NZ court allows Jho Low's family to change trustees

AUCKLAND - The High Court of New Zealand has granted permission for the Low family to change trustees, according to the court ruling on Friday.

The judgment was contained in a 14-page ruling by Justice Kit Toogood.

"I am satisfied that the replacement of the current trustees with trustees who are willing to ensure that proper legal steps are taken in the California proceedings is not only expedient but necessary to safeguard the trust assets" and "protect the interests of the beneficiaries," he said in his ruling, according to Bloomberg.

He added the New Zealand case "does not concern the merits of the allegations made by the US Government."

To recap, relatives of the controversial Low Taek Jho, who is also known as Jho Low, allegedly linked to the 1Malaysia Bhd (1MDB) scandal, have requested to oppose the seizure of assets worth US$230mil alleged by the United States Department of Justice (DoJ) to be proceeds of crime.

Ex-Falcon Bank manager charged in 1MDB probe

  • Singapore prosecutors on Thursday filed 16 charges against Jens Sturzenegger, the local branch manager of Swiss-based Falcon Private Bank AG, as part of an ongoing investigation into 1MDB.
  • Sturzenegger is the fifth person but the first foreigner charged in Singapore amid global-wide probes into money-laundering and corruption at the Malaysian fund.
  • Prosecutors filed 10 charges of giving false information, five charges of failing to disclose suspicious information and one charge of failing to submit suspicious transactions against Sturzenegger.
  • In one of the charges, Sturzenegger was accused of conniving in Falcon's failure to submit reports on suspicious transactions relating to inflows of US$1.265 billion (S$1.82 billion) into two Falcon bank accounts between March 21 and 25, 2013.
  • The Swiss national who was arrested in October, intends to plead guilty, though it was not immediately clear on which charges he would plead guilty. A hearing is set for Jan 11.
  • 1MDB is currently the subject of money laundering investigations in at least six countries, including Switzerland, Singapore and the United States.
  • It was founded by Malaysian Prime Minister Najib Razak, who chaired its advisory board.
  • Najib has denied any wrongdoing and said Malaysia will co-operate with the international investigations.
  • Falcon was ordered to shut down last October for "serious failures in anti-money laundering controls and improper conduct by senior management". It became the second bank to be closed down by MAS over 1MDB connections, after BSI.
  • On Dec 22, 2016, ex-BSI banker Yeo Jiawei was sentenced to a 30-month jail term, the longest yet handed down by a Singapore court in 1MDB-related cases.
  • He was the third former BSI banker to be found guilty in the city's 1MDB investigations. Yak Yew Chee was sentenced in November to an 18-week jail term and fined for forging documents and failing to disclose suspicious transactions.
  • Yak's subordinate, Yvonne Seah Yew Foong, was jailed for two weeks and fined on Dec 16 for similar offenses.

According to the judgement, Low Hock Peng and Goh Gaik Ewe, the first-named plaintiff and second-named plaintiff, are the parents of the third-named, fourth-named and fifth-named plaintiffs Low May Lin, Low Taek Szen and Low Taek Jho. All plaintiffs support this proceeding. It is convenient to refer to them collectively as "the Low family".

As for the defendants, they are part of the Rothschild banking group which provides professional trustee services to certain trusts of which the members of the Low family are the ultimate beneficiaries.

The New Zealand Herald earlier reported the filings claim a number of New Zealand trusts, with names as varied as Elephant Sun and Stars Tower, were the direct owners of assets including a Bombardier private jet, a hotel in Beverly Hills and a US$55mil Los Angeles mansion formerly owned by Fantasy Island actor Ricardo Montalban.

New York real estate owned by the New Zealand trusts include two Manhattan apartments, including a US$43mil penthouse in the Time Warner Centre formerly owned by celebrity couple Beyonce and Jay-Z.

The DoJ has claimed these assets are collectively worth more than US$230mil.

US court filings said the relatives are beneficiaries of a number of New Zealand trusts that are claimed to directly own a number of assets caught up in the probe of 1MDB.

Below are extracts of the judgement issued on Friday.

- The relief sought by the plaintiffs includes orders affecting the trusteeship of some 26 other trusts.

- As part of a complex trust and corporate structure, the trusts own various assets located in the United States, the United Kingdom, Singapore, France and Hong Kong.

- The ownership structures adopt a similar form. A special purpose company owns a particular asset. The shares of that company are owned by a holding company. In turn, the shares of the holding company are owned by a trust, the beneficiary or beneficiaries of which are either the members of the Low family or another company. The shares of a beneficiary company are held by another trust of which the Low family members are the beneficiaries.

- The assets which are the subject of those proceedings include a Bombardier Global 5000 jet aircraft;

- The Viceroy L'Ermitage Hotel, Beverly Hills; and real estate located at Columbus Circle, New York; Greene Street, New York and Oriole Drive, Los Angeles.

- The US Government's complaints were filed on the ground that the forfeiture assets were derived from violations of United States law, including money laundering offences.

- It is contended that the assets are traceable to an international conspiracy, said by the Government to involve Mr Jho Low in particular, to launder money misappropriated from 1Malaysia Development Berhad (1MDB), a strategic investment and development company wholly owned by the Government of Malaysia.

- 1MDB aims to promote Malaysian economic development through global partnerships and foreign direct investment and to strengthen Malaysia's ties to important economic partners.

- It is said on behalf of the plaintiffs, however, that the Attorney-General of Malaysia has issued an official statement, responding to the US Government's allegations, saying that:

"There has been no evidence from any investigation conducted by any law enforcement agencies in various jurisdictions which shows that money has been misappropriated from 1MDB."

- Although the defendants have filed a statement of defence in this proceeding, they do not oppose the orders sought by the plaintiffs and have indicated they will abide the Court's decision.

- They filed no evidence and do not intend to do so. There is no contest, therefore, to the evidence provided by Mr Zaheer and others on behalf of the plaintiffs and I accept it.

- The defendants do not consent to the orders sought but they have no objection in principle to their replacement as trustees and, so long as the plaintiffs satisfy their obligations to the current trustees, the defendants do not actively oppose the applications.

- The defendants, however, seek orders protecting their interest in the recovery of costs related to the administration of the trusts, these proceedings, and the implementation of any orders the Court might make.

Jurisdiction of the High Court of New Zealand

I am satisfied that New Zealand is the appropriate forum for the hearing and determination of the present proceeding on the grounds advanced by Mr Ingram QC in his submissions on behalf of the plaintiffs:

(a) All of the relevant trust deeds state that their settlement is governed by the laws of New Zealand;

(b) No objection has been made to the jurisdiction of the Court to hear and determine these proceedings pursuant to r 5.49 of the High Court Rules or otherwise; and

(c) There is a real and substantial connection with New Zealand in so far as the proceedings seek the substitution of trustees of New Zealand foreign trusts.

In seeking the orders for the replacement of the current trustees, the plaintiffs rely on s 51 of the Trustee Act which provides the Court the power to appoint new trustees.

The plaintiffs have standing to bring an application for such an order by reason of their having a beneficial interest in the properties which are subject to the trusts at issue in this proceeding.


The undertakings offered by the proposed new trustees are appropriate and necessary, in my view.

The acceptance by the Court of such undertakings, solemnly given, has the same effect as an order of the Court.

That ameliorates any risk that, intentionally or unintentionally, the US forfeiture proceedings might be frustrated by the appointment of replacement trustees.

I accept that, as Mr Ingram QC put it crisply in his submissions, it is not the intention of the new trustees to frustrate the United States proceedings but simply "to enable a fair fight on the merits of (the) case and prevent the loss of assets worth hundreds of millions of US dollars by default."