1MDB claims Jho Low was 1MDB's shadow director

1MDB and its four subsidiaries namely 1MDB Energy Holdings Limited, 1MDB Energy Limited, 1MDB Energy (Langat) Limited and Global Diversified Investment Company Limited as plaintiffs, stated so in response to Jho Low’s defence statement filed by Messrs. Skrine at High Court here on Feb 23.

1MDB claims Jho Low owed the plaintiffs fiduciary duties and was at all material times a trustee of the plaintiffs’ assets.

“The defence claimed by the first defendant (Jho Low) that he never admitted the liability in the proceedings filed by the US Department of Justice, is entirely irrelevant,” 1MDB said in their statement of defence in reply to Jho Low’s statement of defence last month.

1MDB claimed, Jho Low had procured his proxies to work at 1MDB, including former 1MDB finance director, Terrence Geh Choh Heng; former 1MDB lawyer, Jasmine Loo Ai Swan; former 1MDB executive director Casey Tang Keng Chee; and former SRC International Sdn Bhd chief executive officer, Nik Faisal Ariff Kamil.

“The proxies occupy key senior management positions in 1MDB, among others, to monitor the management and board, implement major decisions in accordance with Jho Low and Najib’s wishes to facilitate the utilisation of 1MDB's funds in accordance with Low and Najib's fraudulent intentions," it claimed, adding Najib was also shadow director of 1MDB.

According to 1MDB, Jho Low had received funds belonging to 1MDB and its subsidiaries when he knew or ought to have known that the said funds belonged to the companies and were diverted to him in breach of trust and fiduciary duties.

“The lawsuit against Jho Low, among others for recovery of trust monies belonging to all plaintiffs which have been received by Jho Low which he knows that the money has been transferred to him in breach of trust, among others by Najib.

“Hence, the first defendant (Jho Low) is also the constructive trustee of the plaintiffs in respect of the money received by him," claimed 1MDB.

In addition, 1MDB also claimed that after being informed of the Ernst Young Memorandum dated March 26, 2010, Najib, then as the sole shareholder of 1MDB, the Minister of Finance (Incorporated) together with the involvement of Jho Low, ordered the removal of Ernst Young as an auditor for 1MDB via letter dated Aug 16, 2020.

1MDB claimed that the move was to hide the company’s losses due to fraudulent misappropriation of funds and to prevent the investigation, as well as the discovery of facts and material evidence regarding the fund.

“Apart from the US$700 million received by Jho Low in 2009, all monies that were paid to Jho Low after March 2010, therefore, it is inconceivable that the causes of action only accrued in March 2010, as alleged.

“In whatsoever situation, the plaintiffs’ claims, include fraudulent breach of trust by Jho Low and to recover from him, property held in breach of trust on behalf of the plaintiffs, which has been exchanged for his use,” according to 1MDB.

On May 7 last year, 1MDB and its four subsidiaries filed a suit against Jho Low, his parents Tan Sri Larry Low Hock Peng and Puan Sri Goh Gaik Ewe, his elder sister May Lin, his younger brother Taek Szen and his associate Eric Tan Kim Loong.

Based on the writ, 1MDB claimed US$ 661 million from Jho Low and US$ 41 million, US$ 397 million, US$ 608 million, and US$ 1.9 billion from Jho Low and Tan, and US$ 325 million from Jho Low and his father, respectively.

1MDB Global Investments Limited also claimed US$630 million from Hock Peng, Jho Low and Tan, as well as US$2 million from Taek Szen, Jho Low dan Tan.

The plaintiffs also claimed US$3.5 million from May Lin and Jho Low, US$1.695 million Goh, Jho Low and Tan in connection with the purchase of jewellery and secret profits, besides, US$25.5 million from Jho Low, Tan, Hock Peng dan Taek Szen.

In his statement of defence, Jho Low stated that he did not hold any official positions or fiduciary responsibilities in 1MDB or its four subsidiaries.

He said the lawsuit should be dismissed as it failed to disclose a reasonable cause of action over the allegation of breach of trust or fiduciary duty.

Jho Low further claimed that he was never a director or shareholder in 1MDB, its four subsidiaries, and even a member of its board of advisors or part of the management team of any of the five plaintiffs.