The stepson of Malaysian Prime Minister Najib Razak purchased a £23.25 million ($33.6 million) house in central London in 2012 using funds linked to 1Malaysia Development Bhd. (1MDB), according to sources familiar with the matter.
The redbrick, four-story home, built around 1900, is located in the exclusive Belgravia neighborhood, near Malaysia’s diplomatic mission. The registered owner is Qentas Holdings Ltd., a British Virgin Islands-based company, while Mr. Najib’s stepson is its beneficial owner.
Investigators believe 1MDB funds were used to acquire the property in July 2012. The Wall Street Journal previously reported that Riza Aziz, a film producer and Najib’s stepson, used money originating from 1MDB to buy $50 million worth of real estate in New York and Los Angeles and finance the 2013 movie The Wolf of Wall Street.
A spokesman for Mr. Aziz’s production company, Red Granite Pictures, stated the company is cooperating with inquiries, emphasizing that all business activities have been appropriate and have generated over $825 million in worldwide box-office revenues.
Investigators say funds used for the London and U.S. purchases were part of at least $238 million transferred to Mr. Aziz’s offshore company, Red Granite Capital, from another offshore entity, Aabar Investments PJS Ltd. The latter, which closely resembles an Abu Dhabi company 1MDB transacted with, received over $3.5 billion from 1MDB. However, Abu Dhabi’s International Petroleum Investment Co. (IPIC) has confirmed Aabar Investments PJS Ltd. is not part of its corporate structure.
Red Granite Capital received a $133 million tranche in June 2012, and the London property was acquired a month later without a mortgage, according to the U.K. Land Registry. Both Mr. Aziz and Mr. Najib have denied wrongdoing.
Najib promoted Malaysia as an “ideal partner” at a London investment conference on May 16, urging attendees to consider the “real story” about Malaysia. The Wall Street Journal has reported that more than $1 billion from 1MDB landed in Najib’s private accounts, some allegedly used for political spending and luxury purchases. Najib has maintained that $681 million was a legitimate donation from Saudi Arabia, most of which he returned. Malaysia’s attorney general cleared him of wrongdoing.
Founded in 2009 by Najib to boost the Malaysian economy with borrowed funds, 1MDB is under investigation by Malaysia and six other nations. Authorities suspect up to $6 billion was misappropriated. The Malaysian Ministry of Finance, which owns 1MDB, recently accepted the board’s resignation and dissolved its advisory board, which Najib chaired.
On May 12, just days before Najib’s speech, U.K. Prime Minister David Cameron hosted an anti-corruption summit condemning corrupt politicians who launder money through London’s property market. Cameron introduced a public register of property owners to expose illicit financial activities, noting that 44,000 London properties are owned by foreign entities.
“We want to clean up our property market and show there’s no home for the corrupt in Britain,” Cameron stated, adding, “When people steal money from your country and hide it in mine, we will expose them and return the money.”
In response to a Journal inquiry at the summit, Cameron acknowledged concerns over 1MDB but affirmed that business relations with Malaysia would continue. British officials, including Hugo Swire from the Foreign Office, supported the Malaysian investment conference, insisting it did not contradict the anti-corruption stance.
Lord Jonathan Marland, a former trade envoy, introduced Najib at the event, describing it as a “huge love-in” and praising Malaysia’s investment in London’s Battersea Power Station redevelopment. When questioned about 1MDB, Marland declined to comment on Malaysian internal affairs.
