Court of Appeal allows 1MDB to use Singaporean woman’s affidavit in bid to freeze Rosmah’s RM1.41b assets
PUTRAJAYA, Nov 12 — The Court of Appeal today allowed 1Malaysia Development Berhad (1MDB) and related companies to admit an affidavit by a Singaporean woman in support of their bid to freeze Datin Seri Rosmah Mansor’s assets in a lawsuit involving luxury goods worth more than US$346 million (RM1.41 billion).
The three-member bench comprising Datuk Dr Alwi Abdul Wahab, Datuk Ismail Berahim and Datuk Leonard David Shim unanimously allowed the appeal, setting aside the High Court’s decision, with costs of RM30,000.
Delivering the decision, Shim said the High Court had applied the wrong legal principle in rejecting the companies’ application to admit the affidavit by Shabnam Naraindas Daswani.
“After reviewing the appeal records, the High Court’s grounds of judgment, the memorandum of appeal and submissions from both parties, we unanimously find that the High Court judge had applied the wrong principle in dismissing the appellants’ application for leave.
“Therefore, the appeal is allowed, and the High Court’s decision is set aside,” he said.
The companies are seeking to freeze Rosmah’s assets over claims that she had acquired more than 12,000 luxury items, including jewellery, watches and handbags, using approximately US$346 million allegedly misappropriated from 1MDB.
Shim said the High Court had erred in finding that exceptional circumstances were required before the companies could be allowed to adduce the affidavit.
He said there was no provision under the Rules of Court requiring an applicant to establish exceptional circumstances when seeking an extension of time.
Shim said the court also found that the companies had filed their application on June 20 last year, before written submissions in the injunction proceedings were completed on July 18. The delay of about two-and-a-half months in preparing the affidavit had been satisfactorily explained.
According to the judge, Shabnam, who was initially named as the second defendant in the lawsuit, only agreed to provide her account after the companies discontinued their claim against her through a consent order on April 9, last year.
Her affidavit, comprising 319 pages across nine volumes, contained invoices, correspondence with luxury goods vendors, photographs and communications involving fugitive businessman Low Taek Jho, better known as Jho Low, and Eric Tan.
“These exhibits show the modus operandi of the massive global financial scheme facilitated by associates such as Jho Low and Eric Tan, who arranged payments through offshore entities using funds allegedly misappropriated from 1MDB.
“Allowing the affidavit would not cause substantial prejudice to Rosmah as she would be given sufficient time to examine and respond to its contents,” the judge said, adding that the affidavit was relevant to the companies’ claims and their applications for Mareva injunction.
On November 10 last year, the Kuala Lumpur High Court refused to grant leave for 1MDB and the related companies to rely on an affidavit by Shabnam in support of their bid for a Mareva injunction, an order to freeze Rosmah’s assets.
The suit was brought by 1MDB and 10 other companies, including five subsidiaries: 1MDB Energy Holdings Limited, 1MDB Energy Limited, 1MDB Energy (Langat) Limited, Global Diversified Investment Company Limited and SRC International Sdn Bhd.
The remaining plaintiffs are Affinity Equity International Partners Limited, Alsen Chance Holdings Limited, Blackrock Commodities (Global) Limited, Blackstone Asia Real Estate Partners Limited and Brightstone Jewellery Limited.
They sought a court order demanding that Rosmah pay US$346,010,489 or an amount deemed appropriate by the court. They also sought declarations that the first to sixth plaintiffs hold rightful ownership of the luxury items, which are purportedly in Rosmah’s possession.
The lawsuit initially named Rosmah and Shabnam as the first and second defendants. However, in April last year, 1MDB and the other companies withdrew their lawsuit against Shabnam.
The High Court had previously fixed January 7 next year to hear the Mareva injunction application.
