on RHB of 10.03 ringgit per share in the proposed merger.[Reuters]
In the event, it seemed that the PM’s brother and the head of CIMB proved simply unwilling to pay out his shareholders’ money on Jho Low’s quick flip profit:
“ADCB and Aabar tried to force Maybank and CIMB to fork out the money with the 10.80 ringgit bid, but they didn’t realise that they would walk away,” [an industry insider told Arabian Business Mag]
So many close connections. The wife of Goldman Sachs Asia’s Tim Leissner and Rosmah Mansor.
So, by the start of 2015 it appeared that the sale and merger talks had gone the way of many planned financial deals in the wake of plummeting confidence over Malaysia’s economy and 1MDB.
Relations between the PM cum Finance Minister and his brother in charge of CIMB have been publicly frosty in recent months.
Could this episode have had something to do with it? -Sarawak Report
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