In September 2009, the financier Jho Low, who is now an international fugitive, flew into London for what seemed the deal of a lifetime.
He was brokering a $1.8bn agreement between the international energy company PetroSaudi and 1MDB, a Malaysia state development fund. It was a transaction being put together at speed, with the playboy financier firing off one email to associates saying: “We need to move fast.”
The deal confirmed the Malaysian financier’s position in the ranks of the super-rich. He was well known at the clubs and gambling tables of New York and Las Vegas, celebrated his 28th birthday with an extravagant pool party surrounded by caged lions and tigers, and regularly mixed with celebrities, including Leonardo DiCaprio and socialite Paris Hilton.
Global investigations have since alleged the 1MDB-PetroSaudi joint venture was part of one of the world’s biggest frauds involving the pilfering of the state fund. The former Malaysian prime minister Najib Razak has been jailed for his role in misappropriating money, while the American investment bank Goldman Sachs paid a £2.3bn settlement after claims it misled investors while raising billions of dollars for the fund.
But London’s involvement in this scandal has largely escaped scrutiny. Now the Malaysian Anti-Corruption Commission (Macc) has confirmed that the UK offices of the international law firm White & Case, which was involved in the deal, are under investigation. The firm represented PetroSaudi and facilitated the joint venture – brokered in the background by Low – between the energy company and 1MDB.
Azam bin Baki, chief commissioner of Macc, said the investigation was focused on documents allegedly drawn up for the deal suspected to contain “false or misleading information”. He told The Observer: “Macc is also examining payments made to the firm that are believed to involve funds directly linked to the alleged misappropriation of 1MDB assets.”
White & Case already faces a $1.8bn claim filed by 1MDB in the Malaysian courts in 2024 that alleges the firm knew the joint venture was a “sham”. It rejected the allegations as baseless, but declined to answer questions in advance of any court hearing about the checks it conducted on the joint venture and whether it might have failed in its duties.
The Observer has also previously revealed the law firm is under investigation in the UK by the Solicitors Regulation Authority. White & Case says it acted with the highest and professional ethical standards during its involvement with the joint venture.
In September 2009, White & Case sent out documents for the joint venture to IMDB representatives that noted $700m from the state fund would be transferred to a RBS Coutts bank account that it was claimed was in the name of PetroSaudi. In reality, this account was in the name of a Seychelles-based company called Good Star, which was controlled by Low and used for his personal spending.
While White & Case does not appear to have spotted any red flags over the deal, the Swiss bank BSI refused to open an account for the joint venture, with one banker noting: “I don’t like the transaction at all!”
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The banker also said he considered the involvement of Low – who had no official role with 1MDB or PetroSaudi – as “very suspicious”.
White & Case has not commented on what it knew about Low’s involvement in the venture.
The agreed deal fuelled an extravagant spending spree by the financier, funded largely by monies from the Good Star account. Funds from the account were transferred into various bank accounts in Los Angeles and used to finance the production of the film The Wolf of Wall Street, starring DiCaprio.
Low gave the actor a Picasso painting worth $3.28m for his birthday. He also gifted the Australian supermodel Miranda Kerr a see-through grand piano.
The Good Star account was used to buy property in New York and London, including a £17m townhouse in Belgravia. About $35.4m from the same account was also used to buy a Bombardier private jet.
The Malaysian authorities filed charges against Low in 2018 over the scandal, with a warrant issued for his arrest. He has maintained his innocence and is still at large.
In August 2024, a Swiss court sentenced two former PetroSaudi executives, Tarek Obaid, the ex-chief executive, and director Patrick Mahony, for their role in setting up the alleged fake joint venture in what was described as the “scam of the century”. Both men are appealing.
In December last year, Najib Razak was jailed for 15 years for abuse of power and money laundering in his second big trial involving the scandal in Malaysia.
Clare Rewcastle Brown, the journalist who uncovered the scandal, said the UK authorities had for years failed to investigate the role played by British bankers and lawyers. “The first action I took when I found out about this fraud was to contact the Serious Fraud Office,” she said. “We should have been initiating the investigations and nothing happened.”
White & Case said: “We are not aware of any criminal investigation into White & Case and we strenuously deny any allegations of criminality regarding this matter. We strongly refute any suggestion that White & Case acted in any way inconsistent with the highest ethical and professional standards. We are vigorously defending our firm against the allegations in the complaint and we are confident that we will be vindicated.”
Photographs by Bertrand Rindoff Petroff/Chris Jung/Getty Images