Two 1MDB linked executives behind bars in UAE

KUALA LUMPUR: Two foreign executives linked to the 1 Malaysia Development Berhad (1MDB) scandal have been sentenced to prison in Abu Dhabi, United Arab Emirates (UAE).

The Wall Street Journal (WSJ) citing people familiar with the matter reported that Khadem al Qubaisi, who once headed Abu Dhabi’s International Petroleum Investment Co. (IPIC), was handed a 15-year prison sentence whereas Mohammed Badawy al Husseiny, a US citizen who ran a subsidiary of IPIC, was sentenced to 10 years.

The duo must also jointly must pay about $336 million the WSJ cited a an emirate’s court statement on the matter.

The court statement did not identify the men by name, but people familiar with court proceedings told the WSJ that the unidentified defendants were Al Qubaisi and Al Husseiny.

the financial daily also cited people familiar with the matters as saying the convictions were not related to the 1MDB scandal.

Lawyers for both men and a representative of the Abu Dhabi Criminal Court declined to comment on the charges the WSJ reported.

The court statement only mentioned that Al Qubaisi, referred to as the “first defendant” was convicted of “exploiting his job and unlawfully appropriating 149 million euros after selling shares he owns for the company he heads, without disclosing his ownership of the shares, for 210 million euros.”

The “second defendant”, Al Husseiny, was convicted of “exploiting his position and facilitating the seizure of the company’s money by” Al Qubaisi.

Previously, Al Qubaisi had claimed that he was unfairly being made a scapegoat in the scandal and that Abu Dhabi was forcing him to turn over his personal assets.

Al Qubaisi said he had steered IPIC to become a key business partner of 1MDB with the full knowledge of senior UAE officials.

He alleged, however, that he is now being made a scapegoat by Abu Dhabi after the deal soured and billions of dollars vanished from the sovereign fund.

Al Qubaisi, who was being held at the Al Wathba prison at that time, had reportedly said his plan was to “die here in this place (prison) or get out.”

According to the US Department of Justice’s (DOJ) civil suits, Al Qubaisi used US$471 million of allegedly stolen funds in a Luxembourg account to buy real estate in the United States, among others. These assets are being targeted by the DOJ.

1MDB set up by former Prime Minister Datuk Seri Najib Razak to attract foreign investment, accumulated billions of dollars of debt after its 2009 inception. It is at the centre of multiple investigations in relation to alleged corruption and money laundering.

IPIC and Aabar Investments last year alleged in a court filing that Goldman Sachs Group Inc. paid bribes to former fund officials, who in exchange “agreed to manipulate and mislead IPIC and Aabar, and to misuse the companies’ names, networks, and infrastructures to further the criminal schemes and to personally benefit.”