COLUMN | Good journalism, bad journalism: Malaysian fugitive Jho Low and 1MDB scandal; ex-Sinopacific Chair Simon Liang's legal troubles [Offshore Accounts]

At its best, investigative journalism breaks news that even law enforcement agencies are not able to tackle, solving longstanding mysteries and exposing wrongdoing.

At its worst, journalists run so-called “puff pieces” pandering to the rich and famous, serving up public relations spin disguised as news.

This week, we have the good, the bad, and the ugly of journalism on display, with stories connected to China, two tales which shine light on law enforcement, and the lack of law enforcement, in the world’s second largest economy, and the world’s largest shipbuilding nation.

And we start with more details on the whereabouts and new identity of a corrupt international fugitive who plundered Malaysia and stole billions of dollars…

The net tightens on Jho Low as dominoes fall

Long before The Wall Street Journal was publishing sensational tales of Donald Trump’s relationship with disgraced financier and convicted sex criminal Jeffrey Epstein, its correspondents Tom Wright and Bradley Hope had worked hard exposing how billions of dollars were systematically stolen from the Malaysia’s sovereign wealth fund 1MDB, with the connivance of the country's then-Prime Minister Najib Razak.

In 2018, they published a book documenting all the criminality they had helped uncover, entitled Billion Dollar Whale: The Man Who Fooled Wall Street, Hollywood, and the World.

Mr Najib was convicted of embezzlement in 2020, and his wife Rosmah Mansor was found guilty for her role in the money laundering and misappropriation of funds in 2022.

In 2024, two Geneva-based gentlemen were convicted by a Swiss federal court of their role in the plunder, which the federal prosecutor described as, “the fraud of the century.” Tarek Obaid and Patrick Mahony were ordered to repay US$2 billion to the Malaysian state, as we reported, plus interest.

Just this May, the former Goldman Sachs banker Tim Leissner was sentenced to two years in prison in the USA for his role in the 1MDB scandal after he pleaded guilty to helping divert billions in Malaysian funds raised in a bond issue to bank accounts controlled by co-conspirators and pocketing US$60 million himself.

The judge who sentenced him said that the 1MDB case was an example of, “brazen corruption at the highest level of government in multiple countries.” Mr Leissner’s then employer, Goldman Sachs, had to pay over US$5 billion in fines and reparations for its role in facilitating the bond issues, where many of the funds raised were immediately stolen.

But one character remained on the run, totally unpunished for the scheme he is believed to have masterminded, his whereabouts unknown since he fled Malaysia in 2015.

This is the Malaysian at the heart of the scandal – pudgy faced playboy, the “billion-dollar whale,” himself, casino addict and Paris Hilton fan Jho Low, famed for his yacht, his parties and his art collection, all bought with stolen funds.

He had even launched a campaign to block Mr Wright and Mr Hope’s book from distribution in multiple countries, undertaken by London-based law firm Schillings, which seems a suitable name for lawyers undertaking such work. This was despite the fact that since October 2016, Jho Low has been subject to a red notice issued by Interpol, requiring states to cooperate in extraditing him to Malaysia to face charges there.

Last year, the government of Cyprus finally revoked Jho Low’s passport, which he acquired in 2015 through the so-called “golden passport program,” with the support of a Cypriot archbishop, to whom he had thoughtfully made a six-figure charitable donation – with stolen funds.

His exact whereabouts were unknown, until last week…

Whale hunting is still legal when it targets corruption

But Bradley Hope and Tom Wright have never given up on finding Jho Low and bringing him to justice. After leaving The Wall Street Journal, the pair set up Project Brazen and its Whale Hunting program, investigating world leaders who copy Mr Najib and embezzle cash – shady characters like deposed Bangladeshi Prime Minister Sheikh Hasina and her US$2 billion offshore stash, and Iranian supreme leader Ayatollah Ali Khamenei, who owns a surprisingly large secret personal wealth.

Last week, they delivered the results of their hunt for Jho Low to the world and updated their findings on 1MDB.

Jho Low is actually fake Aussie Constantinos Achilles Veis?

They found Jho Low has been using a fake Australian passport bearing the name of "Constantinos Achilles Veis" and the birthdate of January 10, 1980, to live in China. They even managed to find a copy of the document for their expose which they shared with those who signed up with the Whale Hunting newsletter (including me).

Project Brazen’s investigators traced him to a wealthy neighbourhood in Shanghai called Green Hills where he is living in a mansion, driving in (unnamed) luxury cars to travel 15 minutes to his office at the Shanghai Financial Centre.

Surprise! It wasn’t as if the Chinese Government didn’t know exactly who their fraudulent Aussie resident was. Hope and Wright went on to detail how Jho Low is working as a strategist for the Chinese Government to help sanctioned Chinese companies overcome restrictions around the world.

We should emphasise that Jho Low has always maintained his innocence, despite the Interpol red notice. He insists he broke no laws and is a victim of political persecution, but he has resolutely resisted all efforts to get him to return to Malaysia to stand trial, and many of his associates have been convicted.

The "belt and road" angle to 1MDB

What also emerged from the last Whale Hunting investigation is how Jho Low and Prime Minister Najib Razak enlisted the support of the Chinese Government both to bail them and the plundered 1MDB fund out when news of the malfeasance was being exposed and the noose was starting to tighten on them in 2016.

It is worthwhile to quote the full extract of Project Brazen’s reporting here, as the risks of corruption, opaque payments and overbilling may be relevant to many countries that are receiving Chinese investment under the "belt and road" initiative:

“In an effort to cover 1MDB’s gaping financial holes and secure political protection, Low turned to China. In 2016, he helped broker a secret arrangement with Beijing: Malaysia would award inflated infrastructure contracts to Chinese state firms – and in return, China would quietly help bail out 1MDB’s debts.

"Within months, the Malaysian Government signed US$34 billion of rail and pipeline deals with China, including the East Coast Rail Link and multiple pipeline projects. Evidence later showed that these projects were wildly overpriced – for example, the rail link was budgeted at US$16 billion when Malaysian consultants said it should cost only US$7.25 billion.

"Investigators believe the excess billions were a slush fund: Chinese banks would finance the projects at the inflated prices, the contractors (Chinese state companies) would get paid, and a chunk of that money would be diverted to settle 1MDB’s obligations and perhaps line conspirators’ pockets. In effect, Low was trying to launder the 1MDB problem through China’s 'belt and road initiative.'

"According to Malaysia’s finance ministry, at least US$2–3 billion from a China EXIM Bank loan for a pipeline project was disbursed despite only 13 per cent of the work being completed – raising suspicions that the bulk of those funds (around US$2 billion) went elsewhere, possibly to 1MDB’s creditors or hidden accounts….”

Hope and Wright now report that US$7.65 billion dollars were likely stolen from 1MDB, and they reckon that Jho Low personally stole about US$2.5 billion himself, funnelling cash through networks of obscure offshore companies and tax-haven bank accounts.

The investigators calculate that the overpriced belt and road initiative contracts that Najib Razak signed in order to cover up the 1MDB fraud led to Malaysia suffering another US$6 billion in losses on top of the funds stolen from 1MDB.

As a result of these Chinese state funds being used to cover up the earlier theft of 1MDB funds, Malaysian authorities now believe that the total cost of the 1MDB scandal is much worse than the previous estimate of US$4.5 billion in losses. Project Brazen reckons it could be as high as US$18 billion.

1MDB is important because it highlights a number of weaknesses in global governance, which are highly relevant to other countries and other situations, including the "dark fleet" of Russian and Iranian oil smuggling tankers.

Firstly, it shows how hard it is to stop corruption when it goes to the very top of a country, whether Malaysia in 1MDB, or Mozambique in the Tuna Bond Scandal or Brazil in the Lava Jato (“car wash”) fraud investigation or Russia under Vladimir Putin.

Secondly, it shows how that once money is stolen from a government and syphoned through ill-policed offshore tax havens like the British Virgin Islands and various other money laundering centres, it is hard to recover. Malaysia has been burdened with billions in unnecessary debt, which taxpayers and the treasury have to repay for years to come.

So has Mozambique, so was Ukraine under its ousted and unlamented President Viktor Yanukovych. It is likely that future investigations in Hungary and Serbia will find Presidents Orban and Vucic have also been up to their eyeballs in self-enrichments this last decade. Readers can draw their own conclusions about other countries similarly being plundered in plain sight.

Finally, Jho Low’s continued evasion of justice shows the limits of global law enforcement when a powerful state finds an individual accused of crimes elsewhere to be useful, and shelters them. In this respect Jho Low is very much like Austrian criminal Jan Marsalek, who seems to have masterminded the theft of US$4 billion from German payments company Wirecard before flying to Russia to escape prosecution.

Malaysia’s attempts to secure Low’s extradition have so far been fruitless, and Germany’s efforts to bring Marsalek to justice have so far also drawn a blank.

The whale hunting investigation of Jho Low is investigative journalism at its finest. Kudos to all involved.

Upstream without a paddle?

The opposite of fearless investigative journalism like that of the Brazen Project is soft and fawning content often written to put across the public relations message of the subject, known as “puff pieces.”

One of the most notorious examples of this genre was in February 2012 when fashion magazine Vogue published an article titled "A Rose in the Desert" about Asma al-Assad, the wife of then-Syrian President Bashar al-Assad.

Anna Wintour chose to run the piece just as Mr Assad ramped up a campaign of oppression against his own people, culminating in over a decade of civil war, poison gas attacks, massacres and human rights abuses that led to over 200,000 civilian deaths and over 600,000 total deaths, as well as over six million displaced people.

Rather than focus on the bloodshed, Vogue chose to focus on Ms Assad as a "wildly democratic" family-focused first lady, who took her kids on holiday in Europe, whose husband had made Syria the, "safest country in the Middle East" (yes, Vogue actually wrote that), and who had a distinct and elegant personal style.

The Hill later reported that US lobbying firm Brown Lloyd James had been paid US$5,000 per month by the Syrian Government to arrange for and manage the Vogue article. A bargain! Not surprisingly, the piece was quickly wiped from the Vogue website, but The Atlantic has the full details.

It's rare to see a puff piece in the offshore and shipping press, and certainly we try not to run them here at Baird. But we were surprised to spot one brazen piece relating to a well-known Chinese entrepreneur and extradited tax evader, only last week, in Upstream, the oil and gas journal of record.

We were bewildered as it came only a few weeks after Upstream’s sister publication Tradewinds had highlighted the arrest of an anchor handler seemingly owned by companies connected to subject of the article.

Simon Liang’s back… at the centre of several lawsuits!

We refer of course to Sinopacific and Simon Liang Xiaolei, whose 150-ton bollard pull anchor handler Spec Nichole has been arrested in Singapore due to the owner’s default on a mortgage of over US$60 million owed to the EXIM Bank of China. We covered the story tangentially here at the end of June.

We also understand that Mr Liang and his companies are being sued in a separate case in Switzerland relating to the non-payment of operating expenses, crew wages and ship management fees for this vessel and two sister ships.

The article was silent on this litigation, even though the European case names Mr Liang directly, and his company’s logo is emblazoned across the side of the arrested vessel.

Simon Liang’s back… whitewashing his past

Simon Liang must have glowed with pleasure when he read the article in Upstream last Thursday entitled “From collapse to comeback: Simon Liang reinvents global OSV game,” which began, “nine years after the fall of his shipbuilding empire, Simon Liang has returned with SPEC — a lean offshore venture that has landed 20 OSV orders in 18 months by prioritising speed, focus and clean technology over scale.”

Not coincidentally, SPEC 3 is the name of the company that defaulted on the EXIM Bank mortgage, leading to the arrest of Spec Nichole by its Chinese Government-owned creditor. But Xu Yihe makes no reference to this surprising and rather embarrassing detention.

We understand the arrest has left seafarers stranded on the vessel, as SPEC’s lawyers battle to prevent any crew moves, despite the clear obligation to repatriate those who wish to leave under the Maritime Labour Convention.

Mistakes were made, just a few

The piece goes on to mention that, “[a]t the age of 62, the former 'ship king' has orchestrated one of the industry’s most improbable comebacks.”

“I made mistakes," it also quoted Mr Liang as saying. "I saw markets but ignored the mechanics."

We’ve all made mistakes, but few of us have been accused of over US$150 million in tax evasion and been detained for financial crimes in China.

Upstream’s sister publication Tradewinds documented how Mr Liang was arrested at the airport in Myanmar in 2019 and extradited to China, where sources told us he was found guilty of certain financial crimes, and was unable to leave the country as a result.

He didn’t just see markets; he saw the inside of a Chinese detention cell.

Simon Liang’s back… with his kids on the ownership documents and his wife in Mauritius

Once you understand this context, the article’s comment below suddenly makes sense:

“Unlike his former empire, where he stood as chairman and the public face, Liang’s name does not appear on SPEC’s ownership documents. All equity is held by his children, while he refers to himself modestly as a 'chief advisor'."

Those charged or convicted of financial crimes in China are typically not allowed to become company directors there again, which might perhaps be pertinent to readers, rather than suggesting he holds the title of chief adviser out of modesty.

The company is held in the name of his children as a necessity, rather than a choice, it seems. Other SPEC entities appear to be owned by other family members in a sprawling cross-border network of related entities stretching from the British Virgin Islands to the Indian Ocean, Singapore and China.

Both Liang and his wife, French citizen Ann Chen Xiaoxi, do act as directors of the private Singapore company called Family Liang Holding in Singapore, sources close to the case with EXIM Bank have confirmed. Ms Chen is also understood to have purchased property in the offshore tax haven of Mauritius, where she is director of a private company whose ownership is not open to public examination.

Drinking tea and making babies… or facing prosecution?

For me, the best line of Xu Yihe’s piece was this:

“Liang jokes that his years in exile were spent 'drinking tea and making babies' — a nod to the three young children in his family and the long pause in his professional life.”

He was extradited from Myanmar and detained for tax fraud, for goodness' sake! That would create a “long pause” in anyone’s professional life, and it is shocking that these details were omitted from the piece.

Simon Liang’s back… will EXIM Bank or his creditors move on his newbuilds?

Having explained in public how his assets are held by nominees, there may be a risk that Mr Liang’s creditors in the two pieces of litigation against SPEC move against his newbuildings if they prevail at law.

We’re not lawyers, and we cannot comment on the likelihood of a successful claim beyond the Spec Nichole cases, but clearly several of the 20 newbuild offshore support vessels SPEC claims to be building are owned by SPEC in China, and could be targeted by the creditors, if the corporate veil was pierced. Indeed, the Upstream article quotes Mr Liang confirming this:

“Liang estimates that only two of SPEC's 20 vessels currently under construction will be owned outright by the company. The remainder are being built for partners, with SPEC playing a central, orchestrating role.”

With one ship arrested and two lawsuits outstanding against SPEC entities or Mr Liang personally, this could be a case of buyer or charterer beware.

We should stress that we are not implying any wrongdoing by Mr Liang or any of the Sinopacific or SPEC companies – well, not since his high-profile arrest in 2019, anyway. However, some details need to be added to the puff piece that has appeared in the industry press and some clarification should be added to the rosy spin presented, when a SPEC-branded ship is detained and subject to a high court battle in Singapore.

When journalists use investigative powers to their full, the public interest is well served. The contrast between the deep investigation by the "whale hunters" and the story published by Upstream is clear.

Both stories feature characters who live in Shanghai and have had run-ins with the law, but the similarities end there.

Background reading

Former Malaysian Prime Minister and convicted criminal Najib Razak is also caught up in alleged corruption linked to a 2002 submarine deal whereby a French company sold two Scorpène-class diesel-electric attack submarines and one Agosta-class vessel to the Royal Malaysian Navy in a deal worth US$1.2 billion, with some kickbacks allegedly flowing back to parties involved with the buyers.

Mr Najib was forced to deny his involvement following a recent Bloomberg report, which cited French prosecutors’ claims about bribes tied to the purchase.

In May, Malaysia Today quoted a statement from the lawyers representing Mr Najib, which, “dismissed suggestions that the former Prime Minister had benefitted from the deal or played any unlawful role in its negotiation.”

The disgraced politician’s legal team said the Bloomberg report itself referenced a 2024 French court filing noting, “no evidence that shows he received any of those payments”, allegedly meant to remunerate purportedly corrupt Malaysian officials involved in the submarine purchase with what prosecutors claim were US$200 million of bribes.

“French prosecutors have not recommended that our client stand trial, nor has any indictment been sought against him," the lawyers stated. "In these circumstances, the article raises no issue of liability for our client, and any insinuation to the contrary is without factual foundation."

Bloomberg had reported that French financial prosecutors alleged last year that Mr Najib had attended meetings with defence company executives to arrange contracts ahead of the naval procurement deal in 2002, and the prosecutors claimed that the contracts were structured to benefit local decision-makers, including Najib’s then-adviser, Abdul Razak Baginda. Between 2000 and 2008, Najib Razak was Malaysian Minister for Defence.

The two Scorpène submarines were commissioned into service in 2009. Shaariibuugiin Altantuyaa, a Mongolian woman allegedly hired as a French translator to facilitate the purchase of the submarines, was murdered in 2006, with her body being blown up with explosives after she was shot.

Mr Baginda was acquitted of that crime by a Malaysian court in 2008 (BBC report here), but he was subsequently charged with corruption in France.

It seems that Najib Razak’s legacy will continue to haunt him, from his time both as Prime Minister and as Defence Minister.