Expert torpedoes DOJ's knowledge on selling superyachts

An expert has torpedoed the US Department of Justice's (DOJ) knowledge on the yacht market and its plans to sell the 1MDB-linked vessel Equanimity in the US.

Allan Wilson, owner of the Wilson Yacht Management Group - the company that operates the Equanimity - said the DOJ and its expert Alan Swimmer did not appreciate the value and scale of the vessel.

"With regard to issues of marketability and sale, the government and Mr Swimmer do not seem to understand or appreciate the difference between a 100-meter yacht - such as the Equanimity - and a 100-foot yacht.

"Some publications may casually put both types of vessels into the same 'superyacht' category, but the reality is that there is an enormous difference between the two," Wilson said in court documents sighted by Malaysiakini.

He said that even if the DOJ's assertion that 45 percent of yacht buyers are in the US was true, the majority of those who buy vessels the size of the Equanimity are "Middle Easterners - especially royalty, Russians, and a smaller number of Europeans and Chinese."

"There are of course North Americans who are capable of purchasing a 100-meter yacht, but most either already have one or have already commissioned one," Wilson added.

He said this in a written declaration in support of an ex parte application by the Equanimity's owners and operators to stop the DOJ from harming the value of the vessel.

Both the DOJ and the companies in charge of the Equanimity have agreed to work out a deal to sell the superyacht, which was seized by Indonesian authorities late last month, but disagree on where to sell it.

Swimmer in his declaration to support the DOJ plan to sell the Equanimity in the US, said vessels that are part of civil forfeiture suits, such as the Equanimity, would fetch a higher price if sold in the US, due to assurance that it would have a clean title and free of liens - or right to keep property until debts are paid.

He also said yachts sold in the US were only subject to a nominal duty of 1.5 percent of the vessel's value, which is lower than the value-added tax that would be imposed should the boat be sold in Europe or other countries.

However, Wilson disputed this, saying the sale of the Equanimity would come with a clean title and be free of liens regardless of where it is sold, as long as fees owed to his company for managing the vessel are paid.

He added that yacht sales negotiated in Europe are usually finalised in international waters, and thus would not be subject to tax.

"This is a perfectly legal transaction that is commonly executed," he said.

Meanwhile, another expert, Merle Wood, said in a separate declaration that to maximise the value of the Equanimity, it should be promoted and marketed on the luxury yacht show circuit, which is concentrated in the Mediterranean.

The Equanimity is one of several assets that the DOJ is seeking to seize as part of its 1MDB-related civil forfeiture suits.

The department claimed that businessperson Jho Low had used US$250 million, allegedly misappropriated by 1MDB, to purchase the Equanimity.

1MDB has denied that any of its funds are missing. -Mkini