[Flashback] Heist of the Century – How Jho Low Used PetroSaudi As “A Front” To Siphon Billions Out Of 1MDB


Posted by Ronald SIM Hong Sheng, Year 4 undergrad at the School of Business, Singapore Management University

Together with London’s Sunday Times newspaper, Sarawak Report has completed an in-depth investigation into the trail of the missing billions at the heart of Malaysia’s 1MDB (One Malaysia Development Berhad) financial scandal.

We have obtained access to thousands of documents and emails relating to transactions by 1MDB, including its initial joint venture with the little known oil company PetroSaudi International from 2009.

What the documents establish is that, in spite of copious official denials, the entire joint venture project was conceived, managed and driven through by the Prime Minister’s associate and family friend the party-loving billionaire tycoon, Jho Low.

The documents also prove that the USD$700 million so-called “loan” that was supposedly repaid to PetroSaudi as part of the joint venture agreement, was in fact directed into the Swiss bank account of a company called Good Star, which is controlled by Jho Low.

That money was then partly used to buy out Taib Mahmud’s UBG bank in Sarawak at a very advantageous price for the chief minister and his family, who had been failing to get a deal on the open market.

PetroSaudi had agreed to act as “a front” for Jho Low on such deals, according to the documents, and it was a subsidiary of PetroSaudi International registered in the Seychelles, which bought UBG, using money siphoned from 1MDB.

How Jho Low managed the 1MDB PetroSaudi Joint Venture deal

Brains behind PetroSaudi, Director Patrick Mahony

Among the email exchanges obtained by Sarawak Report are documents from an initial meeting that took place in New York on September 8th 2009, between the then Wynton Capital head, Jho Low and the UK businessman Patrick Mahony, who had been introduced a few days earlier by PetroSaudi’s CEO, Tarek Obaid.

Mahony worked for the investment group Ashmore, which was funding PetroSaudi’s main operation, an oil well in Argentina.

Also at the meeting were two of Jho Low’s close colleagues, Li Lin Seet and a UBG bank lawyer, Tiffany Heah.

In an email written to “Jho, Seet and Tiffany” the following day, Mahony made clear on behalf of PetroSaudi that the company was very willing to become involved in a series of deals proposed by Jho Low, which were expected to involve 1MDB and Petronas.

Mahony also understood that Jho Low wanted “to use PetroSaudi International as a front” for certain deals and he said that “we would be happy to do that”:

“Jho / Seet / Tiffany” begins the lengthy email

“….I think what would make sense is that we set up a joint venture where we contribute our assets and you can contribute cash to match our asset base. We can then decide where that cash goes. Some of it may go to paying us back for some cost and some should stay in the JV for new acquisitions. We can discuss how those acquisitions will work and how money should flow once we do the deals through the JV…. I am assuming here that 1MDB will be our partner first and that Petronas will come in later…. Over time, Petronas could buy the JV and both PSI and 1MDB would have made a big return on the initial investment.

Lastly, we know there are deals you are looking at where you may want to use PSI as a front, we would be happy to do that. You need to let us know where…. On this idea of being a front, we need your input”

This letter from Mahony was also significant in that it conceded that PetroSaudi in fact had virtually no real “asset base”, even though the company planned to achieve a paper valuation for the purposes of the joint venture of well over $2 billion.

This valuation was to be based on an oil concession in Turkmenistan, which was actually still owned by a completely separate Canadian company, called Buried Hill, with whom Mahony had initiated negotiations for a possible joint venture in July:

“Briefly, we can value the Argentinean assets at around $50-$75m and the Turkmenistan asset at around .. $1b-$1.5b after the border dispute is resolved. Argentina has approximately 30m barrels of oil and Turkmenistan 500m. If we do the deal we want with the Canadian company that currently owns the asset in Turkmenistan, we will also pick up a block in the Gambia but the value of this unclear at this point”

Despite PetroSaudi being essentially valueless, therefore, it nevertheless apparently held one key advantage for Jho Low’s purposes of creating “a front” – the owner, a friend of the Director Tarek Obaid, was Prince Turki bin Abdullah, one of the sons of the then King of Saudi Arabia.

Founding owner of PSI, Prince Turki bin Abdullah

Jho Low was clearly eager to move swiftly ahead with a deal, because from this date the correspondence shows that negotiations for the 1MDB PetroSaudi joint venture were conducted at a breakneck speed, all at the initiative of Jho Low and his team, who were skillfully abetted by the UK businessman Patrick Mahony.

Also dated on September 9th, for example, is an email sent by Jho Low’s colleague Li Lin Seet to Tarek Obaid and Patrick Mahony, on the subject: “Proposed Timeline For Joint Venture with PetroSaudi”.

In the email Seet said that Low had “spoken to the Top Boss” and that there was a “target to close a deal by 20th Sept where all agreements are signed and monies can be paid to PetroSaudi before end of Sept.”

Low, who was copied in on the email trail, ‘replied to all’ the next day:

“We need to move fast n we need as much detailed info u have as fast as possible. We want to sign and pay by sept 09. Wil be emailing out a timeline”[sic].

It is notable that none of these emails on the Proposed Timeline for the Joint Venture are copied to anyone from 1MDB.

“Storyline for 1MDB”

Indeed later emails show that it was not until September 15th that the CEO of 1MDB, Shahrol Halmi, and his Malaysian colleagues were involved in the proceedings and again it was on the initiative of Jho Low, who organised a conference call between the parties.

Email exchanges show how the PetroSaudi Directors collaborated with Low, Li Lin Seet and Tiffany Heah on how they would present the company to the team from 1MDB. They drew up what they called a Storyline for their Conference Call and Seet opened up with a number of suggestions:

From: SEET Li Lin
Date: Tue, 15 Sep 2009 17:26:00 +0200
To: Jho Low ; Tiffany Heah ; Patrick Mahony
Subject: Storyline for Conference call with 1MDB

Hi Patrick,

I will circulate you some information on 1MDB soon….

Storyline for Conference Call: Patrick and Shahrol
1) Introduction on background
a. Emphasize on ties with Tarek and role of Tarek in KSA
b. Emphasize on Prince Turki?s role in PSI
c. Hint that PSI is owned indirectly by King Abdullah.

2) Events that has occurred
a.King Abdullah learnt about 1MDB from PM Najib Razak and spoke to PM about joint-investments between KSA and Malaysia through a JV.
b. Prince Turki was tasked by King Abdullah to follow up on this matter and has met PM Najib Razak to re-iterate this desire. Leaders or both countries are committed to partnership between PSI and 1MDB.
c. In fact, both leaders will very much like a deal completed by end of September in order for it to be the centerpiece of their meeting on 30 th Sept 2009.

Patrick responded to Jho Low’s assistant advising more caution:

“Ok. Need to be careful about some of the things we say – especially things concerning the big man in KSA. Let’s please discuss before the call. Thanks”

Meanwhile both parties agreed there was no “need to mention about the assets or any oil & gas matter in this call” as such details would be handled later.

After this conference call apparently took place it was again Jho Low who proceeded to initiate more formal written introductions between the 1MDB team and their future joint venture partners, through an email entitled “re-Introductions for PSI and 1MDB” – at this stage the two companies were only 10 days away from signing their initial billion dollar deal on 29th September.

YAB PM Najib Razak – friend of Jho Low

During this initial email introduction of September 18th, Jho Low again insinuated that he was representing the highest authorities, in this case the “YAB PM” directly, in the matter.

The twenty-something tycoon again focused on playing up PetroSaudi’s owner Prince Turki’s royal connection, impressing on the 1MDB Chief Executive an entirely untrue assertion, which was that the negotiations were officially connected to “furthering Saudi-Malaysia bi-lateral ties”.

This is not the only time that the correspondence shows Jho Low assuming a quasi governmental and diplomatic status in his dealings between Malaysia and the Middle East. Did the Foreign Ministry know anything about it and if not, whom was Jho Low representing?

“I am pleased to confirm as per YAB Prime Minister’s discussions with HM King Abdullah Al-Saud on furthering Saudi-Malaysia bi-lateral ties, together with YAB PM’s discussions with HRH Prince Turki Al-Saud, PetroSaudi and 1MDB is on track with respect to your USd2.5b JVC partnership. YAB PM has confirmed that he looks forward to the signing ceremony on 28 September 2009 to be attended by HRH Prince Turki Al-Saud.” said Jho Low to 1MDB’s Shahrol Halmi 18th September.

Shahrol Halmi – out of the loop

Jho Low had also reassured his 1MDB correspondents, therefore, that they were “on track with respect to your USD$2.5 billion Joint Venture partnership”, despite having been advised from the start that PetroSaudi would be bringing zero cash to the deal, only its supposed assets.

The extent to which Shahrol Halmi was still playing catch up is revealed later in the same email trail, when the 1MDB chief admitted two days later on 20th September that he had yet to receive or read anything about the company he was due to start billion dollar joint venture negotiations with the following week in London:

From: Shahrol Halmi [mailto:shahrol.halmi@tia.com.my]
Sent: Sunday, 20 September, 2009 10:40 AM
To: Low, Jho (Personal); Tarek Obaid
Cc: ‘Casey Tang’; Patrick Mahony; Robert Ho
Subject: RE: Introductions for PSI and 1MDB
Importance: High

Dear Tarek, pleased to make your acquaintance. Looking forward to meeting face to face next week. I understand that you’ve couriered over a copy of PSI’s company profile late last week. Unfortunately it being a long weekend over here in Malaysia, we haven’t received anything yet. [1MDB CEO Shahrol Halmi, 20th Sept]

In response Patrick Mahony sent him on Tarek’s behalf:

“a brief presentation. This is a bit dated and only includes the upstream oil and gas ambition of PSI (it also does not have any asset specific data) but should give you a sense of what we are about.” Mahoney also warned Halmi that PSI is “very press shy” .. .(one of the main reasons governments like to work with us)” and he therefore required to be sent advance drafts of any planned publicity.


Three days later on Wednesday 23rd September a team from 1MDB, including Halmi, was already over in London, supposedly negotiating the terms of the deal.

Yet again, the correspondence shows the whole set up was organised and arranged by Jho Low, with his assistant Li Lin Seet contacting PetroSaudi beforehand to strategise the meeting at the offices of oil company’s own lawyers, White & Case.

Jho Low would of course attend as a go-between, as the emails made clear:

From: Seet Li Lin [mailto:seet.lilin@gmail.com]
Sent: Monday, 21 September, 2009 2:06 PM
To: Patrick Mahony

Subject: Meeting in LDN

Hi Patrick,

Jho is tied up in meetings and could not do the call. He requests that you bcc himself and me in any correspondence to 1MDB. Also, the meeting on Wednesday is expected from 11am to 5pm. Can you get White and Case to book 2 meeting rooms. 1 for 1MDB and PSI. 1 for Jho and PSI.

In the same email exchange Seet explains to PetroSaudi’s Patrick Mahony that, as far as 1MDB was concerned, matters were a done deal:

“Jho has softened the ground so the 1MDB ppl are expected to come and meet, chat to know each other and sign.” Seet wrote to Mahony a couple of days beforehand.

Jho Low crafted the whole Joint Venture deal before either PetroSaudi or 1MDB saw what was the plan

These same emails provide the equally telling information that the first draft copy of the Joint Venture deal to be negotiated with 1MDB was drawn up by Jho Low’s own office.

On the 21st September, two days before negotiations were due to start on the billion dollar deal, that draft was still being eagerly anticipated by Low’s contacts at PetroSaudi.

Mahony Sep 21, 2009 14:34: “ETA for first draft of agreement is still in a few hours…?

Seet Li Lin 21 Sep 2009 15:54:21: “Hi, give us a couple more hours for JVA”

PetroSaudi’s Patrick Mahony then suggests to Seet that his lawyers and Jho Low’s lawyers should first liaise with each other, before they contacted 1MDB’s lawyers, about the content of the proposed Joint Venture document being drawn up by Jho Low’s team in New York:

From: Patrick Mahony,
To: Li Lin Seet (gmail),
Subject: RE: Meeting in LDN Sent: Sep 21, 2009 13:26

“I also need to get the 1mdb lawyer and my lawyer in touch asap. I will wait until you send the jva but what i suggest is that when you send me the jva, you introduce me to your lawyers by email and then i will forward the jva to my lawyers and introduce my lawyers to your lawyers. Thanks”,

The inescapable conclusion is that the jet-lagged team, arriving from Malaysia the next day, had acted as little more than on-lookers in the drawing up of this ‘joint venture’, for which only they would be putting up any cash, on behalf of the Malaysian public.

According to the contract about to be place on the table in front of them USD$1 billion was due on day one, with a further drawing rights available of up to USD$5 billion.

Final moves – how Jho Low orchestrated a “loan repayment” due to PetroSaudi into a “premium” destined for his own Good Star account

Last week Sarawak Report triggered outrage when it revealed the details of the original Joint Venture Agreement, signed by 1MDB and PetroSaudi on 29th September 2009, which till then had been kept secret.

Key player – Jho Low’s side kick Li Lin Seet, signatory of Good Star
Key player – Jho Low’s side kick Li Lin Seet, signatory of Good Star

The reason for the anger was discovery of a massive USD$700 million “loan repayment” obligation placed on 1MDB, supposedly due to ‘pay back a loan’ owed to PetroSaudi’s parent company on the signing of the deal.

It had been agreed this money would be paid out of the billion dollars contributed by 1MDB, writing off 2/3 of its investment.

However, telling emails written by Patrick Mahony at the very same time to the Swiss private bank BSI, show that while the money was being described as a loan repayment under the terms of the joint venture, he preferred to describe this whopping sum as a “premium” (bonus) to the prospective recipient bank:

From: Patrick.Mahony@Petrosaudi.com
To: chr.zuc.a1@bsibank.com
Subject: Additional information please

“….The 700m is premium that was made in the transaction and will be used to fund future transactions in any sector (not necessarily oil and gas)


This explanation given by Mahony to BSI clearly contrasts with the reason provided in the joint venture agreement for the removal of the money, which said that PetroSaudi’s parent company had injected the loan into the subsidiary it had created to take part in the deal – but then (naturally) expected the money back once the joint venture was signed.

Jho Low’s lawyer, Tiffany Heah
Jho Low’s lawyer, Tiffany Heah

Our research has shown that this careful repayment provision had been written in to the very first draft of the agreement, provided by Jho Low’s own legal team in New York, which was sent over to PetroSaudi by lawyer Tiffany Heah.

From: Tiffany Heah
To: Patrick Mahony
Date: Mon, 21 Sep 2009 12:36:37 -0400
Subject: JVA
Attachment(s): 1


It can be seen through a series of drafts over the course of the following week that the PetroSaudi legal team from White & Case in London, headed by the lawyer Tim Buckland, then re-wrote, added to and refined the clause, arguably strengthening its provisions, while making the wording more subtle.


That entire process was completed in just one week, between the presentation of Jho Low’s original version of the contract at the key first London meeting on 23rd September and the signing of the joint venture on 29th.

And during that fevered period, this expensive team of London lawyers kindly provided a couple of power point presentations, in order to break down the whole procedure for the less gifted brains involved:


One of the most interesting aspects of the above White & Case power point presentation, designed for the negotiations for 1MDB 23rd September, is how closely it resembles the presentation sent over to PetroSaudi by Jho Low’s underling Li Lin Seet a week earlier on September 14th:

From: SEET Li Lin
To: Patrick Mahony, Tarek.Obaid@petrosaudi.com
CC: Jho Low, Tiffany Heah
Date: Mon, 14 Sep 2009 02:17:52 -0400
Subject: Re: Proposed conference call: 330pm (US Eastern time)
Attachment(s): 1

Dear Tarek and Patrick,

We will be using the following set of presentation for our discussion.

Do let me know if the proposed timing is good for you all.


Shortly after the signing of the deal Buckland resigned his position at White and Case and took up his present job – as a Director of PetroSaudi.

“Seen no evidence” that Jho Low has ever been involved – CEO Arul Kanda Kandasamy
“Seen no evidence” that Jho Low has ever been involved – CEO Arul Kanda Kandasamy

Likewise, Patrick Mahony, who had been employed as an investment banker by the hedge fund Ashmore during the period of his engagement in the PetroSaudi negotiations, also resigned his position straight after, in favour of a Directorship at PetroSaudi’s plush, brand new offices in Curzon Street, in the heart of London’s Mayfair

Yet, despite all the evidence, 1MDB’s brand new CEO, Arul Kanda Kandasamy, was still maintaining last week in statements to journalists that he has been able to find no evidence whatsoever of any involvement by Jho Low in the affairs of 1MDB.

Bank transfers

What that evidence goes on to show is that the critical manoeuvres for transferring the USD$700 million “loan” cum “premium” into the control of Jho Low took place straight after the signing of the agreement on the 29th September – that and Jho Low was involved and copied in on every step.

Jho Low – on the case with 1MDB
Jho Low – on the case with 1MDB

We have copies of a ‘PetroSaudi Loan Agreement’, which had been drawn up by White & Case indicating that this vast sum of money had been loaned from the parent company PetroSaudi Cayman Holdings to 1MDB PetroSaudi on 25th September.

The letter was signed by PetroSaudi’s boss, the twenty something Tarek Obaid.

However, there is no evidence to suggest that this ‘loan’ was anything apart from an entirely contrived transaction between two arms of PetroSaudi, a company with very little working capital.

Three days later 1MDB was committed to pay it back in hard currency.


In order to complete the heist of $700 million from 1MDB into the Jho Low controlled account that was waiting for it, the CEO of 1MDB Shahrol Halmi needed to concede to a ‘repayment’ request under the joint venture agreement crafted by Jho Low.

The documentation for this completion of the deal was again clearly collaborated between Jho Low and Patrick Mahony’s team of lawyers from White & Case.

Mahony sent Jho Low an email on 30th September entitled Funding/ Completion Instructions and Documentation, which contained 7 crucial documents, including a so-called letter of demand for the $700 million ‘loan’ as well as last minute instructions on bank account changes:


The letter of demand, signed by PetroSaudi CEO Tarek Obaid, to 1MDB required the immediate “repayment of the “loan” of $700 million from the 1MDB PetroSaudi joint venture company to what he describes as “the bank account of our affiliate PetroSaudi International Limited”.

Pterosaur boss cited a Good Star account for receiving the ‘repayment’
PetroSaudi CEO had cited a Good Star account for “Final Crediting”

However, Sarawak Report has been able to establish from the extensive documentation that the above account at RBS Coutts in Zurich did not in fact belong to PetroSaudi, or to an affiliate.

Rather it was registered in the name of a company called Good Star Limited, which is a company controlled by Jho Low.

Account details for Good Star match the 1MDB payment
Mahony and Tarek Obaid received payments from Good Star – their account details for Good Star match the 1MDB payment

This means that the money, which was stated as having been paid back to PetroSaudi as part of the joint venture agreement, was in fact signed over by Tarek Obaid to an entirely separate third party, Good Star Limited.

Signatory for Good Star is Li Lin Seet
Signatory for Good Star is Li Lin Seet

Jho Low has publicly stated, time and again, that he has had nothing whatsoever to do with the investment activities of 1MDB and that he has received no money or benefits from the development fund.

However, Sarawak Report has established from the documentation that the signatory and Chief Investment Officer for Good Star was none other than Jho Low’s deputy Li Lin Seet.

Seet had acted as the tycoon’s key right hand man throughout the management of the deal between 9th-29th September 2009 and was copied in on all the correspondence we have received relating to the deal.

Chief Investment Officer and signatory of Good Star
Chief Investment Officer and signatory of Good Star

The Singapore number listed above, was included in a contract signed on 29th September between Good Star and Patrick Mahony, straight after the joint venture agreement with 1MDB.

We have established that it still belongs to Seet Li Lin, who is now the Vice-President of Jho Low’s company Jynwel Capital.

Seet returned our call made to this number last week, confirming his identity and his role at Jynwel. But, when we asked about Good Star and his role as its Chief Investment Officer he said:

What? I don’t know what you are talking about” and then turned off his phone.

Shahrol Halmi knew all along – RBS Coutts, the Queen of England’s own bank

Yet another email trail in this fascinating set of documents involves last minute frantic interchanges between the banks involved in transferring this huge sum of money to Good Star.

These make clear that the head of 1MDB knew that this company was the destination for the $700 million, not an affiliate of PetroSaudi.

Because, when 1MDB’s own bank, Deutsche Bank Malaysia, came back asking for confirmation on behalf of RBS Coutts Zurich as to the identity of “the beneficiary with regard to the 1MDB remittance” Halmi replied to his banking officer Jacqueline Ho:

“From : Shahrol Halmi
Date : Fri, 2 Oct 2009 08:21:15 -0400
To : ‘jacqueline.ho@db.com’ ; Casey Tang

Jac, please use this address for GOOD STAR LIMITED.

P.O.Box 1239, Offshore Incorporation Centre, Victoria, Mahe, Republic of Seychelles


The PetroSaudi team and Jho Low were copied into this email exchange and Jho Low commented to Patrick Mahony:

“Shld be cleared soon. Pls update tarek.”

Surely, the head of 1MDB must have been aware that Good Star was an account that had nothing to do with PetroSaudi’s official company structure, since there was no record of it in the PetroSaudi International group of companies?


Thanks to Halmi’s positive intervention, the $700 million transfer appears to have been finally banked later that day.

Jho Lo’s side-kick Li Lin Seet provided a series of comments on Facebook during this period of dealmaking. On September 30th, the day the money was transferred from 1MDB he gushed:

The deal is clinched
The deal is clinched

Ten days later, with the money securely transferred, he and his friends were clearly living it up in Vegas:

Raining Cristal – the world’s most expensive champagne thanks to Malaysia’s diverted development money?
Raining Cristal – the world’s most expensive champagne – was this all thanks to Malaysia’s diverted development money?

Jho Low’s inner team were not the only ones with reason to celebrate.

On the same day that Tarek Obaid sent his letter of demand to 1MDB, on 29th September, Good Star also issued two contracts, signed by Jho’s underling Li Lin Seet.

One contract was to Tarek Obaid himself, paying him a “broker fee of USD$85 million”‘


The other contract was from Good Star to Patrick Mahony, hiring him as an Investment Manager for a fund also of $85 million, but with a planned leverage of up to $500 million.

This contract entitled Mahony to a baseline 2% management fee, per annum.


Jho Low himself has meanwhile embarked on a career as one of the world’s richest and most flamboyant youthful tycoons.

Research by Sarawak Report indicates that in 2012 he has purchased the most expensive ever mansion in Hollywood Hills at 1423 Oriole Drive, for just under $39million, dwarfing the $17.5m he spent on buying a house for his pal, the PM’s step son Riza Aziz.

$39 million dollar mansion

He is also believed to be the proud owner of one of the world’s largest ocean-going yachts, which is currently bound from Tahiti towards the Far East:

Jho Low is believed to have taken delivery of Equanimity , the world’s 34th biggest yacht in July 2014
Jho Low is believed to have taken delivery of Equanimity , the world’s 34th biggest yacht in July 2014

Low’s Cristal Champagne splashing antics have subsequently, of course, become legendary in the gambling and nightclub hotspots in the world. This phenomenon was notably recorded by the world’s gossip columns from late October in 2009, when he first starting catching the attention of the celebrity writers in the United States.

In recent years the youthful ‘billionaire tycoon’ has concentrated on building a name for himself as a philanthropist in the West, stating just last week to Forbes Magazine that “philanthropy is cool…and good for business and good for PR”.

New look?
New look – is Jho Low a Charity Man?

It seems reasonable, therefore, to ask whether Malaysia’s 1MDB development money has been channeled towards pleasure and debauchery, as well as good causes in the West, instead of helping the intended poor of the country from whence the money has come?


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