Posts Tagged ‘Abu Dhabi’

Pompeo: A united GCC is essential for planned MESA alliance

January 13, 2019

US Secretary of State Mike Pompeo said on Sunday that a rift between Qatar and its Arab Gulf neighbours had gone on for too long.
“We are all more powerful when we are working together and disputes are limited. When we have a common challenge, disputes between countries with shared objectives are never helpful,” he said at a press conference in Qatar.

Pompeo also said that a united GCC is essential for the planned MESA alliance, and that the US has agreed with Qatar on a widening presence in the Udaid military base.

US Secretary of State Mike Pompeo speaks in Doha. (AFP)

Pompeo arrived in Doha on Sunday and signed several agreements with Qatari officials.

Pompeo said countering Iran’s terror operations and proxy militia is one of President Donald Trump’s top priorities in an interview with Saudi-owned Al Arabiya News Channel on Saturday.

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U.S. Honors Ceremony for the fallen, at  Udaid military base

“Countering Iran, the threat from the world’s largest state sponsor of terror – the Islamic Republic of Iran, is something President Trump has identified as one of his top priorities. We are determined to do that, we will do it with our partners in the Middle East. This is a mission for the world. It’s incredibly important and we are determined to do it,” Pompeo said during the UAE leg of his Middle East tour.

The secretary of state was previously in Manama, Cairo, Amman, Baghdad, and the Kurdish capital Erbil on a tour that is pushing Washington’s continuous support for the region in confronting Iran and extremist groups such as Daesh.

Image result for UAE support to anti-Daesh coalition, photos

Pompeo also commented on the murder of Saudi journalist Jamal Khashoggi, who was slain inside the Saudi consulate in Istanbul last year.

“President Trump made clear immediately in the aftermath of this murder that the relationship is broader and deeper and bigger than that,” Pompeo said. “We absolutely have expectations when things go wrong, when heinous acts have occurred, people need to be held accountable for this, but this relationship predated that and the relationship must go forward. We have to have a good relation with the kingdom of Saudi Arabia and this administration intends to do so”.

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The US Secretary of State will also be travelling to Warsaw in February to attend a joint US-Poland hosted Iran-focused world summit.

Arab News



Saudi rift with Qatar threatens unity against Iran, Pompeo says — Urges “full and complete” accountability on the murder of Jamal Khashoggi

January 13, 2019

U.S. Secretary of State Mike Pompeo said on Sunday that a rift between Qatar and its Gulf Arab neighbors had gone on for too long and was threatening regional unity needed to counter Iran.

Saudi Arabia, the United Arab Emirates, Bahrain and non-Gulf Cooperation Council (GCC) member Egypt cut diplomatic, transport and trade ties with Qatar in June 2017, accusing it of supporting terrorism and their regional foe Shi’ite Muslim Iran — something Doha denies.

The United States, an ally of the six-nation Sunni Muslim GCC, sees the rift as a threat to efforts to contain Iran and has pushed for a united Gulf front.

“When we have a common challenge, disputes between countries with shared objectives are never helpful,” Pompeo, who is on an eight-day tour of the Middle East, told a news conference in the Qatari capital Doha.

Andrew Caballero-Reynolds/Pool via Reuters | US Secretary of State Mike Pompeo and Qatari Foreign Minister Sheikh Mohammed bin Abdulrahman Al-Thani in Doha, Qatar; Jan. 13, 2019.

“They never permit you to have as robust a response to common adversaries or common challenges as you might,” he added.

Gas-rich Qatar says the boycott is aimed at undermining its sovereignty and has started charting a course away from its Gulf neighbors, including forging new trade partnerships, strengthening its ties with Turkey and quitting OPEC. Those moves have deepened expectations that the row will not be resolved quickly.

“We’re hoping that the unity of GCC will increase in the days and weeks and months ahead,” Pompeo said, adding that Gulf unity was essential for a planned Middle East Strategic Alliance (MESA) that would also include Jordan and Egypt.

Saudi Arabia and the UAE have repeatedly said the dispute is not a top priority and assured Washington it will not affect defense cooperation.

Pompeo later told reporters that he had brought up the rift with officials in Bahrain, Egypt and the UAE. “It’s … not at all clear that the rift is any closer to being resolved today than it was yesterday and I regret that,” he said.

Khashoggi murder

Pompeo has used the regional tour, which included stops in Abu Dhabi and Cairo, to shore up support for the U.S. troop withdrawal from Syria.

He will head next to the Saudi capital Riyadh, where he said the United States would ensure there is “full and complete” accountability on the murder of Jamal Khashoggi, the U.S.-based Washington Post journalist from Saudi Arabia.

Jamal Khashoggi was killed on Oct. 2 at the Saudi Consulate in Istanbul after he went to get marriage documents. (File/AFP)

“We will continue to talk about that and make sure we have all the facts so that they are held accountable certainly by the Saudis but by the U.S. as well where appropriate,” Pompeo told the news conference.

Khashoggi, a long-time royal insider who had become a critic of the kingdom’s Crown Prince Mohammed bin Salman, was killed inside the Saudi consulate in Istanbul on Oct. 2.

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Crown Prince Mohammed bin Salman

U.S. intelligence agencies believe the crown prince ordered an operation to kill Khashoggi, whose body was dismembered and removed from the building to a location still publicly unknown. Top Turkish officials have also tied his death to the highest levels of Saudi leadership.

Saudi officials have denied accusations that the prince ordered the murder, which has left the kingdom facing its worst political crisis in generations, strained ties with Western allies and focused attention on the prince’s domestic crackdown on dissent and the war in Yemen.

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Loujain al-Hathloul

The sister of Loujain al-Hathloul, one of several Saudi women’s rights activists detained in the kingdom since last summer and accused of treason, pressed Pompeo to raise the issue with officials in Riyadh.

In a New York Times op-ed, Alia al-Hathloul described how her sister was allegedly tortured and threatened while in detention. “Even today, I am torn about writing about Loujain, scared that speaking about her ordeal might harm her,” she wrote.

The Saudi authorities have denied such torture charges.


China to transfer $2bn to Pakistan

January 1, 2019

A Britain newspaper has claimed that China is going to transfer two billion US dollars to Pakistan, to stabilize its financial condition, ARY News reported on Tuesday.

According to a report published in Financial Times, Pakistan’s old friend, China does not want to see Pakistan going through economic turmoil, and has decided to support Pakistan with $2billion aid in the present scenario.

“The aid will be helpful in boosting Pakistan’s foreign reserves,” the report reads.

Pakistan is also holding talks with the International Monetary Fund (IMF) for another bailout package, the next round of talks to take place in the current month of January.

Prime Minister Imran Khan, on December 28, had said that the PTI led federal government is not in hurry for International Monetary Fund (IMF) bailout package.

PM Khan resolves to battle "four ills of our country" in 2019. ─ File photo by Irfan Ahson
File photo by Irfan Ahson

Talking to journalists in Islamabad, the PM said “Government will not take IMF’s dictation, neither in hurry for entering into another bailout program”.

It may be recalled that United Arab Emirates (UAE) had announced its intention to deposit US$3 billion in the State Bank of Pakistan to support Pakistan’s financial and monetary policy.

“The country’s support for Pakistan’s fiscal policy is based on the historical ties between the two people and the two friendly countries and the desire to further develop the bilateral cooperation in all fields,” reads the statement issued by Abu Dhabi Fund for Development

It is pertinent to note here that back in October, Saudi Arabia too agreed to give Pakistan $3 billion in foreign currency support for a year and a further loan worth up to $3 billion in deferred payments for oil imports to help stave off a current account crisis.


No economic crisis, says Imran

Pakistan better be careful it doesn’t become the next home of Chinese re-education camps….

Pakistan’s Economy: As IMF talks sputter, govt seeks another route

December 24, 2018
IMF Managing Director Christina Lagarde and Finance Minister Asad Umar shake hands ahead of a meeting in Indonesia. — File photo
IMF Managing Director Christina Lagarde and Finance Minister Asad Umar shake hands ahead of a meeting in Indonesia. — File photo

Take a look: Differences remain over tough conditions of IMF bailout

Conversations with senior officials from the finance ministry, with direct knowledge of the Fund talks, paint a dismal picture of where the talks currently stand. “There is no chance that the adjustments as proposed by the Fund can be made,” one of them says. “The demands in their current shape are too steep to be implemented.”

Fund asking for steep cuts in current expenditure

This has put the government in a quandary, since an IMF programme is essential to unlock access to resources from other multilateral lenders like the World Bank and the Asian Development Bank, as well as from global financial markets.

In the meantime, the government has procured some breathing space through bilateral support from Saudi Arabia, and now a commitment from the Abu Dhabi Fund for Development of another $3 billion deposit “in the coming days”. In addition, the same sources tell Dawntalks with China are near conclusion on another $2.2bn deposit with the State Bank, with the last meeting held on Dec 20, though these funds will be subject to certain conditions.

Also read: Why Pakistan will go to the IMF again, and again and again

But with the current account deficit running at more than $1bn per month, these inflows will buy little more than time. Officials at the finance ministry tell Dawn that these bilateral inflows can tide the country over for one year, at the very best. Eventually, an IMF programme becomes necessary no matter what, and the government is hoping that something can be done in the intervening period to bring about some flexibility in the Fund’s position.

Explore: Approaching the IMF

“It is possible that the IMF may come around, considering our position and will not let us collapse,” says one of the sources. “After some tough talk, I think they may come to a point to sign a basic agreement.”

The sticking points

But at the moment such a point seems like a distant prospect. One central issue in the talks is the size of the adjustment between revenues and expenditures that the Fund is asking the government to implement. Another issue is a continuing hike in interest rates, which will raise the cost of borrowing for both the government and business. The discount rate has already been raised by 4.75 per cent since January, a near doubling in one year since it has gone from 5.75pc to 10.5pc in the time period, with the latest jump of 1.5pc being the sharpest one yet.

In addition, there is a demand for complete free float of the exchange rate, as has been widely reported already, to allow the market to fully determine the value of the rupee. This demand is also an important sticking point. Government officials believe that Pakistan’s foreign exchange markets are too thinly traded to be left to the market, and are insisting that they retain some space to intervene, even if only to smooth out sharp swings induced by speculative activity. The Fund says that in the past such discretionary power to intervene in the currency markets has been used to manage the rate.

“Ours is a small market in the range of $200 million to $300m trading on a daily basis,” a senior official tells Dawn. Agreeing to the IMF demand would “allow few players to manipulate the tiny market easily,” he says. “This is again politically and economically impossible for Pakistan to agree to this demand.”

One of the officials chuckled when his attention was drawn to recent media reports which say that Pakistan has committed to bringing the exchange rate to Rs150 per dollar by June 2019. “No such thing has been committed,” he says, adding that discussions are only on the mechanism for determining the exchange rate, and not its actual value.

In a separate comment to Dawn, IMF’s Resident Representative in Islamabad Teresa Daban Sanchez also says the same thing. “The IMF’s advice on exchange rate issues is not for Pakistan to reach or target a particular rate,” she says in a message sent from Washington DC where she is currently visiting. The “advice” instead focuses on the policy through which the exchange rate will be determined, “in particular for Pakistan to transition towards a market-based exchange rate regime”.

She says the Fund officials are strongly prohibited from talking about ongoing talks with any country. But in more general terms, she says, “Fund policy advice is for fiscal consolidation, monetary tightening, flexible exchange rate regime, reduction of losses at the state-owned enterprises (including circular debt), and strengthening social safety net to protect most vulnerable from adjustment”.

Weight of failures past

The IMF cites its disappointments in previous dealings with Pakistan as justification for demanding upfront action this time round, finance officials tell Dawn. “They are telling us that commitments made in past programmes were not fulfilled,” one of the sources says, adding that as a result they now want the adjustments to come before the funds are disbursed.

In the last IMF programme, Pakistan obtained a record number of waivers for failing to comply with its commitments from privatisation to reduction in circular debt. These waivers or non-implementation of commitments did not sit well with the Fund, and blistering commentary in the local press pointing this out has also left some scars. Government officials are also convinced that another reason the Fund is taking a tough line with Pakistan is the changes in the Trump administration’s attitude towards Pakistan.

Size of the adjustment

In the proposed programme, the IMF is asking for an adjustment of around Rs1,600bn to Rs2,000bn over three to four years. What’s more, the Fund wants the burden of any expenditure cuts to fall on current expenditures that include debt service, defence and subsidies, according to a senior official who has been a part of the process. Previous governments cut development expenditures when undertaking an IMF-led adjustment and usually left current expenditures alone (other than subsidies).

A steep cut in current expenditures of the sort that the Fund is asking for can put the government in the awkward position of asking the generals to take a sharp pay cut. Additionally, the government will also be forced to seek at least a partial reversal of the provincial transfers under the 9th NFC award.

Officials from the government side say this demand — to cut current expenditures so sharply — is impossible to fulfil. “It is too difficult for Pakistan to agree to it,” one of them tells Dawn, adding that there is certain non-development spending which cannot be discontinued or reduced.

The emphasis on current expenditures in the talks comes as a result of a focus on what is known as a ‘primary balance’ in the parlance of public finance. The primary balance of a government’s budget is the difference between revenues and expenditures after removing interest payments. It tests whether the path of debt accumulation of any country is sustainable or not. If this balance is in deficit then it means that at least some of the interest payments due in the given year will have to be made through borrowing.

Last year, Pakistan ran a primary deficit of almost Rs760bn, meaning a substantial portion of interest payments that have to be made this year will have to be made with borrowed money. Cutting the primary deficit requires a cut in current expenditures, and usually becomes necessary when reducing the debt-to-GDP ratio is a priority.

When speaking on record, both the government and IMF staff lay emphasis on overall “fiscal consolidation”. Finance Minister Asad Umar did not respond to repeated requests for comment, but Dr Khaqan Najeeb, the ministry’s spokesperson, tells Dawn that the government will “continue on the path of fiscal consolidation to bring down both primary and fiscal deficits”.

Sanchez from the IMF also says that when the Fund assesses a fiscal consolidation, the staff will “usually look at primary balance, which is considered as the best indicator for these purposes, especially for debt sustainability. This is not new neither specific to Pakistan”. But in programmes past, the Fund has preferred to focus on the overall fiscal deficit rather than the primary deficit, and watched silently as development expenditures were slashed as part of a fiscal adjustment.

On the interest rates, the Fund is asking for the rate hikes of 2018 to continue well into the next year. “We have conveyed to the Fund that we have already increased the rate by more than 400 basis points”, but the Fund is asking for further increase, according to the official. Dr Najeeb says that ”the government conveyed to the IMF that Monetary Policy Committee is an independent committee and its meeting takes decisions considering the economic fundamentals at the time. It will continue to do so in future”. But the Fund is continuing to speak of “monetary tightening” as one of the elements of its “policy advice” for Pakistan.

There are other prior conditions too, which include further increases in gas and electricity tariffs and a huge increase in the revenue collection of the Federal Board of Revenue in the current fiscal year. “We really don’t have that much space to enhance revenue in the next six months as the IMF is asking,” the senior official says.

With these conditions, it is unlikely to get the IMF programme. But officials are optimistic to see some flexibility in the conditionalities in the next couple of months. “We have given them our plan about measures that we can easily do,” the source said, adding: “We are in contact with the Fund through video conferencing.”

Sanchez has already acknowledged receipt of the document containing the measures proposed by the government. “There is strong understanding between the authorities and Fund staff on the diagnostic of Pakistan’s macro challenges, the need for adjustment policies, and the goals to be achieved,” she tells Dawn from Washington DC. But agreement, it seems, is proving elusive.

“Discussions continue on the composition, sequencing, and prioritisation,” she says.

An alternative path

As talks with the Fund sputter on, the government has launched a massive effort to draw foreign exchange inflows through other means. Officials at the finance ministry tell Dawn that they hope recent measures may increase remittances by another $2-3bn and they are also looking for an increase in foreign investments. They say they hope an increase in remittances and FDI will reduce the pressure on the external side.

A steep drop in oil prices is another unexpected windfall. Given some of the new realities opening up, they expect the current account deficit to drop to around $13bn this year from last year’s $19bn. But this is only possible if there is continuing improvement in exports, remittances and FDI.

On the investment side, Saudi Crown Prince Mohammad Bin Salman is expected to announce a massive package of investments for setting up refineries near Gwadar in Balochistan. “They want to make an oil city near Gwadar,” the source said, adding that the establishment of one refinery involves an investment of $7bn to $8bn.

Pakistan is also making some efforts to make some arrangement with Qatar as Pakistan imports LNG from Qatar as well. “It is also under negotiations,” an official with direct knowledge of the talk says.

Published in Dawn, December 24th, 2018

SoftBank Finds Limits to Its Love for WeWork as Investors Push Back

December 19, 2018

Key investors in SoftBank Group Corp.’s 9984 -0.91% giant tech fund have balked at a planned $16 billion investment in co-working startup WeWork Cos., leaving SoftBank chief Masayoshi Son to find an alternative as his ambitions hit up against the limits of his financial firepower.

Government-backed funds in Saudi Arabia and Abu Dhabi, according to people familiar with the matter, have told SoftBank executives they have concerns about SoftBank’s negotiations to buy a majority of money-losing WeWork, whose industrial-chic workspaces and short-term leases have made it one of the world’s hottest startups.

SoftBank’s Vision Fund is already a major investor in WeWork after acquiring nearly a fifth of the company last year with an investment of $4.4 billion at a valuation of $20 billion. SoftBank subsequently committed another $4 billion, including a $3 billion commitment last month at a $45 billion valuation. The new investment would value WeWork at around $36 billion, the people said, and would bring SoftBank and its affiliates’ total investment in the company to more than $24 billion.

Saudi Arabia’s Public Investment Fund and Abu Dhabi’s Mubadala Investment Co. contributed the bulk of the nearly $100 billion raised by the SoftBank Vision Fund. Their size gives them an effective veto over certain investments and a loud voice in validating Mr. Son’s moves.

The pushback against the new WeWork deal is unusual for the freewheeling Mr. Son, who typically gets to invest as he pleases. The 61-year-old executive has transformed SoftBank from a stodgy Japanese cellphone provider to one of the most influential technology investors in the world, bending investors to a vision based more on instinct than traditional financial analysis.

Some of the people said that PIF and Mubadala have questioned the wisdom of doubling down on WeWork, and have cast doubt on its rich valuation. The company is on track to lose around $2 billion this year, and the funds have expressed concern that WeWork’s model could leave it exposed if the economy turns, some of the people said.

PIF and Mubadala are both heavily invested in real estate, and have told SoftBank executives they would prefer the fund stick to technology bets, some of the people said.

The deal under discussion would include $10 billion from SoftBank to buy out most existing outside shareholders, plus another $6 billion in new capital for WeWork over the next three years, according to people familiar with the matter. The deal would leave Chief Executive Adam Neumann with control of WeWork, one person said. The companies are hoping to announce the deal early next year, although talks are fluid and it could still fall apart.

Mr. Son still hopes the sovereign funds will let the Vision Fund pay for some of the deal, one of the people said. SoftBank is considering other ways to fund the deal, including using its own cash, raising debt and bringing in outside investors, the person said. It may use the proceeds from the IPO of its Japanese telecom business.

SoftBank already carries heavy debt: nearly ¥18 trillion as of Sept. 30, or roughly $158 billion.

Mr. Son, who also has backed companies including Uber Technologies Inc. and Indian e-commerce company Flipkart, has occasionally encountered skepticism from his investorsand board members, but generally they have gone along.

The pushback from Mubadala and Saudi Arabia’s PIF shows Mr. Son is testing his most enthusiastic backers. It also raises questions about the broader risk appetite of investors who have thrown money at fast-growing startups, no matter how unprofitable, in hopes of future profits.

Under the deal being discussed, SoftBank would buy out existing investors at a valuation of around $22 billion, subject to a shareholder vote. The additional money put into the company would come in $2 billion chunks in each of the next three years at a higher valuation, subject to WeWork hitting milestones, the people said.

The Wall Street Journal first reported the WeWork talks in October.

Beyond its massive size, the prospective deal would be unusual in that it would leave Mr. Neumann in control despite the fact that SoftBank would own most of the company and provide the new capital. Mr. Neumann currently controls WeWork’s board, and his shares give him 10 times as many votes as other investors’ shares, according to company filings. As of late last year, he controlled a limited liability company that owned 30% of WeWork.

WeWork has spent years marketing itself like a tech company, and Mr. Neumann has compared it to Inc., saying that office space is to WeWork what books were to Amazon: just the beginning.

Some analysts say it more closely resembles an old-school office-leasing company, and have warned that if demand for office space and rent prices fall, WeWork could be stuck with fixed-rent leases for 10 to 15 years.

If WeWork becomes a huge hit, it would bolster Mr. Son’s record of prescient bets, and be a boon to SoftBank’s shareholders. Mr. Son invested $5 million with Chinese entrepreneur Jack Ma for a fledgling e-commerce company, Alibaba, that went on to become a behemoth.

WeWork has spent heavily on new office space as it has grown. While executives years ago predicted strong profits by now, losses have recently grown faster than revenue. WeWork took in $1.2 billion in revenue in the first nine months of the year, but spent twice as much, posting a $1.2 billion net loss. WeWork has said the losses reflect heavy investment in growth, and individual offices are profitable once they’re leased.

The deal talks come at a turbulent time for SoftBank and Saudi Arabia, which committed $45 billion to the Vision Fund. The Kingdom’s connection to the murder of journalist Jamal Khashoggi and the war in Yemen have sparked a growing backlash against the country and its crown prince, Mohammed bin Salman.

A few venture capitalists and a Democratic congressman representing Silicon Valley, Ro Khanna, have called on companies to reject Vision Fund money.

Write to Liz Hoffman at, Eliot Brown at and Maureen Farrell at

Malaysia files charges against Goldman over 1MDB scandal

December 17, 2018

Malaysia on Monday filed criminal charges against Wall Street titan Goldman Sachs and two of its former employees over the scandal surrounding state fund 1MDB, authorities said.

Charges were filed against subsidiaries of Goldman Sachs and former employees Tim Leissner and Ng Chong Hwa, said a statement from Malaysia’s attorney-general Tommy Thomas.

Low Taek Jho, a Malaysian financier who allegedly masterminded the theft of billions of dollars from the sovereign wealth fund that was used to buy everything from yachts to artwork, was also hit with new charges over the scandal.

Low Taek Jho, a Malaysian financier who allegedly masterminded the theft of billions of dollars from the sovereign wealth fund that was used to buy everything from yachts to artwork, was also hit with new charges over the scandal

Low Taek Jho, a Malaysian financier who allegedly masterminded the theft of billions of dollars from the sovereign wealth fund that was used to buy everything from yachts to artwork, was also hit with new charges over the scandal Low Taek Jho, a Malaysian financier who allegedly masterminded the theft of billions of dollars from the sovereign wealth fund that was used to buy everything from yachts to artwork, was also hit with new charges over the scandal AFP/File

Allegations that huge sums were looted from the fund in an audacious fraud that involved former Malaysian leader Najib Razak and his cronies played a huge role in the last government’s defeat at elections in May.

Goldman underwrote bonds issued by 1MDB on three occasions totalling $6.5 billion, and earned $600 million in fees for the bond issue.

Monday’s charges related to the bond issues, which took place in 2012 and 2013. A total of $2.7 billion was dishonestly misappropriated from the bond issuances, Thomas said.

Leissner and Ng — who have already been charged in the US over the scandal — conspired with Jho and others to bribe Malaysian officials to ensure that Goldman was selected to work on the bonds, the statement said.

The fees paid to Goldman were “several times higher” than usual market rates, and false statements were presented to investors suggesting the proceeds of the issuances would be used for legitimate purposes, it said.

“Having held themselves out as the pre-eminent global adviser / arranger for bonds, the highest standards are expected of Goldman Sachs,” Thomas said.

“They have fallen far short of any standard.”



1MDB dragnet closes in on Najib, Goldman Sachs

December 15, 2018

Legal wheels are turning fast in Malaysia and US to jail the ex-premier and hold the American investment bank responsible for money laundering and fraud worth billions of dollars

Prosecutors in Malaysia filed yet another round of new graft charges against disgraced former prime minister Najib Razak this week after investigators questioned him and Arul Kanda Kandasamy, a former chief executive at 1Malaysia Development Berhad (1MDB), over allegations of tampering with a 2016 government audit of the graft-linked state fund.

By Nile Bowie

Malaysian officials say Najib ordered amendments to the audit report that removed a mention of fugitive Malaysian financier Low Taek Jho’s presence at a 1MDB board meeting, a figure both Malaysian and US authorities regard as a central player in the alleged theft of an estimated US$4.5 billion from 1MDB between 2009 and 2014.

Former Malaysian Prime Minister Najib Razak talks to media at Kuala Lumpur's High Court after a hearing in the 1MDB financial fraud case on October 25, 2018. Photo: AFP via Andalou Agency/Adli Ghazali

Former Malaysian Prime Minister Najib Razak talks to media at Kuala Lumpur’s High Court after a hearing in the 1MDB financial fraud case on October 25, 2018. Photo: AFP via Andalou Agency/Adli Ghazali

By amending the audit report before it was finalized, Najib had “secured protection from disciplinary, civil or criminal action related to 1MDB,” according to the charge-sheet read in court on December 12. He pled not guilty to an abuse of power charge, while Arul pled not guilty to abetting and engaging in a criminal conspiracy with the former premier.

Najib, 66, who was ousted in May after a coalition led by Prime Minister Mahathir Mohamad clinched a shock election victory, faces charges of graft, abuse of power and criminal breach of trust related to 1MDB. He has consistently denied wrongdoing and could spend the rest of his life behind bars if found guilty in a trial due to begin next year.

Low, or Jho Low, as he is popularly known, is said to have leveraged high-level business contacts in the United Arab Emirates and Saudi Arabia to persuade Najib to allow him to effectively run 1MDB’s operations, culminating in a multi-billion dollar heist that saw pilfered proceeds from Malaysia spill across the Middle East, Wall Street and Hollywood.

Malaysian businessman Jho Low with US actor Leonardo DiCaprio. Photo: Twitter

Malaysian fugitive financier Jho Low (R) with US actor Leonardo DiCaprio. Photo: Twitter

Malaysian police issued arrest warrants and filed fresh criminal charges against Low and four others on December 5. Also charged was Low’s aide, Eric Tan Kim Loong, 1MDB’s former general counsel Jasmine Loo Ai Swan, its ex-business development director Casey Tang Keng Chee, and former finance executive director Terence Geh Choh Heng.

All remain at large with their whereabouts unknown. Low has been on the run since 2016 and some have speculated that the 37-year-old fugitive financier has been able to find safe haven in China, with witnesses and reports recently sighting him in Macau and Hong Kong. He continues to elude capture despite an Interpol red notice in force for his arrest.

A spokesperson for Low issued a statement through his attorneys characterizing the latest charges as “no more than a continuation of the trial by media and political reprisals by the Mahathir regime.” It also stated that Low “will not submit to any jurisdiction where guilt has been predetermined by politics and there is no independent legal process.”

Investigations into scandal-plagued institutions like 1MDB were a key campaign promise of Mahathir’s coalition, which has vowed to recover the billions of dollars that were embezzled from the fund and funneled through the global financial system using a complex web of intermediaries and shell companies in the Middle East, Seychelles, Caribbean and the US.

Malaysia, however, isn’t the only jurisdiction to bring charges against Low. A three-count indictment against him and two former Goldman Sachs bankers was unsealed in the Eastern District of New York’s federal court on November 1 on charges of conspiring to violate the Foreign Corrupt Practices Act and launder some US$6 billion allegedly misappropriated from 1MDB.

Goldman Sachs-Tim Leissner-1MDB-Facebook

Ex-Goldman Sachs managing director for Southeast Asia Tim Leissner. Photo: Facebook

Tim Leissner, an ex-managing director at Goldman, and Ng Chong Hwa, a former employee of the same investment bank, were named along with Low as the first defendants to face criminal charges brought by the United States Department of Justice (DoJ) for their roles as architects, enablers and organizers of the multi-billion dollar scam.

Leissner, who the bank promoted to the position of Southeast Asia chairman in 2014, already pleaded guilty in August to a separate two-count criminal indictment for laundering money embezzled from 1MDB and other charges. He has agreed to forfeit US$43.7 million. Ng was arrested in Malaysia and is awaiting extradition to face trial in the US.

Prosecutors have described the two Goldman bankers as playing a crucial role in enabling Low’s plunder of the Malaysian fund, fueling bottomless spending on a mega-yacht and private jet, luxury property, fine art purchases, movie production investments and extravagant parties attended by supermodels and actors such as Leonardo DiCaprio.

The US investment bank has come under scrutiny from the DoJ for its role in helping raise funds through bond offerings for 1MDB, totaling US$6.5 billion for three bond issuances in 2012 and 2013. Goldman collected fees for its work topping US$600 million, or about 10% of the deal’s value, returns that US prosecutors have flagged as “above average.”

Those profits were far in excess of the normal 1% to 2% a bank could ordinarily expect for helping to sell bonds, an opportunity that the Malaysian fund had offered to Goldman exclusively. Outsized earnings and an unusual no-bid contract arrangement did raise red flags among some at the bank, leading to compliance team warnings.


Entryway to Goldman Sachs’ Manhattan headquarters. Photo: Facebook

The 1MDB bond sales were, however, vetted by internal committees made up of senior Goldman executives – including Stephen Scherr, now the bank’s chief financial officer – and ultimately approved. Evidence gathered by US prosecutors suggests that Leissner mislead those executives about how the proceeds of the 1MDB bond sales would be used.

Although Low held no formal position at 1MDB, nor was he ever employed by Goldman, Leissner admitted in his recent plea deal that the Malaysian financier was a key intermediary in negotiating the transaction with the investment bank. He also admitted lying to Goldman officials when he had earlier denied Low’s involvement.

Goldman has consistently denied any institutional wrongdoing and is said to be preparing for potential penalties related to its dealings with 1MDB. The investment bank has thus far escaped direct consequences of its alleged role in the scandal, though it admitted last month that it could face “significant fines” related to fraud at the Malaysian sovereign fund.

As US prosecutors continue their criminal investigation into the bank, Goldman has argued that misconduct was limited to a small number of “rogue employees.” Low’s presence at a private meeting between an Abu Dhabi fund executive and Goldman’s then chief executive Lloyd Blankfein in 2012, however, could suggest otherwise.

Investigators are working to determine whether the meeting points to Blankfein having a direct role in facilitating the bank’s relationship with Low, one that had raised compliance concerns among the bank’s own regulators, a determination that would undercut Goldman’s argument of complicity being solely limited to rogue employees like Leissner and Ng.

Comeback kid: Former Malaysian prime minister Mahathir Mohamad, 92, speaks during an interview with Reuters in Putrajaya, Malaysia, March 30, 2017. Photo: Reuters/Lai Seng Sin

Malaysian premier Mahathir Mohamad in a March 30, 2017, file photo. Photo: Reuters/Lai Seng Sin

Malaysia’s Finance Minister Lim Guan Eng, meanwhile, has said his country intends to seek a “full refund” of an estimated US$600 million in fees Goldman earned from helping 1MDB raise money, as well as resulting losses suffered. Preparations for legal action are now underway, though Malaysia has yet to specify the amount in damages it will claim.

Asia Times published an exclusive report last month claiming that Malaysia’s Attorney General Tommy Thomas would soon be filing a civil suit against Goldman in a US court that will seek US$4.5 billion in damages, citing official sources familiar with the ongoing preparations. Thomas soon refuted the report, calling it “premature and untrue,” according to local media.

However, Mahathir himself has set a goal of recouping US$4.5 billion, an amount representing the DoJ’s total estimate of misappropriated 1MDB funds. “Once we are convinced we can win, then we’ll take action,” the premier told reporters earlier this week in reference to legal action now being prepared against the US investment bank.

Sources told Asia Times that Thomas will justify the new case against Goldman as an institution by arguing that knowledge of the fraud reached the highest levels of the bank’s management. Those to be accused will include senior Goldman executives yet to be charged in a recently filed US Department of Justice (DoJ) criminal case, the same sources said.

Should Malaysia seek to recover the whole of the US$4.5 billion by targeting Goldman in US courts, the amount in damages sought would be substantially higher than existing expectations of potential fines and penalties – which range from US$600 million up to US$2.5 billion – that analysts believe the bank could face for its alleged role in 1MDB fund losses.

Traffic passes a 1Malaysia Development Berhad (1MDB) billboard at the Tun Razak Exchange development in Kuala Lumpur, Malaysia, July 6, 2015. Photo: Reuters/Olivia Harris

Traffic passes a 1MDB billboard at the Tun Razak Exchange development in Kuala Lumpur in a file photo. Photo: Reuters/Olivia Harris

Goldman’s problems have continued to mount since Abu Dhabi’s International Petroleum Investment Company (IPIC), a state energy investment company, sued the bank in a New York State Court on November 21 over 1MDB-linked accusations that its employees conspired with Low to bribe and mislead executives of IPIC and its subsidiary, Aabar Investments.

Malaysia is also attempting to contest a separate settlement with Abu Dhabi that saw it pay US$1.2 billion to IPIC under a London arbitration award and assume responsibility for future principal and interest payments on 1MDB bonds valued at US$3.5 billion which IPIC had guaranteed as a result of its senior executives accepting bribes.

Goldman finds itself in the middle as Malaysia now seeks to set aside that award, while IPIC says it will fight that action and take steps to reaffirm the validity of the settlement. Analysts believe the damages sought by Abu Dhabi and Malaysia could exceed US$5.4 billion, equivalent to Goldman’s average annual net profit over the past three years.

As the scope of the scandal widens, analysts say the investment bank may need to boost its legal reserves by as much as US$1 billion to prepare for potential penalties. While many of 1MDB’s main architects remain at large, an institution that has become synonymous with ethical lapses and a byword for Wall Street greed is unlikely to emerge unscathed.

Bahrain ‘rejects’ attacks targeting Saudi’s reputation

November 26, 2018

Bahrain has said it “completely rejects” attempts to tarnish the reputation of neighbouring Saudi Arabia, whose powerful crown prince has been under intense scrutiny since the murder of journalist Jamal Khashoggi.

Crown Prince Mohammed bin Salman was in Manama Sunday night for talks with Bahrain’s King Hamad as part of a regional tour, the state-run Bahrain News Agency (BNA) reported.

“The king reiterated Bahrain’s complete rejection of attempts targeting Saudi Arabia,” said a statement carried by BNA on Monday.

© Saudi Royal Palace/AFP | Saudi Crown Prince Mohammed bin Salman (R) meets Bahrain’s King Hamad bin Isa Al-Khalifa in Manama during a regional tour, in a handout picture from the Saudi royal palace on November 25, 2018

“Saudi Arabia is a nation of security, safety, justice and rights.”

Prince Mohammed visited Abu Dhabi Thursday as he began his first tour abroad since the murder of the Saudi journalist in October.

Saudi Arabia has been facing intense global criticism over the killing of insider-turned-critic Khashoggi in its Istanbul consulate.

The murder of the Washington Post columnist has tipped the kingdom into one of its worst crises.

He was killed and reportedly dismembered in what Saudi Arabia said was a “rogue” operation.

Prince Mohammed began his regional tour at the request of his father, King Salman, according to the Saudi Press Agency, which said he would visit “brotherly” Arab countries.

The Egyptian presidency said the prince is due to arrive in Cairo later Monday for talks with President Abdel Fattah al-Sisi.

He is also set to travel to the Tunisian capital on Tuesday, a presidential source in Tunis told AFP.

Prince Mohammed is expected to attend the G20 summit in Argentina next week.


Saudi Crown Prince Mohammed bin Salman in UAE — Will visit Arab countries

November 23, 2018

Sheikh Mohammed bin Zayed Al-Nahyan, the Crown Prince of Abu Dhabi, discussed on Thursday with Saudi Crown Prince Mohammed bin Salman, longstanding strategic ties between the two countries.

A series of issues were taken up, including current security threats in the Middle East and their impact on the stability of the region.

Saudi Arabia’s Crown Prince Mohammed bin Salman left the Kingdom on Thursday to visit a number of Arab countries — starting in the UAE. (SPA)

“The Kingdom of Saudi Arabia is assuming a pivotal role in efficiently confronting the challenges besetting the region and is spearheading the efforts aimed at ensuring security, stability and development for the region’s peoples, not to mention its good offices to achieve peace, and safety across different parts of the world,” Sheikh Mohammed bin Zayed told the Saudi crown prince.

Crown Prince Mohammed bin Salman, who is currently on a state visit to the UAE, and Sheikh Mohammed bin Zayed also re-affirmed that their strategic cooperation is based on a “robust foundation of mutual trust and understanding, and common interest,” UAE state agency WAM reported.

“The UAE-Saudi relations have witnessed a quantum leap that has been translated over the recent years into joint actions across all political, economic, cultural and defense fields,” he said, citing the establishment of the Saudi-Emirati Coordination Council in May 2016 as a stepping stone for significantly growing these ties.

The Abu Dhabi crown prince praised UAE-Saudi relations, calling them “an exceptional role model for brotherly ties,” based on “mutual respect and joint determination” to achieving sustainable development, social welfare and economic well-being.

At the end of their talks, the two sides emphasized the partnership between the two countries for joint Arab security and combat extremism and terrorism threatening the stability of the region.

Crown Prince Mohammed bin Salman left Saudi Arabia on Thursday to visit a number of Arab countries — starting in the UAE — the Saudi Press Agency reported.

King Salman asked the crown prince to conduct the tour “based on his keenness to deepen the Kingdom’s ties regionally and internationally,” the SPA report said.

According to reports, the prince will visit neighboring countries and is expected to visit Tunisia on Tuesday.

His tour comes as US President Donald Trump said Washington would remain a “steadfast partner” of Saudi Arabia, and that the Kingdom is an “important and strategic” ally.

Arab News

Rights group sues Abu Dhabi Crown Prince in France over Yemen

November 21, 2018

A rights group filed a lawsuit against Abu Dhabi Crown Prince Mohammed bin Zayed al-Nahyan during his visit to France on Wednesday, accusing him of war crimes, complicity in torture and inhumane treatment in Yemen, a lawyer for the group said.

Image result for Abu Dhabi Crown Prince Mohammed bin Zayed al-Nahyan, photos

Abu Dhabi Crown Prince Mohammed bin Zayed al-Nahyan

The complaint by the International Alliance for the Defence of Rights and Freedoms (AIDL) said Prince Mohammed, who is Deputy Supreme Commander of the UAE Armed Forces, is responsible for attacks that hit civilians.

“It’s in this capacity that he has ordered bombings on Yemeni territory,” said complaint filed on behalf of the AIDL, which is based in France.

There was no immediate response from the Crown Prince’s court or the UAE government media office to an emailed request for comment.

Diplomatic efforts to halt the war in Yemen have proved unsuccessful and attempts by rights group’s to hold the war’s protagonists to account have gained little international traction so far.

The complaint, filed in a Paris court, comes as pressure grows on French President Emmanuel Macron to curb arms sales to Saudi Arabia and the UAE, which head a coalition fighting the Iran-aligned Houthi rebels who control most of northern Yemen and the capital Sanaa.

France also has a military base in Abu Dhabi.

A number of Yemenis have joined the legal action, AIDL lawyer Joseph Breham said.

Prince Mohammed, a close ally of Saudi Crown Prince Mohammed bin Salman, is due to have lunch with Macron on Wednesday.

French prosecutors are already studying a similar complaint filed in April against the Saudi crown prince, starting a legal process likely to last years.

The complaint against Abu Dhabi’s crown prince cites a report by U.N. experts that said coalition attacks may have constituted war crimes and that torture was carried out in two centers controlled by Emirati forces.

The complaint makes reference to the bombing of a building in Sanaa in October, 2016, where a wake was taking place for the father of the Houthi administration’s interior minister.

The Yemen war has killed more than 10,000 people and forced from their homes more than 3 million – more than 10 percent of the population.

Documents from Human Rights Watch, Amnesty International and Oxfam on arbitrary detentions and the use of illegal cluster bombs are also referenced in the complaint.

The lawyers said French courts were competent to handle the case in line with the United Nations convention against torture.

Reporting by Emmanuel Jarry in Paris; additional reporting by Alexander Cornwell in Dubai; Writing by John Irish; Editing by Richard Lough and Matthew Mpoke Bigg