How Jho Low, Wanted For History’s Biggest Heist, Parked His Money at an Obscure, Kuwaiti-Owned Bank
28 Oct 2019

As Jho Low was becoming the public face of an embattled Malaysian sovereign wealth fund known as 1MDB, the financier made friends in high places. He dined with Leonardo di Caprio, bought diamonds for supermodel Miranda Kerr, and even financed the film production company that made the “Wolf of Wall Street.” He went into business with Gulf royals and real estate moguls from Abu Dhabi. Low’s high-flying ways even brought him into alleged criminal conspiracies with an American rapper and landed him on the receiving end of a Justice Department indictment for laundering billions. Some of the business deals, prosecutors said, were part of an expansive effort to launder misappropriated public funds.

Along the way, Low found an ally in Sheikh Sabah Jaber al-Mubarak al-Hamad al-Sabah, a well-connected member of Kuwait’s royal family.

Sabah, who is 56 years old, has a business degree from California State University. He manages more than 30 companies worth around $200 million, according to Bloomberg. In Kuwait, he keeps a relatively low profile. But on the Comoro Islands, an archipelago nation in the Indian Ocean, Sabah is a big deal. When he visits the capital, Moroni, newspapers put him on the cover. When he promises closer diplomatic ties and greater foreign investment, Comorian officials rejoice. Though he’s not involved in politics back home, he’s received — and acts — like a diplomatic envoy because of his family’s position in Kuwait. On a trip to the islands in December 2017, he met the country’s president and pledged to renew his commitments to supporting the Comorian economy.

Sabah had other reasons to travel to Comoros that winter: The Banque Fédérale de Commerce, a small commercial bank that he chaired and owned in full, had been giving him a headache for almost two years.

According to the bank’s former general manager, a Lebanese man named Amine Halawi, Sabah helped Low and Tan Kim Loong — a frequent associate of Low’s, also known as Eric Tan or “Fat Eric” — open offshore accounts at the Banque Fédérale de Commerce in the summer of 2016. To bypass rules prohibiting business from nonresidents, the sheikh wrote a letter to the Banque Fédérale de Commerce authorizing the transaction as the chair of the bank’s board. Halawi passed on the request to the Comorian Central Bank, but the bank did not issue its denial until August 15 of that year, well after the accounts were established.

Sabah gave these orders after Singapore, Switzerland, and the U.S. began investigating Low’s role in an alleged global corruption scandal that resulted in former Malaysian Prime Minister Najib Razak being charged with three counts of “criminal breach of trust” and one count of “corruption.”

Concerned that something was amiss and worried that he’d be caught up in a mess far above his pay grade, Halawi insisted time and time again that the sheikh take full responsibility for compliance matters related to those accounts. But when news of Low’s activities finally got out, Sabah was not the one answering questions. Instead, it was Halawi who caught the blame: In September 2017, he was arrested, charged with aiding and abetting money laundering, and in October, he was sentenced to three years in prison in the Comoros and fined a million euros, or $1.2 million.

Halawi lodged an appeal to his sentence in 2018; the fine was lifted, and his sentence was reduced to time served. Halawi was released from prison, only to be thrown out of the country immediately.

Now a free man back in his native Lebanon, Halawi is telling his side of the story. His account is a window into a small but significant piece of the 1MDB scandal that illustrates the lengths to which the global ultrarich will go to help each other out, and the desperate routes that hot money will take when it has nowhere left to hide.

Comoros, a former colony that gained independence from France in 1974, is not an obvious place for a playboy to park his money. It’s one of the poorest countries in the world, where electricity is prone to cutting out unexpectedly. The roads are bumpy and mostly unpaved, and the islands have only a small handful of ATMs.

Still, because of its remote location and small, pliable political class, the archipelago has provided opportunities for enterprising types operating on the fringes of the financial system over the years. During the apartheid era, for instance, Comoros was a hub for gunrunners working for sanctioned South Africans.

Doing business on the islands isn’t for the squeamish: For almost two decades, French mercenaries all but ran the Comoros, which makes many Comorians understandably suspicious of foreigners to this day. After their ouster, a series of coups d’état won the islands a reputation for danger and instability. The result has been a country that is not a haven for cash, like the nearby Seychelles, but a destination for ambitious gamblers and financial adventurism.

Sabah’s dealings in the Comoros began in the mid-2000s. By that time, the islands had called free elections and its residents were living in relative stability. The sheikh arrived under the wing of Bashar Kiwan, a French-Syrian businessman with whom he runs Al Waseet International, a publishing and media company. With his business savvy, perfect French, and easy charisma — along with the sheikh’s good name — Kiwan was able to pitch the Comorian government on an ambitious plan to transform the islands into the new Dubai. He and his associates proposed sprucing up an old hotel; building resorts, roads and infrastructure; and marketing the islands to tourists abroad.

With Sabah by his side for credibility — it never hurts to have royalty on board — Kiwan pledged to raise capital on his own, but he also talked lawmakers into selling more than 40,000 Comorian passports to the government of the United Arab Emirates. The UAE used the passports to document stateless residents to whom it has repeatedly denied the right to Emirati citizenship. (Kuwait, which has a large stateless population, entertained such a scheme, but despite public support from high-ranking officials, the plans went nowhere.)

Known as the “economic citizenship” program, the deal was due to net the Comoros $200 million, much of it earmarked to give Kiwan and Sabah’s local firm, Comoro Gulf Holdings, contracts to build infrastructure that the islands still desperately needs.

Kiwan also opened a bank. He incorporated the Banque Fédérale de Commerce in 2006 and, by 2009, he’d obtained a banking license and capitalized the institution with just shy of 10 million euros transferred directly from various Kiwan and Al Waseet International-linked accounts, records show. Over the years, a combination of changes in political leadership and personal relationships gone sour all but exiled Kiwan from the Comoros, but he remained on the bank’s board through 2016 and was copied on high-level internal email exchanges well into 2017. An Al Waseet secretary answered queries from the bank on behalf of Kiwan, who in turn acted as an intermediary for Sabah.

Along the way, Kiwan’s role with the bank diminished and he was eventually no longer involved: According to ownership records, by 2010, he was fully divested. Sabah had taken over: The sheikh, who in 2008 owned just 25 percent of the Banque Fédérale de Commerce, became the bank’s sole shareholder.

By Atossa Araxia Abrahamian, The Intercept, 26 October 2019

Read more at The Intercept

Photo (cropped): Woodlouse [CC BY-SA 2.0], via Wikimedia Commons

RiskScreen: Eliminating Financial Crime with Smart Technology

Count this content towards your CPD minutes, by signing up to our CPD Wallet

FREE CPD Wallet