KUALA LUMPUR (June 1): 1Malaysia Development Bhd (1MDB) and its four subsidiaries are seeking permission from the High Court (Insolvency division) to continue its civil suit against Eric Tan Kim Loong despite the fugitive accomplice of Low Taek Jho (Jho Low) being declared a bankrupt for not settling his income taxes.

1MDB, along with 1MDB Energy Holdings Ltd, 1MDB Energy Ltd, 1MDB Energy (Langat) Ltd and Global Diversified Investment Company Ltd, named Tan as judgment debtor and the Malaysian government as judgment creditor in the summons in chambers filed by Messrs Skrine on May 2.

It sought leave (permission) to continue with the suit at the High Court (Civil division) where it is seeking a monetary claim of US$2.795 billion (RM12.9 billion) from Tan, for knowing receipt, fraudulent misappropriation, unjust enrichment, breach of constructive trust, breach of fiduciary duty and conspiracy.

The application stated that as the suit against Tan involves complex factual and legal issues, it can only be dealt with through this court, rather than in Tan’s bankruptcy.

In addition, there are several potential questions and issues that require a hearing in court, and not by the director general of the Insolvency Department.

Prior to this, Tan had been sued along with Jho Low, Tan Sri Larry Low Hock Peng, his wife Puan Sri Goh Gaik Ewe and Jho Low’s siblings Low Taek Szen and Low May Lin in the multi-billion dollar suit filed in May 2021.

Tan had been declared bankrupt for not paying RM68 million in income taxes which he owed between 2010 and 2013.

1MDB director Mohd Hisyamuddin Awang Abu Bakar, in his affidavit in support of the application, said since the suit had been filed two years ago, the balance of convenience is in the companies' favour as the court has full knowledge of the facts involved.

He further described Tan as a crucial member of a group of influential fraudsters in “one of the world’s greatest financial scandals” or the “largest kleptocracy to date” listed by the US Department of Justice.

The sum of US$2.795 billion, Mohd Hisyamuddin said, cannot be simply determined by the director general of Insolvency interpreting and examining documents as part of the bankruptcy process. It also involves issues, facts and documents which cannot be determined by the director general from a proof of debt form.

“The subject matter of the applicants claim against the judgment debtor (Tan) concerns substantial amount of sovereign funds in the sum of US$2.795 billion and more importantly the public interests of having the largest kleptocracy fraud in Malaysia, if not internationally, adjudicated by a court of law so that justice can be dispensed with,” Mohd Hisyamuddin stated.

He added that the claims are not straightforward and not suitable to be handled in the bankruptcy process.

Following this, a case management of the application was called before High Court (Insolvency division) senior assistant registrar Haneefa Ariffin on Thursday (June 1)

Last month, it was reported that 1MDB and its subsidiaries are seeking leave from the High Court (Civil division) to continue the action against Tan where another case management has been fixed for Tuesday (June 6).

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