1MDB and its three subsidiaries have filed a suit against Riza Aziz, the stepson of former prime minister Najib Razak, for the alleged misappropriation of US$250 million in funds to finance movie productions and purchase real estate.
1MDB and its three subsidiaries – 1MDB Energy Holdings Limited, 1MDB Energy Limited and 1MDB Energy (Langat) Limited – as the plaintiffs, filed the writ of summons on May 7 through Messrs Shearn Delamore & Co, naming Riza and two of his companies, Red Granite Pictures Incorporated and Red Granite Capital Ltd, as the first and third defendants.
The companies also named New York-based law firm Shearman and Sterling as the fourth defendant.
In their writ of summons, they said that in 2011 and 2012, Riza and his two companies had received approximately US$250 million in funds from them which was allegedly misappropriated for their personal benefit and for the benefit of their associates, including for financing movie productions and purchasing real estate.
The companies claimed that Riza, who controlled the two Red Granite companies, should have known that the money which originated from 1MDB was misappropriated to them for their benefit.
“The law firm Shearman and Sterling (fourth defendant) permitted Riza and Low Taek Jho or Jho Low, an associate of the first defendant (Riza) who was directly involved in the misappropriations, to use the law firm’s interest on lawyer accounts to launder a substantial portion of the misappropriated funds received by the first to third defendants, as well as misappropriated funds received by Jho Low from the plaintiffs into the US and represented Riza and Jho Low in connection with various purchases and transactions involving the misappropriated funds.
“The fourth defendant had knowledge, being either actual knowledge or knowledge which is to be inferred from wilful blindness or reckless indifference and had failed to make the necessary enquiries, that the funds in question were the proceeds of crime,” the writ said.
The plaintiffs are seeking a declaration that Riza is liable to account for the misappropriated funds and unjust use of the funds, and are seeking the repayment of the misappropriated funds.
The case was called up for case management today before senior assistant registrar Noordura Mohamed Din, who fixed Aug 17 for further case management via e-review.
On May 10, the finance ministry confirmed that 1MDB and its subsidiary SRC International Sdn Bhd had filed a total of 22 civil suits to recover assets worth over RM96.6 billion, including about RM300 million against various local parties. The ministry said the writs filed on May 7 comprised six by 1MDB and 16 by SRC International.
The writs filed by 1MDB are against nine entities, including two foreign financial institutions and 25 individuals, while those filed by SRC International are against eight entities and 15 individuals for various wrongdoings.