NEW YORK: A unit of Malaysia’s state-owned investment fund 1Malaysia Development Bhd (1MDB) – which has spurred investigations around the world into deal-making and political patronage under former prime minister Datuk Seri Najib Razak – is seeking bankruptcy protection in the United States.
Brazen Sky Ltd, which is fully owned by 1MDB, filed for Chapter 15 in the Southern District of Florida court, according to a filing.
The document listed voluntary liquidation pending in the British Virgin Islands, where Brazen Sky is incorporated. Debtors may seek orders under Chapter 15 in the United States to have foreign proceedings enforced there.
The development comes just days after Najib was imprisoned for 12 years, following Malaysia’s top court upholding a 2020 conviction for corruption in relation to 1MDB, from which billions were siphoned.
According to a US indictment, a small coterie of Malaysians, led by businessman Low Taek Jho (known as Jho Low), diverted money from 1MDB into personal accounts disguised to look like legitimate businesses, and kicked back some of those funds to officials.
Officials at 1MDB and others were alleged to have engaged in fraudulent conduct to conceal an overvaluation of Brazen Sky assets, which itself was used to conceal the diversion of more than US$1bil from a 1MDB investment, a US court filing in 2020 showed. – Bloomberg