by Tom Wright
Turning to Yeo Jiawei, the former BSI fund specialist, Low looked for a way out. How could they turn a few hundred million dollars—the remainder of the Deutsche Bank money not used for jewelry and other purchases—into $2.3 billion? This kind of alchemy was beyond even Low, but accounting tricks had worked for years to hide his thefts from 1MDB, so why not one last, monumental sleight of hand to fool Deloitte and the board? Yeo had an idea, and he looked to Amicorp, the Singapore-based financial company that administered funds in Curaçao, to put it into practice. To make it look like 1MDB was bringing the money home, Yeo devised a complex and circuitous flow of payments.
It was the craziest plan to date, so outlandish it appeared to have no chance of success. The idea was to transfer a portion of cash from the latest Deutsche Bank loan into the Cayman Islands fund. From there, 1MDB would then “redeem” this money, but immediately send it into a series of offshore vehicles set up by Amicorp, until the cash ended up back at the Cayman Islands fund. From here, 1MDB could again “redeem” the money. It was the same cash going in circles. The perpetrators sent a chunk of a few hundred million dollars through this cycle, and then repeated the process five more times, making it look as if 1MDB had redeemed $1.5 billion of its nonexistent Cayman Islands investment.
Satisfied by the money coming home, Deloitte in early November signed off on 1MDB’s accounts. The auditor had missed the circuitous movement of cash. The fund had made over a $200 million loss, which was unlikely to entice investors to take part in the IPO, but it appeared to have quieted its critics. In a statement, 1MDB announced it had redeemed over half of the money in the Cayman Islands. Low looked to have performed a miracle, and perhaps the IPO would proceed, but there was still a problem.
Deutsche Bank had noticed something wasn’t right, pushing Low further into a corner. Some bankers at Deutsche were suspicious about the Cayman Islands investment, the collateral for its loan. If the German bank asked for its money back, the investment fund would have been unable to come up with the cash.
The Malaysian needed some good publicity, and like many disreputable businessmen, he looked to philanthropy for a quick fix boost to his image. It was a sign of growing desperation.
Chapter 40
Generous Jho
New York, October 2014
As Alicia Keys and her husband, Swizz Beatz, introduced him, Low rose from his seat and made for the lectern at Cipriani Wall Street. Fervent applause rang out for the Malaysian, who was being honored at one of the highlights of New York’s social calendar, the Angel Ball. A yearly event—organized by Denise Rich, a socialite and songwriter whose daughter, Gabrielle, had died of cancer—it attracted Hollywood stars, musicians, and business titans, and raised millions to fight the disease. A few months earlier, Rich had telephoned Low to inform him he would be honored as that year’s “Angel Gabrielle” at a ball on October 19.
Dressed in black tie, Low took to the stage on the evening of the gala, and as the applause died out, he paused a moment to look out across the room. The banquet hall had once been home to the New York Stock Exchange, and its Greek pillars and high ceilings, centered around an imposing Wedgwood dome, exuded power and status. Low could see many people he knew well, and counted as friends.
There was Rich herself, whose former husband, Marc Rich, had fled to Switzerland after being indicted on federal charges of tax evasion, eventually being granted a pardon by President Bill Clinton. Nearby were Ambassador Otaiba and his wife, who also were being honored as “Angels of Inspiration” for their charity work. Sitting across from the pair was Jamie Foxx, who later that evening would perform, as would Alicia Keys and Ludacris. Lorraine Schwartz, too, was on hand, as were Paris Hilton and Richie Akiva, owner of 1Oak, a New York nightclub frequented by Low.
He began by telling the story of how, in February 2012, he’d undertaken his first-ever full-body medical checkup in Switzerland, only for a doctor to tell him he might have stage 2 lung cancer.
“I felt my world fall apart,” Low said, sounding a bit stiff, as if trying to make sure he got the story right. “This was one of the changing moments of my life and I didn’t know what to do.”
He related how he called Al Husseiny—gesturing to his friend in the audience—who had connected him with a doctor at the University of Texas’s MD Anderson Cancer Center, one of the world’s top hospitals for treating the disease. After six months of tests, the doctors told him it was only an infection. The reprieve from cancer changed his outlook on life, Low said, and later that year he set up the Jynwel Foundation to make charity a bigger part of his life. The following year, in October 2013, Low pledged $50 million to MD Anderson to fund an effort to better diagnose cancer by feeding patient data into IBM’s Watson supercomputer.
Here was Low, caught on camera, carrying on as he had for his entire life, the master storyteller mixing reality with half truths, all in the service of distracting anyone from looking deeper. What you claimed to be, you were, plain and simple. Perhaps Low had been worried about dying of cancer, but he used the speech to develop another fiction, one about his origins.
“I’d like to take this opportunity to tell New York a bit about my background,” he said.
Some in the audience groaned inwardly as the speech went on and on. But Low needed to make his moment count. He spun, once again, the old story of his grandfather, who had come to Malaysia in the 1960s and built a fortune—only now he told this story to an audience that included luminaries of New York business and entertainment. His grandfather, Low said, had started the Low tradition of philanthropy, giving to communities across Asia, including to “orphans.” He recently had died, also of cancer, which Low said had inspired him to donate to MD Anderson.
“Everything he stood for inspires me every day,” Low said.
The grandfather had died, Low undoubtedly loved him, but he was not as wealthy, or such a philanthropist, as his grandson made out. Neither was Low himself so charitable; the Jynwel Foundation had done little through 2012, while Low was busy raiding the 1MDB fund, even during his own cancer scare. It was true that the Jynwel Foundation had pledged more than $100 million to charities, although it had actually paid out only a fraction of that amount. Its activity began to pick up only in late 2013, just as negative media stories about Low were snowballing, and more so in 2014.
In order to change the narrative, Edelman counseled Low to publicize his charitable endeavors, including pledges of tens of millions of dollars to National Geographic’s Pristine Seas endeavor and to the United Nations to save its news service from closure. Low was even planning to donate to his alma mater. At his request, an architect drew up plans for a new building at Wharton to be called the Jynwel Institute for Sustainable Business. Low was planning to make a $150 million commitment to build and operate the institute over thirty years, a munificent gesture, redolent of a Rockefeller or a Carnegie.
Low looked to have a handle on the situation, with Deloitte signing off on 1MDB’s accounts, an IPO in the cards, and the rosy glow of a big philanthropic award. He arranged for Jynwel to make a snazzy corporate video. In the video, Thomas Kaplan, a U.S. businessman in whose New York financial firm Jynwel had invested $150 million, extolled Low for always standing by his promises. There were also cameos by Szen Low, Alicia Keys, and a top Mubadala executive.
“How do you quantify luxury and inspire synergies that create value for everyone whilst building trust and loyalty for a lifetime?” a narrator says breathlessly during the video, filmed in Abu Dhabi, New York, and the Caribbean. “For Jynwel, dynamic quality, exciting value creation, and loyal trust are the foundation. Nothing slips beneath.”
Low even was in talks for what would have been his biggest corporate deal yet, a billion-euro bid alongside Mubadala to buy Reebok, the Boston-based sports-apparel company, from Adidas. Called Project Turbocharged at Jynwel, Low’s firm, the acquisition would seal his name as a gold-plated investor. Swizz Beatz, who had a creative role at Reebok, was involved in the deal. T
he Malaysian traveled to Boston for negotiations, staying for weeks in a suite at the Four Seasons.
He also began talks with Tom Ford, the U.S. fashion designer who makes suits for James Bond, to take a 25 percent stake in his company. These were high-profile deals aimed at drowning out the increasingly loud noise about Low’s past.
But he would not have time to finalize the negotiations. Back home in Malaysia, Prime Minister Najib’s secret accounts were finally attracting some scrutiny, and Low was forced to hustle to stop a nosy Australian bank from getting in his way.
Chapter 41
Sacks of Money
Kuala Lumpur, Malaysia, December 2014
In early December, Joanna Yu, the AmBank employee who ran Prime Minister Najib’s secret accounts, was in a panic.
“Very stressful these days. ANZ running the bank,” she texted to Jho Low, referring to the Australian bank that held a stake in AmBank. “We need to close the accounts soonest please,” she said.
Low texted back “okay” but seemed distracted, and as the month wore on, and the accounts remained open, Yu got increasingly worried. In a series of messages, she explained to Low how the situation was perilous.
Cheah Tek Kuang, the chief executive who had given cover to the enterprise, had stepped down to take on an advisory role. The new chief, Ashok Ramamurthy, was an appointee from ANZ, and he’d found out about Najib’s secret business.
By now, the prime minister had a number of accounts at AmBank, and Ramamurthy was watching. Late in 2014, the new chief executive became fretful about a series of huge cash payments into Najib’s accounts. In the last few months, the prime minister had been running short on funds, as he paid off politicians. Desperate to stop the accounts from becoming overdrawn, which would attract attention from compliance, Low arranged for an associate to make last-minute cash deposits, taking sacks of cash into an AmBank branch.
It was a huge miscalculation and alarmed Yu, who pleaded with Low to stop. Heedless of the advice, he kept sending the associate with sacks of cash—literally bundles of notes in bags—to AmBank branches. The deposits totaled only $1.4 million, but handing money over the counter like this had set off anti-money-laundering alerts at AmBank, and Ramamurthy was forced to act. The chief executive alerted the AmBank board and Bank Negara Malaysia, the central bank. Low was furious.
“This is confidential,” he replied, ordering Yu to tell Cheah Tek Kuang to stop Ramamurthy from further disclosures.
It was too late, she replied, ANZ board members knew about the account now, and Cheah, who saw the writing on the wall, was retiring from the bank at the end of December.
At ANZ headquarters in Melbourne, Australia, overlooking the city’s former docks, executives were disturbed by what they were finding out. It was a potential public relations disaster for ANZ, which was the largest single shareholder in the bank. Ramamurthy had been with the Australian bank for more than two decades, and Shayne Elliott, ANZ’s finance director and one of Australia’s most senior bankers, even sat on AmBank’s board.
The bank had wanted to tap into Malaysia’s growth—like many foreign retail banks that expanded in emerging markets during this period. But ANZ clearly had no idea about what had transpired at a bank it was supposed to control. It wasn’t just a question of Najib’s accounts: AmBank also had been lending to 1MDB, and the news stories about the fund were making ANZ executives nervous. To limit the potential damage, the board ordered AmBank to immediately drop out of any work on the IPO, which it was co-arranging with Deutsche and Maybank.
The revelations were also a dilemma for Bank Negara Malaysia. The central bank oversaw the country’s financial system, and it had failed to uncover one of the world’s biggest financial swindles. Cheah had informed Zeti Akhtar Aziz, the sixty-seven-year-old governor of Bank Negara, about the prime minister’s account in 2011. He told her Najib was expecting inflows of hundreds of millions of dollars in political donations from Saudi Arabia—a story concocted by Low to explain the torrent of cash.
That was the last Zeti heard of the matter. It was a delicate situation, as it involved the prime minister, but Zeti now ordered an internal review of his accounts. For more than a decade, she had been at the helm of Bank Negara Malaysia and was regarded as one of Asia’s most skillful central bankers. This issue threatened her reputation, and she wanted to get to the bottom of it.
As the stress mounted, Yu was looking to change banks herself, scared about this scrutiny from ANZ and the central bank. Protected in his bubble, served by sycophants, Low foremost among them, Najib was among the few who didn’t know the noose was tightening, and he ordered that his accounts remain open. The prime minister needed to keep his wife happy.
Just before Christmas, Najib, accompanied by Rosmah, and their usual retinue of hangers-on and security, flew into Honolulu, the state capital of Hawaii, aboard a Malaysian government jet. Days later, the pair breezed into a Chanel store in Honolulu’s upscale Ala Moana Center. The first lady perused the jewelry and bags on display. Low had provided Rosmah with a $27.3 million jewel from Lorraine Schwartz. But for more mundane purchases, those costing only a few hundred thousand dollars, she relied on Najib’s credit cards.
In the Chanel store, her items selected, Rosmah turned to Najib to pay. The prime minister whipped out his platinum credit card, with a $1 million limit, and handed it to the cashier. A moment later, a nervous Chanel employee informed Najib that the transaction was not going through. Annoyed, he tapped out a message to Low on his cell phone. The credit card drew from his AmBank accounts, which were funded by 1MDB money.
“My platinum cards are not going through Jho. Can u call AmBank Visa and Mastercard right away?” he wrote.
Low messaged Joanna Yu, who reassured him the prime minister’s limit was still $1 million. After an awkward wait in the Chanel store, eventually the credit card machine burst into action, charging the Malaysian people another $130,625 for Rosmah’s frivolity. It was just a drop in the ocean of her spending. Months earlier, on the Italian island of Sardinia, Najib had used his card to acquire 750,000 euros in jewelry for his wife.
Since 2008, Rosmah had spent at least $6 million using credit cards—her husband’s, but also others in her own name—in a nonstop round of shopping stretching from Rodeo Drive in Beverly Hills, to Harrods in Knightsbridge, to Saks on Fifth Avenue. In private, she thought nothing of using government jets for her shopping trips. But after the Bersih antigraft protests in 2012 had targeted Rosmah’s spending, she went on a public relations campaign to improve her image. Her wealth, she said, was due to a lifelong habit of saving.
“I have bought some jewelry and dresses with my own money. What is wrong with that?” she wrote in an autobiography.
But Malaysians weren’t so easily fooled.
“She said she saved that money since she was small. That is impossible,” said Anis Syafiqah Mohd Yusof, a twenty-four-year-old student from the University of Malaya, who organized a small protest against corruption, one of the many around this period.
In online blog posts, average Malaysians derided the first family for their extravagant lifestyle. One site collected pictures of Rosmah with multiple Birkin bags. Those who protested did so at great personal risk—even of jail time—but the egregious corruption of this regime was becoming too much for many people to bear silently.
As Rosmah shopped, Najib had other business to transact in Hawaii. Two days later, on Christmas Eve, the prime minister met President Obama for a round of golf. Unaware of the trouble facing Low, Najib saw the chance to play the president as a triumph, another sign of his growing power and stature on a world stage. It was a rare honor: Obama golfed with British Prime Minister David Cameron and Vice President Joe Biden, but few foreign leaders had been given the chance.
To underscore his support of Najib, Obama had agreed to a round at the Kaneohe Klipper golf course, just a short drive from where the president was vacationing with his family. Despite the protests against Najib, Obama conti
nued to view him as among the United States’s best allies in Asia. But the round ended on an anticlimax.
On the eighteenth green, Obama made his first putt. As he struck, it was clear the ball was moving to the left of the hole. The president moved to tap the ball in, but picked it up before it missed again. Prime Minister Najib then stepped up, but he also missed a second putt. Obama consoled him with a pat on the shoulder, and the two leaders moved toward the clubhouse.
By December, Deutsche Bank was perturbed. The bank had dreamed of replicating Goldman’s profits, but instead it was now dawning on executives that 1MDB had something to hide. Deutsche had lent hundreds of millions of dollars to the fund, which was obligated, as part of the loan agreements, to hand over financial information to the bank. But Terence Geh, the fund’s finance executive, was refusing to cooperate. The bank particularly wanted details on the Cayman Islands investment, which was collateral for the loans.
The money was supposedly held by Brazen Sky, the 1MDB affiliate, at an account at BSI in Singapore, but Geh declined to hand any data over, citing government secrecy. If Deutsche found out there was no money there, it would recall its loans, plunging 1MDB into further financial distress and scuttling the IPO, which Deutsche was helping arrange. The 1MDB board also was anxious. In December, the fund’s offices had received a visit from police after an UMNO politician close to Mahathir had made a complaint about possible fraud at the fund. They had gone away without taking documents but the raid spooked one board member, who worried aloud whether they could all be prosecuted for criminal breach of trust.