Former Hakkasan nightclub chairman arrested in 1MDB scandal

Khadem Al Qubaisi was arrested in Abu Dhabi in connected with $470M in embezzled funds

Khadem Al Qubaisi and Walker Tower penthouse
Khadem Al Qubaisi and Walker Tower penthouse

Abu Dhabi officials have arrested a key figure in the alleged scheme to siphon $3.5 billion from a Malaysian development investment fund.

Khadem Al Qubaisi, the former chairman of Hakkasan nightclub, was arrested in connection with Abu Dhabi authorities’ investigation into the scandal involving the 1Malaysia Development Bhd., or 1MDB, the Wall Street Journal reported. He was not yet charged. This spring, Qubaisi’s assets were frozen and he was told he could not leave the United Arab Emirates.

Prosecutors believe Qubaisi received $470 million in embezzled funds from 1MDB.

Last month, the Justice Department sought to seize more than $1 billion in assets purchased with funds from 1MDB, including about $100 million worth of real estate that Qubaisi allegedly bought with embezzled funds, including a $51 million penthouse at Walker Tower and two Los Angeles mansions worth $46 million combined.

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Now investigators are looking for connections between the 1MDB funds and Hakassan, and they’re investigating whether Qubaisi he used 1MDB funds to purchase a 482-foot mega yacht, the Topaz, which is reportedly the fifth-largest in the world.

Hakkasan Ltd., is based in London and is controlled by a member of the Abu Dhabi royal family, Sheikh Mansour Bin Zayed Al Nahyan, deputy prime minister of U.A.E. Qubaisi was chairman of Hakkasan and a member of its board until his resignation May 9. Prosecutors have not alleged wrongdoing by the company or its employees.

Instead, the U.S. government is probing Qubaisi’s role in arranging financing for Hakkasan around 2012, the time of the 1MDB fraud. Hakkasan reported hundreds of millions of dollars of shareholders loans between 2012 and 2016. In 2015, Hakkasan reduced the loans by issuing a “non-share equity instrument” to an undisclosed third party.

Hakkasan, which conducted its own review, said it received capital “from a legitimate fund in the Middle East” not connected to 1MDB. [WSJ] E.B. Solomont