Malaysia 1MDB Scandal: Hong Kong Firm Run By Najib Razak’s Aide Jho Low Made $150 Million Investment In Electrum, Report Says

Jho Low, a close associate of Malaysian Prime Minister Najib Razak, invested $150 million in Electrum Group LLC, raising concerns that the ongoing investigation into the Malaysian state-run fund’s corruption allegations would affect the New York-based firm, as well as other Wall Street firms, according to the Wall Street Journal.

The Justice Department’s complaint filed late last month alleged that Low “laundered more than $400 million of funds” from 1Malaysia Development Berhad (1MDB) that is marred by the corruption and fraud scandal, the Journal reported Tuesday. The filing also said that Jynwel Capital Ltd., a Hong Kong-based investment firm run by Low, made the $150 million investment at Electrum in late 2012.

According to the Journal, Electrum’s chairman and chief investment officer Thomas Kaplan has not yet been questioned by officials and there are no indications that he believed the money came from any source other than Low and Jynwel.

“We have been monitoring this situation since the initial news reports,” a spokesman for Electrum told the Journal. “Accordingly, Electrum has taken steps to ensure that Jynwel’s investment and its associated profits have been safeguarded and sequestered while the matter is pending.”

Electrum reportedly said that Jynwel bought a 7 percent stake in the firm with the investment.

In April, the Journal reported that Low spent lavishly and bought multimillion-dollar homes in New York and Los Angeles using shell companies, and then sold them to a company controlled by Najib’s stepson Riza Aziz. In 2013, Low purchased a 7,718-square foot penthouse in Singapore for over $30 million and a smaller apartment in the same complex, real estate documents reportedly showed.

However, last month, the U.S. moved to confiscate luxury properties across affluent areas of New York and California as part of the 1MDB investigation. Most of the properties have been linked to Low and Riza.

The Justice Department said that over $3.5 billion was misappropriated from 1MDB in alleged fraud committed over a four-year period. The department added that it is seeking to seize more than $1 billion of assets linked to the fund.

Najib had established 1MDB in 2009 to boost economic growth in Malaysia. However, the fund has been linked to the corruption scandal, in which $681 million belonging to 1MDB was traced to bank accounts allegedly owned by Najib. The prime minister has consistently denied the corruption allegations, first made in a July 2015 report by the Journal, which said that investigators tracked the money from an account at Falcon Private Bank in Singapore to accounts in Malaysia.