In 1MDB’s RM1b civil suit against Riza Aziz, court told funds siphoned out were used for gambling and producing movies

KUALA LUMPUR, Oct 17 — Counsels acting for 1Malaysia Development Berhad (1MDB) in its civil suit against Riza Shahriz Abdul Aziz, the stepson of Datuk Seri Najib Razak, said a total of US$248 million (RM1.07 billion) funds siphoned out were used to pay for gambling expenses among others.

The suit is in relation to a civil forfeiture claim against Riza Aziz and his two companies — Red Granite Pictures Incorporated (RGP) and Red Granite Capital (RGC) Limited — that is being heard before the High Court.

In the plaintiff’s opening statement, 1MDB said billions of Malaysian ringgit were siphoned out of 1MDB’s funds through various artifices, devious devices and plain old deceit that deceived and misled various innocent third parties which came to be known worldwide as the 1MDB Scandal.

“The Malaysian public and indeed the world came to know in the middle of 2016 of one of the largest cases of kleptocracy ever after the filing of civil forfeiture claims by the United States Department of Justice against various individuals and entities.

“The 1MDB Scandal involved several individuals including the individual known as Low Taek Jho, known popularly as Jho Low, who was associated with Najib and Riza Aziz who is the first defendant in this action.

“As regards the plaintiffs’ claims herein, the plaintiffs contend that the defendants knowingly received funds in circumstances that the funds had been misappropriated from 1MDB and dishonestly assisted in the breaches of fiduciary duty or breaches of trust by Jho Low,” the statement prepared by 1MDB’s solicitor Messrs Shearn Delamore reads.

Among others, 1MDB contended the sum of USD$248 million it was claiming were ultimately used for the personal benefit of Riza Aziz and his associates to fund RGP’s motion pictures, purchase real estates and movie memorabilia; and pay for gambling expenses.

Co-founded by Riza Aziz, RGP’s productions include the 2013-released The Wolf of Wall Street directed by renowned American filmmaker Martin Scorsese.

As for Jho Low, 1MDB said the former was a good friend of Riza Aziz and became acquainted with Najib in 2009.

1MDB said Riza Aziz took a conscious decision not to make inquiries, despite having sufficient basis to be suspicious about the transfers of misappropriated funds he received from Jho Low through his companies.

“Alternatively, Riza Aziz willfully shut his eyes to the obvious.

“Alternatively, Riza Aziz recklessly and consciously and willfully failed and refrained from making such inquiries as an honest and reasonable person would have made,” it said.

A total of three witnesses will be called by 1MDB on its behalf, namely its former chief executive Datuk Shahrol Azral Ibrahim Halmi, former general counsel Jasmine Loo Ai Suan and financial fraud investigator Richard Templeman.

By the trial’s conclusion, 1MDB said evidence will establish Riza Aziz knowingly received US$248 million for their personal benefit, dishonestly assisted in the misappropriation of 1MDB’s assets and is therefore liable to pay the sum of US$ 248 million in restitution because of their unjust enrichment at the plaintiffs’ expense.

High Court Judicial Commissioner Datuk Raja Ahmad Mohzanuddin Shah Raja Mohzan is presiding over the ongoing suit which formally commenced on October 15.

On May 7, 2021, 1MDB and its three subsidiaries sued Riza Aziz and his two companies for allegedly receiving around US$248 million in funds that they misused for their personal gain, including financing a film and purchasing various properties.

The plaintiffs are seeking a declaration that Riza Shahriz is responsible for the misappropriated funds and demand repayment.

In their ongoing claim, 1MDB said a sum of US$10 million was routed to Riza Aziz’s RGP from Jho Low-owned Good Star Ltd through various intermediate steps; whereas a sum of US$238 million was transferred in three separate transactions to an account belonging to Riza Aziz’s RGC.