KUALA LUMPUR (Nov 7): The High Court has set Dec 11 to deliver its decision on the prosecution’s application to bar PetroSaudi International Ltd (PSI) chief executive officer Tarek Obaid and others from accessing the US$340 million allegedly linked to 1Malaysia Development Bhd (1MDB).

Judge Datuk Ahmad Shahrir Mohd Salleh set the date during proceedings on Thursday. The date was set to allow the prosecution time to file additional submissions.

Besides Tarek, the other respondents in the application are PSI, PetroSaudi Oil Services (Venezuela) Ltd, United Kingdom (UK) based-law firm Clyde & Co LLP, and Temple Fiduciary Services Ltd.

PetroSaudi Oil Services (Venezuela) is a subsidiary of PetroSaudi Oil Services Ltd (PSOSL). PSOSL in turn is a unit of PSI, co-founded by Tarek.

Deputy public prosecutor Norinna Bahadun is representing the prosecution, while Tarek is represented by former solicitor general II Datuk Mohd Yusof Zainal Abiden; and Alex Tan is acting for PSI, PetroSaudi Oil Services (Venezuela), and Temple Fiduciary Services Ltd.

Clyde & Co was not represented.

In the application filed in July 2020, the government is seeking a total of US$340 million (as of February 2019) held in an account at Clyde & Co, on behalf of PetroSaudi Oil Services (Venezuela).

In addition, the prosecution is also seeking unspecified sums that were deposited under an intermediate account name of Temple Fiduciary at Barclays Bank in the UK.

The prosecution has contended that the funds in the escrow account could be traced back to 1MDB.

However, the respondents have argued that the funds in the account were “clean monies” — a result of an arbitration award in which Venezuela’s state-owned entity Petroleos de Venezuela SA (PDVSA) was ordered to pay PetroSaudi Oil Services (Venezuela) for services rendered in relation to an oil-exploration contract.

Tan pointed out that both parties had been engaged in an arbitration proceeding in relation to sums under a drilling contract, and PDVSA was ordered to deposit US$500 million in an escrow account with Clyde & Co, pending the final award. Tan also noted that the final award was made only days after the prosecution’s application was filed, but did not disclose the final payment.

The application comes after Malaysia levelled charges in February 2020 against Tarek, PSI director Patrick Mahony, and fugitive businessman Low Taek Jho (Jho Low) for engaging in a criminal conspiracy involving former prime minister Datuk Seri Najib Razak and 1MDB.

According to the charge sheet, the criminal conspiracy involved the commission of an offence by Najib, as in using his position as the then prime minister, finance minister and 1MDB advisory board chairman to seek gratification for himself, involving a monetary sum of RM60.63 million.

In September 2020, the the US Department of Justice (DOJ) filed a forfeiture application to seek US$300 million in additional assets allegedly associated with the multibillion-dollar 1MDB scandal, which it had traced to the escrow account in the UK.

The DOJ claimed that the funds in the account are traceable to a line of credit extended by PDVSA to PSOSL, in relation to the use of the two drill ships that PSI acquired with fraudulent funds obtained from 1MDB.

It was reported that PSI is contesting the DOJ’s forfeiture claim.