KUALA LUMPUR - Prime Minister Najib Razak has refuted claims that a Penang-born tycoon is involved in the decision-making of 1Malaysia Development (1MDB), a state-owned investment company now awash in red ink.
"Low Taek Jho has never worked in 1MDB and all decisions and transactions are made by the company's management and board of directors," Datuk Seri Najib said in a written reply to Wangsa Maju MP Tan Kee Kwong on Monday.
Dr Tan had asked in Parliament last Thursday if there was any connection between Mr Low and 1MDB, according to the Astro Awani TV station in an online report.
Mr Low has been making headlines of late for alleged fraud linked to the troubled power plant and property fund.
He has denied any wrongdoing over 1MDB's investment in a US$2.5 billion (S$3.5 billion) oil venture with Saudi energy firm PetroSaudi, which failed to take off.
The Cabinet ordered the Auditor-General to review 1MDB's books after a series of exposes related to the 2009 joint venture.
1MDB has debts of more than US$11 billion, a burden weighing on Malaysia's sovereign rating and one which has also contributed to ringgit weakness in recent months.
Mr Najib, who chairs 1MDB's advisory board, also said a letter of support the government had written for a 10-year US$3 billion bond issued in 2013 by 1MDB Global Investments - a fully owned unit of the fund - stood.
But he added it would become effective only if there was a lack of funds for payment and after considering 1MDB Global's internal funds and assets, Reuters reported.
The bond yields over 7 per cent compared to 3.9 per cent for equivalent Malaysian government bonds.
While the Prime Minister's statement provides some reassurance, investors remain concerned about the health of the rest of 1MDB's balance sheet. The letter of support differs from an explicit guarantee because it is not legally enforceable, although global rating agencies such as Standard & Poor's treat it at par with a guarantee as it meets their criteria.
Malaysian authorities have previously said the country has provided an explicit guarantee for only 5.8 billion ringgit (S$2.2 billion) of the fund's loans.
"Just as a rose by any other name smells just as sweet, a government loan guarantee by any innocuous names like a 'letter of support' remains tantamount to a guarantee," opposition politician Tony Pua, one of 1MDB's most vocal critics, was quoted as saying by the Free Malaysia Today website.
Targeted because of my friendship with PM's stepson
Malaysian businessman Low Taek Jho calls Hong Kong home these days. His investment consultancy Jynwell Capital is based there and he lives in the Mid-Levels enclave of the well-heeled.
But of late, Malaysia is very much on his mind as speculation swirls over how big a role he played in the troubles besetting 1Malaysia Development (1MDB), the state-owned investment agency.
In response to the many questions that have arisen in the media and Parliament, Mr Low, better known as Jho Low, has given two interviews in the past week dealing with the accusations as well as his friendship with the Malaysian Prime Minister's stepson.
In his interview with the South China Morning Post, he rejected all allegations of money laundering and fraud, saying: "I feel I'm a victim of the crossfire of Malaysian politics."
And in his CNBC interview, he described as "spurious, irresponsible innuendoes and truly unsubstantiated" the allegations that he had cheated 1MDB of millions based on inferences drawn from an e-mail trail furnished by the whistle-blower website, Sarawak Report.
The website alleged that Mr Low had benefited from irregularities in a complex financial deal in 2009 between 1MDB and the Saudi Arabian energy company PetroSaudi.
Mr Low, 34, told CNBC he was targeted because of his friendship with Mr Riza Aziz, the stepson of Prime Minister Najib Razak.
In the SCMP interview, he said he has known Mr Riza for 16 years, since their schooldays in Britain. "Through Riza, I met his parents," he said.
Mr Low's spokesman denied allegations that he has acted as a business front man for Datuk Seri Najib or his wife, and insisted that his dealings with Mr Riza were limited to real estate transactions conducted "at arm's length fair market value".
The spokesman also confirmed reports that Mr Low's family had bought real estate in New York and Los Angeles for some US$42 million (S$58 million), and later sold it to Mr Riza for a profit, said SCMP.
Mr Riza is chairman of Red Granite Pictures, a US film company that produced The Wolf Of Wall Street, starring Leonardo DiCaprio. Mr Low said it was he who introduced the actor to Red Granite Pictures.
Mr Low's champagne- fuelled parties with celebrities were once fodder for the New York tabloids. He said he has sobered up since.
"I feel like I'm an easy target and victim perhaps because of my age and unfortunately, from the things done in my early years, the partying where I was having a bit too much fun," he said, adding that he had been "lectured" by his father and grandfather.
His grandfather made his fortune in liquor and mining while his father made money from real estate. Mr Low insisted that neither he nor his family had ever been party to unethical transactions involving the Malaysian government.
Mr Low also said he made his own money early on in his investing career. In 2009, he made US$116 million by selling off real estate investments in the Iskandar project in Johor, his spokesman told SCMP.
In 2010, Mr Low moved to Hong Kong.
Critics say he is the mastermind behind 1MDB, although he has no official position in the company, which has RM42 billion (S$15.8 billion) of debt.
Mr Low has denied the accusation and said he is happy to co-operate in any investigation. "I'm not hired by 1MDB and I don't get paid any fees by 1MDB," he told SCMP. "If someone in 1MDB asked me for my views informally, I will give my views, like any other Malaysian."
"So why politicise and try to blame it all on me when I have no decision-making authority?" he added.
This article was first published on March 18, 2015.
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