US Justice Dept files lawsuits seeking to seize properties worth more than $1.35 billion tied to Malaysia’s 1MDB

WASHINGTON (REUTERS/AFP/BLOOMBERG) – The United States Department of Justice filed lawsuits on Wednesday (July 20) seeking to seize dozens of properties worth more than US$1 billion (S$1.35 billion) tied to Malaysian state fund 1Malaysia Development Berhad (1MDB), saying that over US$3.5 billion (S$4.7 billion) was misappropriated from the institution.

The lawsuits, filed in Los Angeles, seek to seize assets”involved in and traceable to an international conspiracy to launder money misappropriated from 1MDB”. The lawsuits said the alleged offences were committed over a four-year period and involved multiple individuals, including Malaysian officials and their associates, who conspired to fraudulently divert billions of dollars from 1MDB.

None of the lawsuits named Malaysian Prime Minister Najib Razak. But they named Riza Aziz, his step-son, as a “relevant individual” in the case. They also named Malaysian financier Low Taek Jho, or Jho Low, and Abu Dhabi government officials Khadem al-Qubaisi and Mohamed Ahmed Badawy Al-Husseiny.

The US lawsuits said funds misappropriated from 1MDB were transferred to the co-founder of Petrosaudi, a company that had a joint venture with 1MDB, and thereafter to a high-ranking official in the Malaysian government it identified only as “Malaysian Official One”.

The assets involved in the case include penthouses, mansions, artwork, a private jet and proceeds from the “Wolf of Wall Street” movie that it says were illegally acquired through money diverted from 1MDB.

“1MDB maintained no interest in these assets and saw no returns on these investments,” the government said.

“That misappropriation occurred in multiple phases over the course of several years,” the lawsuits said.

“The misappropriated funds were then used to purchase the Defendant Asset, as well as to fund the co-conspirators’ lavish lifestyles, including purchases of artwork and jewelry, the acquisition of luxury real estate, the payment of gambling expenses, and the hiring of musicians and celebrities to attend parties,” it added.

US Attorney-General Loretta Lynch will hold a news conference on Wednesday to discuss the suit seeking to recover more than $1 billion linked to a conspiracy to launder money misappropriated from a Malaysian sovereign wealth fund.

The Justice Department said Ms Lynch and other law enforcement officials would hold a news conference at 11.30am Eastern Daylight Time to announce the filing of civil forfeiture complaints seeking to recover more than US$1 billion in assets.

A spokesman for 1MDB did not immediately respond to a request seeking comment sent by e-mail.

The Malaysia fund is at the centre of several international investigations into alleged corruption and money laundering by public officials. Prosecutors in at least four countries – Singapore, Switzerland, Luxembourg and the United States – are looking into money flows from the investment vehicle, which was established for national development.

Among the questions asked by some international authorities is whether politically connected individuals in Kuala Lumpur may have benefited financially from the fund, whose advisory board was headed by Mr Najib.

Both 1MDB and the Prime Minister have denied wrongdoing.

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Corrupt Malaysian official inflate Melbourne property price

In 2013, the private sale of an unassuming five storey apartment block near Monash University in Caulfield stunned local observers. Even in Melbourne’s booming property market, the $22.5 million price tag for a  building designed like an IKEA cupboard seemed well above the odds.

An eight-month Fairfax Media investigation has traced suspicious money flows, court files and corporate records across three continents to uncover why Dudley House’s purchase price was so high.

Its sale was part of a global money laundering and bribery scheme engineered by greedy local developers and powerful officials overseas who pocketed $4.75 million in bribes on this single deal.  The sale of Dudley House in Caulfield which has been linked with corrupt Malaysian officials, who allegedly intentionally paid 20% over the asking price.

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Singapore Property Agent Loses His Car To Thieves in Tesco Tebrau Malaysia

Screen Shot 2015-05-25 at 9.51.30 PMMr Low a Singaporean property agent, posted on his Facebook wall about his stolen car on 23rd May. He claims his car was stolen in Tesco Tebrau between 8.45PM to 9.45PM, and uploaded a picture of the parking lot where his car was supposed to be. He had to be ferried back to Singapore by friends and has since lodged a police report.

Read more…

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5 reasons to be careful when buying residential property in Johor and Iskandar

1. The looming supply

The Monetary Authority of Singapore board member Lawrence Wong told Parliament on May 11 that nearly 336,000 private residential units are in the pipeline in Johor, more than all the private homes currently standing in Singapore.Most of these units are coming up in Iskandar.

Malaysia’s National Property Information Centre (Napic) said in its report released last month that “”incoming supply” of housing units in Johor state – units that are being built – total 142,567 units.

There are another 193,271 units under “planned supply” – with planning approval but awaiting construction.

Added together, they total 335,838 units.

This is nearly half of existing residential stock in Johor, which totals 719,421 units.

2. Even more supply from reclaimed land

The new units of homes coming up in Johor do not include another 1,400ha of reclaimed land near the Tuas Second Link that will come on stream from 2020, Mr Wong said.

The project he was referring to is the raising of four giant islands in the Strait of Johor off Tuas, that is named Forest City.

The master developer, Country Garden Pacificview said that when fully completed in 20 to 30 years’ time, Forest City could have total residents of 700,000. The first phase of reclamation is to be ready in about five years’ time.

Assuming one residential unit contains six people, it means that 116,666 homes would be built on Forest City over the next two decades or so, adding to the new supply of nearly 336,000.

3. Falling property prices

Johor property prices weakened the most in Malaysia in the last quarter of 2014, the latest period where data is available.

Johor prices dropped by 1 per cent in the September to December 2014 period, compared to the same quarter a year ago, according to a Maybank research report in April.

This is worse than the drop of 0.2 per cent for property prices in Kuala Lumpur, and a drop of 0.1 per cent in Penang during the same comparative period, Maybank said.

Kuala Lumpur, Penang and southern Johor are three most active property markets in Malaysia.

Mr Wong told Parliament that the number of Malaysian properties – not just in Johor – bought through real estate agents in Singapore fell from 2,609 in 2013 to 838 last year.

4. Curbs on foreign home buyers

Malaysia early last year doubled the minimum price of homes that foreigners can buy to RM1 million, thus reducing the number eligible to buy units in Johor.

In a move to curb then rising property prices, it also raised the capital gains tax to 30 per cent for properties sold by foreigners within five years of purchase. It taxes them 5 per cent thereafter, except for the Medini township in Iskandar. Medini is to be the downtown area for the Nusajaya flagship zone.

5. Danger of projects being abandoned

With the looming oversupply, there is the usual concern that sharp price falls could follow, and lead to some developers from completing their projects if their funds run dry as buyers stop coming in.

This is a remote possibility now in Iskandar. But there are signs of stress for developers already.

Maybank said in its report, that developers with land in the region are deferring their launches, or changing their property mix “so to avoid direct competition with the Chinese developers”. They have also lowered their sales expectations for Iskandar, the bank said.

See more at The Straits Times

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10 things to look out for when buying property in Malaysia

10. Landscaping

We are not just talking about the landscaping of the landed property or the compound the condominium sits on. It goes without saying that your property must be at least pleasant to look at and well kept.

Managing Director of Knight Frank, Sarkunan said the area or neighbourhood where the property is located has to be taken into account as well. He said if the landscaping of the area is done right, it is a sign the local council is proactive. They will probably be on the ball when it comes to other issues as well.

9. No unplanned vacant land around

He also warned that buyers should be wary of all vacant land in the vicinity of the property, and find out if future construction will affect either road access or the view from your property. If there are no plans for the vacant land yet, he said it is best to stay away. “Investigate, don’t be caught by surprise after you have moved in,” he said.

8. Gated or guarded community

Both real estate lawyer Roy Teo and Property Hub Senior Real Estate Negotiator Chris Tan said gated communities are in demand. Very.

“It ties back to the fact that people have a fortress mentality. These days, people want to keep the riff raff out… Desa Park City is a good example,” Teo said, referring to the much sought-after enclave in Kepong.

According to Iproperty.com, some of its units (Safa) which were previously priced at RM450,000 are now going for RM1.2 million. He said previous generations used to aspire to owning bungalows, a house in the middle of a big piece of land.

Today though, he said, those properties are much lesser in demand while he sees a rise in either condominiums or gated communities, which mostly have smaller plots of land, but with bigger build-ups.

7. Near international or high-performing Chinese schools

Teo said having a Chinese school in the neighbourhood adds “huge value” to properties nearby. For example, he said a Chinese school that has relocated to a new development that his company has recently launched in Cyberjaya has been its “biggest selling point.”

He said more non-Chinese families are also looking to move closer to these vernacular schools. Tan, meanwhile, said that people want to be nearer to schools not only because they want to send their children there, but also to have a good support system among parents.

“If you want to do home schooling, you are better off in a neighbourhood where there are people with the same interest, for example.“Another example, a popular Chinese school — Lai Meng —  recently moved to Bukit Jalil from KL. If you want your kid to go to Lai Meng for example, you would move closer because you stand a better chance of getting a place in the school,” he said.

6. Who are your neighbours?

Tan, who is a regular speaker at property forums, said the neighbouring township is an important consideration when buying a home.“Why Cyberjaya can work, it’s because it is next to Putrajaya. Why PJ can work because the neighbour is KL and why Iskandar Malaysia can work because the neighbour is Singapore.

“In that sense, the neighbour does play a part because you want to have the best of both worlds. Perhaps lower expenses on one side and high income on the other side,” he said.Just as important, find out the racial composition as well as the job backgrounds of your neighbours, he added.

Whether you prefer a culturally mixed neighbourhood, or one that speaks only a particular language, or what kind of jobs your neighbours do, and if they are mostly tenants or owners… you need to do your homework.

5. Population growth

Tan also said it is important to observe if the population trend in the area is on an upward trend.“At the end of the day, real estate is meant for human consumption.  So the bigger the population, the higher chance of you getting a better return from your property investment,” he said.He pointed out that with a bigger population, there will also be better supply services such as hypermarkets, clinics, laundry services and restaurants.

4. Central location or conveniently located

You don’t need to be a rocket scientist to figure out that the more centrally located a piece of property is, the higher in demand it is. Teo also noticed that the trend has shifted and condominium units attached to malls are back in demand again because people want that sort of convenience.

“When you have strata properties on top of shops, those used to be cheap properties, you can see some in Chow Kit, Bukit Bintang…  people didn’t want to stay in that kind of environment,” he noted. He said the trend is back and is especially popular among the younger crowd who are looking for smaller units, about 1,000 square feet or studio sizes.

3. Infrastructure/connectivity

The real estate negotiator said connectivity is extremely important as more people move further away from central locations. People are moving to townships like Cyberjaya and Setia Alam because of the highways that now connect to the city.

Tan noted that most people do not want their homes to be too close to business activities but they do not want it to be too far away either, because they need the supply and services to be close. People are willing to accept if their workplaces are slightly further away, as long as they are well connected by highways or LRT, MRT stops.

2. Reputable developer

Sarkunan said it is extremely important to buy from developers with a good track record and a practice of delivering on time with quality. “It also must have a good following and someone who does not price their products to the maximum and allow for reasonable returns,” he said.

1. Location branding

Tan said branding of location can change, driven by “visionary developers” or plans.“For example Sentul, many years ago, when we talk about Sentul, we have a certain perception about it. YTL changed the perception of that area and for all intents and purposes, Sentul is very arty farty now because of KLPAC, and it’s actually a very nice location because it is very close to the centre of action,” he said, referring to the KL Performing Arts Centre that is along Jalan Ipoh.

The property lawyer said that now would be the best time to buy with the launch of a slew of affordable housing schemes and the fact that home prices will not fall, especially when the country is only five years away from its ambition of becoming a developed nation.

 Read full story at Malay Mail
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