CEO Morning Brief

1MDB, SRC Seek to Freeze Rosmah’s Assets in Luxury Goods Lawsuit

Publish date: Wed, 12 Jun 2024, 10:56 AM
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TheEdge CEO Morning Brief

KUALA LUMPUR (June 11): 1Malaysia Development Bhd (1MDB), its subsidiaries, and SRC International Sdn Bhd have filed an application seeking a Mareva injunction (asset-freezing order) and other injunctive relief against Datin Seri Rosmah Mansor to bar her from removing or disposing of any of her assets up to the amount of nearly US$350 million (RM1.6 billion).

This is in relation to the companies’ suit against Rosmah and another, over luxury goods which were allegedly obtained through the misappropriation of the plaintiffs' funds in what is now known as the 1MDB and SRC scandal.

In the application filed on Monday (June 10), Ministry of Finance Incorporated (MOF Inc) companies and nine other plaintiffs are seeking an injunction preventing Rosmah from disposing of assets amounting to US$346.01 million, whether in the form of credit, company shares, real property, or others.

They are also seeking for the wife of imprisoned former prime minister Datuk Seri Najib Razak to put in writing the details of all her assets — whether inside or outside of Malaysia — within 14 days after the order is served.

In the application seen by The Edge, Rosmah would be allowed to withdraw RM10,000 monthly, or any other sum ordered by the court, for her living and legal expenses. She would have to first disclose the source of these funds to the plaintiffs.

A Mareva injunction is a court order which essentially freezes the defendant's assets to prevent any transfer of said assets that a plaintiff is seeking to recover, until the disposal of or determination of the main suit.

Besides the Mareva injunction, the companies are also seeking a proprietary injunction where Rosmah is barred from transferring, disposing of, or dealing with the items until the full disposal of the case.

The companies are also seeking an interim preservation order for Rosmah to hand over the luxury goods to the safe custody of the Royal Malaysian Police or any other party deemed fit by the court.

The companies also want Rosmah to disclose "full and accurate" details of these goods, including their locations, or disclose details of parties to whom the items or proceeds may have been transferred.

Should the court grant the order as sought, and if Rosmah defies the said order, she may be guilty of contempt of court and could serve time in jail.

Rosmah's lawyers claim application is 'an abuse of process'

The inter partes (between parties) application will be heard on Friday (June 14).

Lawyers Reza Rahim and Rajivan Nambiar, who are representing Rosmah, said that the application is an abuse of process and that their client would "vigorously oppose" it.

"We have just been served with the injunction papers today. Our client will vigorously oppose the same, particularly when the High Court hearing the forfeiture of these items had previously ruled that the prosecution had failed to prove that the items were products gained from criminal breach of trust (CBT) using 1MDB funds," they said in a brief statement.

This is in reference to the forfeiture proceedings brought by the Malaysian authorities following a raid on two properties in a condominium at Pavilion Kuala Lumpur, after the 2018 general election in which the Najib-led Barisan Nasional government fell.

The forfeiture application, however, was dismissed by the High Court, as it was not proven that the items were proceeds from unlawful activity, namely of 1MDB. The prosecution did not appeal.

The items in question include handbags, jewellery, watches and RM114 million in cash of various foreign nominations.

In the 1MDB and SRC civil suit, a total of 11 plaintiffs claim that monies from the companies were channelled to various offshore entities, and later paid to 48 vendors in 14 jurisdictions for the luxury goods. They claim that there were a total of 320 such payments.

Rosmah is being sued along with Shabnam Naraindas Daswani (also known as Natasha Mirpuri), who the companies claim purchased or procured the luxury goods for Rosmah.

The plaintiffs, represented by Lim Chee Wee Partnership, also claim that the goods sought were all “traceable substitutes” of 1MDB and its subsidiaries’ trust property. Therefore, they have an equitable proprietary interest in the luxury goods.

They are asking Rosmah to return any of these items in her possession, and to pay a sum of about US$350 million or an amount to be assessed by the court. They also want Shabnam to pay them a sum to be determined by the court.

They are also seeking damages or fair compensation to be determined by the court.

Source: TheEdge - 12 Jun 2024

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