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M/Y Equanimity Sale Permitted, Owner Charged

Aug 27th 18
By Aileen Mack

In February 2018, M/Y Equanimity was seized in Indonesia at the request of the U.S. Federal Bureau of Investigation. It was among the assets seized in an investigation regarding money allegedly stolen from a Malaysian government investment fund, 1 Malaysia Development Berhad (IMdb). Six months later, after much back and forth in court, the vessel is now up for sale. 


The New York Times reports that on August 24, Jho Low was charged with eight counts of laundering money, much of which was reportedly used to purchase Equanimity, a $250 million yacht. The Malaysian police issued arrest warrants for Low and his father, Low Hock Peng, who was charged with one count of money laundering.


Jho Low is accused of playing a key role in the theft of at least $4.5 billion from 1MDB, which was established and overseen by the former prime minister, Najib Razak, between 2009 and 2015. The eight charges accuse Low of laundering $450 million in stolen funds through bank accounts in Singapore, the U.S., the Cayman Islands, and Switzerland. His father was charged with transferring $56.4 million in stolen funds to an account controlled by his son. 


Each charge has a maximum fine of 5 million ringgit ($1.2 million), a jail term up to five years, or both, according to the Wall Street Journal. Singapore has separately charged him with money laundering and receiving stolen property.


Local news source The Straits Times reports that the court filings by 1MDB, its subsidiaries (1MDB Energy Holdings Limited and 1MDB Global Investment Limited), and the Malaysian government stated that “the ship was subject to physical deterioration, as it was exposed to the elements of sea and weather, and that it was in the interest of all parties that the vessel be sold as soon as possible to avoid further diminution of the value of the vessel.” 


The Admiralty Court in Kuala Lumpur, Malaysia, granted an application on August 24 for the government to sell the vessel without the presence of representatives from the yacht’s owner, according to Reuters.


Before the hearing, Equanimity (Cayman) Ltd., which claims ownership, said in a statement that it hadn’t received any “legally valid notice” of the application for the sale or the hearing.


“To move for a sale in Malaysia immediately would be a remarkable violation of due process and international legal comity, and would call into question the actual ownership of the yacht for a potential buyer,” the company said in the statement.


Once the vessel has been appraised, the government will put it up for sale by public tender, and the proceeds will be held by the court until it’s determined who should get the money.

 

UPDATE: 10/9/2018
Yacht broker Burgess has been appointed as the central broker for M/Y Equanimity. This decision follows the High Court of Malaya’s approval of the appointment of a broker and an appraiser on October 5, The Edge Market reports.

Lawyer Sitpah Selvaratnam, representing 1MDB, reportedly said that it hoped the vessel would go up for sale by the second week of November and be open to bids for about a month. She also stated that there weren’t any challenges filed to claim ownership of the vessel and Low had not appeared to challenge the sale, according to The Straits Times.

The appraiser based in the United Kingdom will begin evaluating Equanimity but the value will be confidential. She is currently docked at the Boustead Cruise Centre in Port Klang, where she has been since August 7.

 

UPDATE: 10/19/2018
One step closer to her story coming to a close — the High Court in Kuala Lumpur declared that M/Y Equanimity belongs to the Malaysian government with 1Malaysia Development Berhad as the beneficiary owner, along with its subsidiaries (1MDB Energy Holdings Limited and 1MDB Global Investment Limited) on October 19 when the registered owner failed to appear in court to claim the vessel, local media New Straits Times reports. The court ruled its decision was made because funds from 1MBD was used to purchase the vessel.

The government is now free to sell the superyacht without any legal restriction, The Straits Times reports. “The vessel’s registered owner — Equanimity of Cayman Islands — did not turn up to contest the suit and deny the claim by the government, 1MDB and its two subsidiaries, 1MDB Energy Holdings Limited and 1MDB Global Investment Limited,” said lawyer Sitpah Selvaratnam.

According to Malay Mail, this decision means that 1MDB will be able to collect the proceeds of the sale minus expenses when the sale is complete. Lawyer Jeremy M. Joseph and broker Burgess said that a judicial sale would provide buyers with a clean title to the vessel without any encumbrances.

 

UPDATE: 11/6/2018
M/Y Equanimity went up for auction on October 29 and the bidding process ends on November 28, Reuters reports. If the highest bid matches or exceeds the appraised value, then it will be accepted by the court, and the proceeds will be held for 90 days to give time for any potential claimants to come forward.


UPDATE: 4/2/2019

The March 31 fast-track sale deadline for the 91.5-meter M/Y Equanimity has passed without a buyer being found. Burgess and the lawyers representing the Malaysian government had placed Equanimity on a “fast-track” to sell before March 31.

Now the vessel’s sale and the process will be reassessed in court. Sitpah Selvaratnam, a lawyer representing the 1MDB fund, previously told Boat International: "At that stage, the court will want to see what’s happened, the progress, any recommendations and [consider] if we should change the strategy.”

The Malaysian government could choose not to sell and offer the yacht for charter, or they could simply renew the sale process, as Selvaratnam previously said.

Estimates place the Malaysian government’s expenses for the yacht's maintenance to be around 14.2 million Malaysian Ringgit, or about US$3.47 million, since she was seized in August 2018. 





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