Sarawak Report has obtained yet more sensational documents, which lay bare even futher the deceit of 1MDB’s management over the PetroSaudi deal.

They also expose the total weakness of the Board of Directors, revealed as a mere rubber stamp for the actual sole decision-maker of the company, the Finance Minister Najib Razak.

We have obtained more Board Minutes, till now kept secret, which show that 1MDB Board members resolved to exact an equal cash input from PetroSaudi into the joint venture deal, in order to match the billion dollars that Malaysia had agreed to contribute for just 40% of the shareholding.

However, in the event this demand was simply ignored by management, which accepted PetroSaudi’s injection of bogus assets instead just a few days later.

Worse, the management of 1MDB are exposed for having blatantly LIED to anxious Board Members over the identity of the owner of PetroSaudi, just ten days before the deal went ahead.

Owned by King Abdullah!

Minutes of a Special Meeting of the Board held on 18th September 2009 (just ten days before the joint venture was signed on 29th) show that 1MDB’s Executive Director, Casey Tang, point blank lied to Directors, by saying that the personal owner of PetroSaudi was none other than the then King Abdullah of Saudi Arabia!

“Casey clarified that PetroSaudi is ultimately owned by King Abdullah and the Kingdom of Saudi Arabia”

the minutes record with breath-taking clarity.

Sarawak Report assumes that Arul Kanda will to own up to the authenticity of these minutes, as he has with other minutes which we have printed, because he knows the information is widely circulated, despite having been vigorously suppressed by his boss the Prime Minister.

What it means it that Casey Tang told a bare-faced lie to his Board.

All the evidence available about PetroSaudi confirms that this was an entirely private company with a very limited capital base, which was one of a set of shell ventures set up by a youthful Prince Turki and his pal Tarek Obaid in the hope of cashing in on their royal connections.

Sarawak Report has long since documented the changing profile of PetroSaudi and the fact that it relied for years on a mailbox address and a borrowed phone and fax number off other buddy, none other than Xavier Justo, based in Geneva at a company called Fininfor.

But, don’t take this information just from Sarawak Report, take it from Tarek’s own brother Nawaf, who was a key connection for these chancers back in Saudi Arabia, where he maintained a job as a political advisor.

When Tarek sent him the planned press release about the 1MDB PetroSaudi joint venture the day before it was published on 29th September 2009, Nawaf emailed him back:

“You have to say it is private” cautioned Nawaf, “as the Malaysians say their company is government!”

In other words, there is no way that that PetroSaudi was “ultimately owned by King Abdullah and the Kingdom of Saudi Arabia” nor that this was a ‘state to state’ venture – and Tarek’s own brother was cautioning him that it must not be implied that it was.

Tarek took his brother’s hint.

We can see from the records that he carefully altered the press release the next day, adding three words to acknowledge the company was indeed private, while still implying it was “mandated” by the State of Saudi Arabia”.

We can see that:

“PSI, based in Al-Khobar, Saudi Arabia, is mandated to carry out investments which can strengthen the relationships between the Kingdom of Saudi Arabia and key countries worldwide.”

was changed to:

“PSI, based in Al-Khobar, Saudi Arabia, is a private company mandated to carry out investments which can strengthen the relationships between the Kingdom of Saudi Arabia and key countries worldwide.”

This evidence alone makes it perfectly clear why a wanted notice was issued earlier this year by Malaysian Bank Negara investigators for none other than the said Casey Tang, who had so blatantly mislead the Board.

Sarawak Report has already published numerous emails from the PetroSaudi data base, into which Mr Casey Tang was copied as a key member of the evident conspiracy to mislead and defraud the Bank of Malaysia and the Board Members of 1MDB into sending a total of US$1.83 billion dollars out of the country and into the bank accounts of Jho Low and his conspirators from PetroSaudi.

The current 1MDB chief, Arul Kanda, has attempted to imply these documents have been forged or “possibly doctored” by Sarawak Report, so he should show us the evidence and take us to court (something he has consistently feared to do).

Board demanded PSI contribute cash as well as alleged assets

Another jaw-dropping revelation comes out of these minutes of the meeting just days before signing the lightning deal to relieve the Malaysian public of a billion dollars of expensive public borrowings.

1MDB’s Board Members had by this stage clearly understood that (contrary to what was being said publicly) PetroSaudi was planning not to inject cash, but only some alleged assets into the deal.

These Directors, who till recently had been presented as being in charge of decisions at 1MDB were plainly not happy at the prospect, for understandable reasons, given that Malaysia was injecting all the working capital and only gaining 40% of the joint venture company.

Such an arrangement was unsatisfactory the Directors are recorded as having unanimously agreed in these minutes. They demanded that if the deal was to proceed then PetroSaudi also would have to inject at LEAST a billion also in cash!

As the world now knows, this never happened. Yet, although PetroSaudi did not inject a bent ringgit into the deal, it nevertheless went full steam ahead to be signed a few days later.

In fact, not only did PetroSaudi not contribute cash, it did the opposite.

The useless (or complicit?) Directors at the fund allowed the fraudsters to issue a fictitious paper loan for a whopping US$700 million into the proceedings, which they then demanded be repaid three days later in real cash by 1MDB on the day of the signing of the deal.

Casey Tang and Shahrol Halmi blithely agreed to this breath-taking demand, as if they were paying for a cup of coffee and soon after Casey was asking for suitable suggestions for a great place for the team to all have a post-deal meeting with plenty of rest and recreation!

So, not only did PetroSaudi avoid paying their equal share of the investment, they whipped out the lion’s share of Malaysia’s investment on Day One – allowing it to be diverted, of course, into an account belonging to the Prime Minister’s own representative and official Advisor Jho Low.

How was it that this was sanctioned or allowed to go ahead in defiance of the Board resolution?

Indeed, the Chairman it is well-known resigned the moment he found out what had happened a few days later.

However, no one was complaining within 1MDB and crucially, the Finance Minister, whom we all now know was secretly the only ultimate decision-maker at the fund, appears to have been entirely content with the situation and with the disappearance of US$700 million into an account owned by his young advisor Jho Low.

Indeed, as correspondence from PetroSaudi, again between Tarek and his older brother, makes clear, the Prime Minister was still sponsoring press statements that implied that PetroSaudi HAD injected cash:

Either the Prime Minister was knowingly lying in making this statement or he was horribly deceived by his management at 1MDB.  If he was deceived the world has to ask why he has not been pursuing these criminals rather than doing everything possible to close down criticism and close down all investigations into the non-appearance of promised money from PetroSaudi and the disappearance of the lion’s share of 1MDB’s money instead?!

This PetroSaudi deal was, as we now know, the first of several sums that disappeared from 1MDB in a similar fashion over subsequent years, each of which was orchestrated by Jho Low, who has simultaneously managed the Prime Minister’s private business, right down to paying for his wife Rosmah’s diamond purchases in Hong Kong.

At what point is Mr Arul Kanda going to give up lying that all was done properly and with due diligence at 1MDB and admit that this has been one of the biggest single thefts of the millennium so far?