The vocal 1MDB critic says jewellery was a gift to the PM’s wife in March 2014, which she has knowledge of.
KUALA LUMPUR: 1MDB critic Khairuddin Abu Hassan has filed a suit seeking that the High Court order the prime minister’s wife, Rosmah Mansor, to return a 22-carat pink diamond set in a necklace to the sovereign wealth fund.
The former Umno leader, who was sacked from the party two years ago, also wants businessman Low Taek Jho to pay 1MDB all the money allegedly misappropriated from the company.
Khairuddin said he was initiating the suit as no other individual was bringing any action to recover the jewellery and enforce the law.
“The taxpayers will benefit through the recovery of the jewellery because they are the ultimate paymasters of 1MDB debts,” he claimed.
He also wants Rosmah and the businessman, better known as Jho Low, to compensate 1MDB for the alleged misappropriation and use of the jewellery and repay any money due to the company.
Khairuddin said that his writ and statement of claim, filed yesterday at the Kuala Lumpur High Court registry via e-filing, also sought that Rosmah and Jho Low pay costs and other reliefs deemed fit by the court.
Apart from Rosmah and Jho Low, Khairuddin also named 1MDB as the third defendant in his suit.
He said 1MDB, set up by Prime Minister Najib Razak in 2009 to promote economic development, was not expected to take legal action to recover the jewellery as the government-linked company was under the control of the prime minister.
He cited Article 117 of 1MDB’s Memorandum and Articles of Association to prove that nothing took effect without the sanction of Najib.
Khairuddin said 1MDB had obtained US$6.5 billion (RM27.93 billion) by borrowing from overseas lenders, and that the company was the beneficial owner of the money.
He alleged that Jho Low, whose last known address was at Tanjung Bungah, Penang, committed theft or criminal breach of trust of the said loans and had no title in law or in equity over the money.
In particular, he said that between June 2013 and March 2014, Jho Low, acting through his agent, Tan Kim Loong, purchased the jewellery from Loraine Schwartz in New York for US$27.3 million, money allegedly stolen by the businessman.
His suit is premised on the claim that Rosmah could not have acquired legal title to the jewelry despite having received it as a gift in March 2014.
“The first defendant (Rosmah) gave no consideration for the said jewellery. Therefore, she has no title in law and equity to it. 1MDB is therefore entitled to trace the jewellery in the hands of Rosmah.”
He said although the jewellery belonged to 1MDB, the company would not take action to recover the valuables because it was under the control of Najib, Rosmah’s husband.
“Despite overwhelming evidence that this money was stolen and misappropriated, 1MDB continues to deny this fact,” he alleged.
The United States Department of Justice (DoJ) had filed two civil forfeiture lawsuits against assets worth US$1.8 billion (RM7.7 billion) that it claimed were bought with funds stolen from 1MDB.
The suits comprised the largest legal action brought under the DoJ’s Kleptocracy Asset Recovery Initiative.
The first suit was filed on July 21 last year in which the term “MO1” (Malaysian Official 1) was mentioned 36 times.
On June 15, the DoJ, in its court filings, said nearly US$30 million was allegedly stolen from the sovereign wealth fund and used to buy jewellery.
The filings lodged at the US district court in Los Angeles did not identify Najib or Rosmah by name, but said the jewellery purchases were for the wife of “Malaysian Official 1”.
The Prime Minister’s Office had said in a statement that it was “concerned by the unnecessary and gratuitous naming of certain matters and individuals that are only relevant to domestic political manipulation and interference”.
Najib has consistently denied any wrongdoing.
In July, Jho Low said attempts to link him to recent guilty pleas in the 1MDB-related probes were based on “unfounded assumptions”, after Singapore prosecutors said he had used money traceable to the Malaysian government strategic investment fund for his own benefit.
In a statement, he also pointed out that Malaysian authorities said there had been no evidence of any misappropriation of 1MDB funds.
“No wrongdoing has been proved in any jurisdiction relating to the alleged misappropriation of 1MDB funds, and this development in Singapore does not change that.”
Rosmah has in the past denied benefiting in any way from 1MDB funds.