Troubled Malaysian state fund 1MDB has sued Petrosaudi International Ltd.’s executive Patrick Mahony for US$1.83 billion over a 2009 joint venture with the oil exploration firm.
1MDB, in its statement of claim, said it was misled into believing that a Saudi king owned Petrosaudi, which led to it agreeing to the joint venture. Malaysiakini was the first to report on the case.
The joint venture “was a sham which resulted in 1MDB suffering a complete loss of its investment,” of US$1.83 billion, according to 1MDB. Mahony, who was the chief investment officer of Petrosaudi at the time, was liable for the sum on the ground of “dishonest assistance,” it said.
In a May 7 court filing to the Kuala Lumpur High Court, 1MDB alleged that PetroSaudi Chief Investment Officer Patrick Mahony aided several individuals, including former Malaysian Prime Minister Najib Razak and fugitive financier Jho Low, to misappropriate its funds.
1MDB also named UK-based law firm White & Case LLP as a defendant in the suit, claiming that it acted on Mahony’s instructions to prepare purchase and loan agreements on behalf of PetroSaudi to deceive 1MDB, Bernama reported.
Reuters was unable to reach Mahony for comment. White & Case did not immediately respond to a request for comment.
The state fund is seeking for Mahony and White & Case to repay the US$1.83 billion to it, among other damages.
Lim Chee Wee Partnership, the Malaysian law firm representing 1MDB, confirmed the filing to Reuters.
1MDB became the centre of a multibillion dollar scandal that spawned probes across several continents. Swiss prosecutors have accused Mahony as well as Saudi-Swiss businessman Tarek Obaid of pretending to negotiate on behalf of the late King Abdullah, while claiming the rights to a Caspian Sea oil field that they never controlled, to hoodwink 1MDB. Mahony has denied the charges and pleaded not guilty.
Malaysian and US investigators estimate US$4.5 billion was siphoned away from 1MDB following its inception in 2009, implicating Najib Razak, Goldman Sachs staff and high-level officials elsewhere.