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Swiss court convicts 2 executives for embezzling S$1.8 billion from 1MDB

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SWITZERLAND: On Wednesday (28 August), the Swiss Federal Criminal Court convicted two top executives involved in one of the world’s largest financial scandals, linked to 1Malaysia Development Bhd (1MDB).

As reported by Swiss local media, Saudi-Swiss businessman Tarek Obaid and his Swiss-British business partner, Patrick Mahony, were found guilty of embezzling over US$1.8 billion from the sovereign wealth fund.

The court, located in the southern Swiss city of Bellinzona, sentenced Obaid to seven years in prison and Mahony to six years.

The differing sentences reflected the extent to which each had enriched themselves, with Obaid receiving at least US$805 million and Mahony US$37 million.

“The court took into account the very high amounts involved, the intensity of the criminal activity, (and) the selfish motive,” it said.

Both men were convicted of fraud, criminal mismanagement, and money laundering.

Additionally, they were ordered to repay more than US$1.75 billion to 1MDB.

Prosecutors outlined a complex scheme orchestrated by Obaid and Mahony in collaboration with fugitive Malaysian financier Jho Low, an advisor to former Malaysian Prime Minister Najib Razak, who is currently serving a prison sentence for his role in the broader 1MDB scandal.

The fraudulent activities centered around PetroSaudi, a company the two men established to create the impression of a joint venture with 1MDB, backed by the Saudi government—an impression that was entirely false.

According to the indictment, the accused misled 1MDB’s board of directors in 2009 into believing that PetroSaudi would contribute significant oil assets to the joint venture.

Using this deception, they initially extracted US$1 billion from 1MDB to purchase a stake in the venture. Subsequently, between 2010 and 2011, they secured an additional US$830 million from the fund through an Islamic loan linked to their partnership.

Prosecutors revealed that between September 2009 and July 2015, Obaid and Mahony laundered the embezzled funds through Swiss bank accounts, which were used to purchase real estate in Switzerland and London, jewelry, private equity, and to maintain a lavish lifestyle.

The stolen funds also fueled the development of PetroSaudi, from which the duo continued to draw significant income.

The case is a pivotal moment in the international efforts to recover the estimated US$4.5 billion siphoned from 1MDB, with the involvement of high-profile figures, including Najib Razak and employees of Goldman Sachs.

Despite the convictions, both men have denied any wrongdoing.

Obaid’s lawyer, Daniel Zappelli, announced that his client had already filed an appeal against the verdict, arguing that the court had overlooked crucial factual and legal arguments presented in Obaid’s defense.

Meanwhile, 1MDB, which is actively working to recover its stolen assets, welcomed the court’s decision.

“We welcome today’s verdict … which means that Patrick Mahony and Tarek Obaid will face justice for their role in embezzling and defrauding the people of Malaysia,” a spokesperson said.

1MDB scandal led to the downfall of the Najib-led Barisan National Govt in 2018

The sprawling 1MDB financial scandal has spurred criminal investigations worldwide, with probes underway in the United States, Switzerland, and Singapore.

Billions of dollars are alleged to have been siphoned from the fund, officially known as 1Malaysia Development Berhad, by multiple individuals, funding extravagant purchases from artwork to a luxury yacht.

Najib has been imprisoned since 23 August 2022, following the Federal Court’s confirmation of his convictions for criminal breach of trust, abuse of power, and money laundering related to the misappropriation of SRC International Sdn Bhd’s funds, accompanied by an RM210 million (approximately US$44.5 million) fine.

On 2 February, the Pardon’s Board reduced Najib’s sentence from 12 to six years for misappropriating funds amounting to RM50 million (approximately US$10.6 million), potentially enabling his release on 23 August 2028.

Najib is also the former president of UMNO, having led both the party and the ruling coalition Barisan Nasional.

However, he faced defeat in the 2018 Malaysian General Election primarily due to the 1MDB scandal.

The post Swiss court convicts 2 executives for embezzling S$1.8 billion from 1MDB appeared first on Gutzy Asia.

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Reforming Singapore’s defamation laws: Preventing legal weapons against free speech

Opinion: The tragic suicide of Geno Ong, linked to the financial stress from a defamation lawsuit, raises a critical issue: Singapore’s defamation laws need reform. These laws must not be weaponized to silence individuals.

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by Alexandar Chia

This week, we hear the tragic story of the suicide of Geno Ong, with Ong citing the financial stress from the defamation lawsuit against her by Raymond Ng and Iris Koh.

Regardless of who’s right and who’s wrong, this Koh/Ng vs Ong affair raises a wider question at play – the issue of Singapore’s defamation laws and how it needs to be tightened.

Why is this needed? This is because defamation suits cannot be weaponised the way they have been in Singapore law. It cannot be used to threaten people into “shutting up”.

Article 14(2)(a) of the Constitution may permit laws to be passed to restrict free speech in the area of defamation, but it does not remove the fact that Article 14(1)(a) is still law, and it permits freedom of speech.

As such, although Article 14(2)(a) allows restrictions to be placed on freedom of speech with regard to the issue of defamation, it must not be to the extent where Article 14(1)(a)’s rights and liberties are not curtailed completely or heavily infringed on.

Sadly, that is the case with regard to precedence in defamation suits.

Let’s have a look at the defamation suit then-PM Goh Chok Tong filed against Dr Chee Soon Juan after GE 2001 for questions Dr Chee asked publicly about a $17 billion loan made to Suharto.

If we look at point 12 of the above link, in the “lawyer’s letter” sent to Dr Chee, Goh’s case of himself being defamed centred on lines Dr Chee used in his question, such as “you can run but you can’t hide”, and “did he not tell you about the $17 billion loan”?

In the West, such lines of questioning are easily understood at worse as hyperbolically figurative expressions with the gist of the meaning behind such questioning on why the loan to Suharto was made.

Unfortunately, Singapore’s defamation laws saw Dr Chee’s actions of imputing ill motives on Goh, when in the West, it is expected of incumbents to take the kind of questions Dr Chee asked, and such questions asked of incumbent office holders are not uncommon.

And the law permits pretty flimsy reasons such as “withdrawal of allegations” to be used as a deciding factor if a statement is defamatory or not – this is as per points 66-69 of the judgement.

This is not to imply or impute ill intent on Singapore courts. Rather, it shows how defamation laws in Singapore needs to be tightened, to ensure that a possible future scenario where it is weaponised as a “shut-up tool”, occurs.

These are how I suggest it is to be done –

  1. The law has to make mandatory, that for a case to go into a full lawsuit, there has to be a 3-round exchange of talking points and two attempts at legal mediation.
  2. Summary judgment should be banned from defamation suits, unless if one party fails to adduce evidence or a defence.
  3. A statement is to be proven false, hence, defamatory, if there is strictly material along with circumstantial evidence showing that the statement is false. Apologies and related should not be used as main determinants, given how many of these statements are made in the heat of the moment, from the natural feelings of threat and intimidation from a defamation suit.
  4. A question should only be considered defamatory if it has been repeated, after material facts of evidence are produced showing, beyond reasonable doubt, that the message behind the question, is “not so”, and if there is a directly mentioned subject in the question. For example, if an Opposition MP, Mr A, was found to be poisoned with a banned substance, and I ask openly on how Mr A got access to that substance, given that its banned, I can’t be found to have “defamed the government” with the question as 1) the government was not mentioned directly and 2) if the government has not produced material evidence that they indeed had no role in the poisoning affair, if they were directly mentioned.
  5. Damages should be tiered, with these tiers coded into the Defamation Act – the highest quantum of damages (i.e. those of a six-figured nature) is only to be reserved if the subject of defamation lost any form of office, revenue or position, or directly quantifiable public standing, or was subjected to criminal action, because of the act of defamation. If none of such occur, the maximum amount of damages a plaintiff in a defamation can claim is a 4-figure amount capped at $2000. This will prevent rich and powerful figures from using defamation suits and 6-figure damages to intimidate their questioners and detractors.
  6. All defendants of defamation suit should be allowed full access to legal aid schemes.

Again, this piece does not suggest bad-faith malpractice by the courts in Singapore. Rather, it is to suggest how to tighten up defamation laws to avoid it being used as the silencing hatchet.

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Man arrested for alleged housebreaking and theft of mobile phones in Yishun

A 23-year-old man was arrested for allegedly breaking into a Yishun Ring Road rental flat and stealing eight mobile phones worth S$3,400 from five tenants. The Singapore Police responded swiftly on 1 September, identifying and apprehending the suspect on the same day. The man has been charged with housebreaking, which carries a potential 10-year jail term.

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SINGAPORE: A 23-year-old man has been arrested for allegedly breaking into a rental flat along Yishun Ring Road and stealing eight mobile phones from five tenants.

The incident occurred in the early hours on Sunday (1 September), according to a statement from the Singapore Police Force.

The authorities reported that they received a call for assistance at around 5 a.m. on that day.

Officers from the Woodlands Police Division quickly responded and, through ground enquiries and police camera footage, were able to identify and apprehend the suspect on the same day.

The stolen mobile phones, with an estimated total value of approximately S$3,400, were recovered hidden under a nearby bin.

The suspect was charged in court on Monday with housebreaking with the intent to commit theft.

If convicted, he could face a jail term of up to 10 years and a fine.

In light of this incident, the police have advised property owners to take precautions to prevent similar crimes.

They recommend securing all doors, windows, and other openings with good quality grilles and padlocks when leaving premises unattended, even for short periods.

The installation of burglar alarms, motion sensor lights, and CCTV cameras to cover access points is also advised. Additionally, residents are urged to avoid keeping large sums of cash and valuables in their homes.

The investigation is ongoing.

Last month, police disclosed that a recent uptick in housebreaking incidents in private residential estates across Singapore has been traced to foreign syndicates, primarily involving Chinese nationals.

Preliminary investigations indicate that these syndicates operate in small groups, targeting homes by scaling perimeter walls or fences.

The suspects are believed to be transient travelers who enter Singapore on Social Visit Passes, typically just a day or two before committing the crimes.

Before this recent surge in break-ins, housebreaking cases were on the decline, with 59 reported in the first half of this year compared to 70 during the same period last year.

However, between 1 June and 4 August 2024, there were 10 reported housebreaking incidents, predominantly in private estates around the Rail Corridor and Bukit Timah Road.

The SPF has intensified efforts to engage residents near high-risk areas by distributing crime prevention advisories, erecting alert signs, and training them to patrol their neighborhoods, leading to an increase in reports of suspicious activity.

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