A deeply indebted Malaysian investment fund may have sent as much as $850 million to a British Virgin Islands entity set up with a name closely resembling one owned by an Abu Dhabi sovereign wealth fund, the Wall Street Journal reported, citing documents and people familiar with the matter.
Last year, a unit of 1Malaysia Development Bhd., or 1MDB, transferred funds to an entity called “Aabar Investments PJS Ltd.,” which has a name closely resembling Aabar Investments PJS, a subsidiary of Abu Dhabi’s International Petroleum Investment Co. (IPIC), the WSJ said.
The funds were part of 1MDB’s purchase of power plants, but the Abu Dhabi company said it hadn’t received the payments, the report said, noting that both IPIC and its Aabar unit have concluded they didn’t own or control the British Virgin Islands company.
Launched in 2008, 1MDB, one of Prime Minister Razak Najib’s pet projects, has been under scrutiny for months amid allegations of financial fraud. The fund is currently undergoing a “rationalization” program, launched in May, to reduce its debt of more than $11 billion by selling assets. In November, 1MDB sold its power plants for 9.83 billion ringgit ($2.3 billion) to a Chinese nuclear power supplier. It’s reported to have paid around 12 billion ringgit for the assets.