IPIC denies links with Aabar BVI

PETALING JAYA: Abu Dhabi’s state-owned International Petroleum Investment Company (IPIC) has denied its ownership of British Virgin Islands-incorporated Aabar Investments PJS Ltd (Aabar BVI), a company that 1Malaysia Development Bhd (1MDB) deposited US$1.4 billion (RM5.4 billion) to back in 2012.
IPIC also said in its filing with the London Stock Exchange that public reports show that Aabar BVI was wound up and dissolved in June 2015.
According to 1MDB’s accounts for the financial year ended March 31, 2014, Aabar BVI holds RM4.89 billion of its deposits.
In response to the denial by IPIC, 1MDB reiterated that the substantial sums paid to Aabar BVI were clearly recorded in publicly available and audited 1MDB’s financial statements dated March 31, 2013 and 2014.
“Further, the amounts paid have been subject of much commentary, starting from 2013 right up to the present. Accordingly, 1MDB finds it curious that IPIC and Aabar have waited until April 2016 to issue such a statement,” the state-owned fund said.
1MDB noted that the company records show documentary evidence of the ownership of Aabar BVI and of each payment made, pursuant to various legal agreements that were negotiated with Khadem Al Qubaisi in his capacity as managing director of IPIC and chairman of Aabar and/or with Mohamed Badawy Al Husseiny, in his capacity as CEO of Aabar.
“It is, therefore, a surprising claim that neither IPIC nor Aabar have knowledge of, nor have benefited from, payments made by 1MDB to Aabar BVI,” it said.
Nonetheless, IPIC said both IPIC and its unit Aabar Investment PJS confirmed that Aabar BVI was not an entity within either corporate group, which caught the market by surprise.
“Further, both IPIC and Aabar confirm that neither has received any payments from Aabar BVI nor has IPIC or Aabar assumed any liabilities on behalf of Aabar BVI,” it explained, noting that the confirmation is reflected in each relevant accounting period by the audited financial statements of the IPIC Group.
Worth noting is that the US$1.4 billion payment made by 1MDB to Aabar BVI was without the approval of the board of directors, according to the Public Accounts Committee report released last Thursday. The money was pledged as collateral with IPIC in exchange for a guarantee for a US$3.5 billion bond issued by 1MDB to fund the purchase of the power plant assets.
In June 2015 a binding term sheet saw IPIC assume obligation for a US$3.5 billion bond principal and interest, currently held by 1MDB, and a US$1 billion cash payment made by IPIC to 1MDB.