What specifically raised suspicions about the 1MDB-Petrosaudi deal timing?

Question

Accepted Answer

Suspicions Raised Over 1MDB-Petrosaudi Deal Timing and Asset Ownership

Concerns regarding the 1MDB-Petrosaudi joint venture primarily revolve around the swiftness of the multi-billion ringgit deal and the purported ownership of the assets injected into the partnership. DAP lawmaker Tony Pua specifically highlighted that 1MDB committed US$700 million in cash to the venture, which ultimately had a short operational lifespan. Further scrutiny was directed at the assets contributed by Petrosaudi, with claims suggesting they were not directly owned by the company but rather by a third party.
Questionable Timing of a Large Cash Infusion

The timing of the joint-venture agreement between 1MDB and Petrosaudi International became a focal point of suspicion due to the substantial financial commitment made by 1MDB within a compressed timeframe. Tony Pua pointed out that the deal, involving billions of ringgit, was executed rapidly, yet the joint venture itself did not endure for an extended period. This quick turnaround, coupled with 1MDB's significant cash injection of US$700 million, raised questions about the due diligence and the overall rationale behind the swift execution of such a large-scale transaction.
Alleged Lack of Direct Asset Ownership by Petrosaudi

A significant element contributing to the suspicions surrounding the deal was the assertion that Petrosaudi International did not possess direct ownership of the assets it contributed to the joint venture. Pua claimed that these assets, specifically an oil well located in Turkmenistan, were actually owned by Buried Hill, an energy company registered in Cyprus. This suggested that Petrosaudi's role might have been that of an intermediary rather than a direct owner of the underlying assets.
Farm-In Agreement as Basis for Asset Injection

The assets purportedly transferred into the 1MDB-Petrosaudi joint venture were reportedly based on a farm-in agreement. Official documents cited indicate that this agreement was established between Petrosaudi and Buried Hill on July 4, 2009. This detail further fuelled scepticism by implying that Petrosaudi was essentially acquiring rights to an asset from another entity, which it then contributed to the joint venture with 1MDB, rather than injecting an asset it already wholly owned.
Links to Jho Low and Allegations of Fund Siphoning

The joint venture also attracted significant attention due to its alleged connection with Malaysian business magnate Low Taek Jho, widely known as Jho Low. An exposé by The Sunday Times in collaboration with Sarawak Report linked Jho Low to the deal, accusing him of orchestrating the siphoning of US$700 million from 1MDB. The report suggested that Petrosaudi was used as a "front" in this 2009 joint-venture, thereby intensifying the scrutiny on the transaction's integrity and the flow of funds.

Reading history

Hide →

This history is cleared when the page is closed.

What specifically raised suspicions about the 1MDB-Petrosaudi deal timing?

Loading

Was this article helpful?

Helpful

Not helpful

Report an issue

2

0

0

Share with friends