Report: Ex-IPIC chief says UAE royal wants assets bought with 1MDB funds

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Former IPIC boss Khadem Al Qubaisi has been in prison in Abu Dhabi since 2016, but has not been charged for any crime.

KUALA LUMPUR, January 25 – The tangled web of deceit that is the 1MDB scandal has taken a new twist with the once high-flying businessman who had helmed the Abu Dhabi-based International Petroleum Investment Co (IPIC) claiming his former boss, a United Arab Emirates (UAE) royal, wants to take over his assets allegedly bought with 1MDB funds.

In a telephone interview with the Wall Street Journal from the prison where he has been detained since 2016, Khadem Al Qubaisi said he was being unfairly blamed for the UAE’s role in the multi-billion dollar scandal.

The United States Department of Justice (DoJ) has already established in its civil suit filed in 2015 and 2016 that Khadem received US$471 million of stolen funds into his private account in Luxembourg and used some of it to buy US real estate. However, he is yet to be charged for any crime both in the UAE and the US.

This raises questions about his detention and claim that a powerful member of the UAE royal family, Sheikh Mansour Bin Zayed al Nahyan, now wants to take over the assets privately, despite the suit in the US and claims by the Malaysian government to such assets. Sheik Mansour is also the UAE deputy prime minister.

Sheikh Mansour was chairman of IPIC at the time Khadem had made the deals with 1MDB. After Khadem’s arrest, IPIC was folded into another UAE fund, where Sheikh Mansour is a board member.

This is the first time that Khadem had been allowed to speak to media. Interestingly, not long after the phone call had been arranged with the WSJ, the financial daily learnt that the person who had made it possible was detained and questioned by Abu Dhabi security services.

The case of 2 Aabar Investments and 1MDB’s US$3.5 billion

IPIC is a one-time business partner of 1MDB and its subsidiary Aabar Investments PJS guaranteed two of 1MDB’s bond issuances worth a collective US$3.5 billion in 2012.

However, based on the instruction of Khadem, 1MDB had transferred the US$3.5 billion to Aabar Investment PJS Ltd or Aabar BVI, which is based in the British Virgin Islands. That company, IPIC later informed 1MDB, was not its subsidiary.

Khadem and his “partner in crime” from IPIC, Mohamed Al Husseiny were previously alleged to have set up Aabar BVI in March 2012, two months before it received US$576.94 million from 1MDB as a security deposit, which later made up part of the US$3.5 billion.

WSJ had previously claimed that US$155 million of these funds ended up financing Red Granite’s Hollywood film “The Wolf of Wall Street”. Former prime minister Datuk Seri Najib Razak’s stepson Riza Aziz is a director of Red Granite.

1MDB deal done on behalf of Abu Dhabi govt, says Khadem

Khadem told the WSJ he had always acted for IPIC in their dealings with 1MDB with the full knowledge of the senior officials at the UAE investment firm.

“I did this deal but I did it on behalf of the government of Abu Dhabi. Now they are putting everything on my back,” he was quoted as saying.

He accused Sheikh Mansour, who is also chairman of the Abu Dhabi Judicial Department, of using the full force of the law to make him the scapegoat for the IPIC-1MDB deal going bad.

There has been no comment so far from the Abu Dhabi government, Sheikh Mansour nor any of his representatives on the allegations made by Khadem.

According to WSJ, Khadem said until now, he still has not been interrogated by any law enforcement body in UAE about 1MDB deals. Instead, UAE officers periodically come and pressure him to sign over his assets, including land and villas in the UAE, to the private entity, Das Holding, owned by the sheikh.

“If I did something wrong for this Malaysia deal, ok, they can go and take my assets, no problem. Why is a private company trying to take control of my assets?” he was quoted as saying.

He added that two nephews who had power of attorney over some of his assets had been detained until they signed over US$40 million in luxury cars and land to Das Holding.

Though Khadem is wanted for questioning in several countries over the 1MDB scandal, so far, Abu Dhabi authorities have not agreed to allow him to do so, WSJ reported.