Global news agencies picked up on the exposé by Wall Street Journal which claimed that Red Granite Pictures, the company formed by Riza Aziz to produce “The Wolf of Wall Street”was funded with US$155 million originating from 1MDB.
The Wall Street Journal said that 1MDB had paid US$1.4 billion to Aabar Investment PJS Limited, a company established in the British Virgin Islands (BVI) in 2012.
The payment was meant as a collateral for the guarantee provided by Abu Dhabi’s International Petroleum Investment Corporation (IPIC) for 1MDB’s US$3.5 billion of bonds. However, IPIC’s subsidiary with a similar name, Aabar Investment PJS is set up in Abu Dhabi. IPIC’s financial statements published on the London Stock Exchange has disclosed neither Aabar (BVI) as a subsidiary or the receipt of the US$1.4 billion “collateral” cited by 1MDB.
Red Granite Capital then received US$105 million directly and another US$50 million indirectly via intermediaries from Aabar (BVI). Red Granite Capital then funded Red Granite Pictures.
1MDB was relatively quick to issue a very short denial. 1MDB said it “has never invested in nor transferred funds to Red Granite Pictures, whether directly or via intermediaries.”
However, 1MDB has failed to explain why it has made the above collateral payments to Aabar (BVI) which appears to be a completely unrelated entity to IPIC? Can 1MDB clarify who is the ultimate beneficiary or owner of Aabar (BVI)?
If 1MDB is unable to ascertain the ownership of Aabar (BVI), then why did it transfer such an enormous sum of US$1.4 billion to the company?
Hence it appears that on paper, the transfer of US$1.4 billion is a legitimately made for the purpose of providing a collateral. But upon closer scrutiny, it may amount to a fraudulent attempt to mask the embezzlement of funds via the mystery Aabar (BVI) vehicle.
If 1MDB fails to provide clarity on the nature and ownership of Aabar (BVI) with the necessary and appropriate documents, then any denials it makes about Aabar (BVI) not being an “intermediary” would have zero credibility.
In fact, the best thing for 1MDB to do now is to request IPIC to issue an official statement confirming its alleged relationship with Aabar (BVI). It would put to rest all of the global allegations against 1MDB today. Given 1MDB’s intimate relationship with IPIC and Abu Dhabi, why haven’t IPIC come to 1MDB’s rescue?