Southeast Asia’s tallest tower ensnared in 1MDB scandal gets bailout

Malaysia government will foot the bill to complete the tower while investigation into missing money continues
June 23, 2018 03:52PM

From left: Exchange 106, Kuala Lumpur. (Credit: Paesh, Khalzuri Yazid)

UPDATED Dec. 2, 2018, 12:51 p.m.: The tallest tower in Southeast Asia is embroiled in a high stakes game of hide-and-seek.

The state fund that financed the 1,614-foot tower is missing about $750 million prompting an investigation by the Malaysia government, according to the Wall Street Journal. The tower, Exchange 106, in Kuala Lumpur is nearly finished so the government is footing the remaining bill in order to complete the project.

“We cannot bear to see the eyesore of a massive abandoned project in the heart of Kuala Lumpur,” said the country’s finance minister, Lim Guan Eng, to the Journal. The building’s future tenants include HSBC Holdings.

The state fund that managed the financing of Exchange 106, among other projects, is called 1Malaysia Development Bhd. (1MDB). It was founded in 2009 by former Prime Minister Najib Razak, against whom authorities are allegedly building a case. He denies any wrongdoing.

Lim told the Journal they were also looking into the $600 million Goldman Sachs made from placing bonds worth about $6.5 billion for the fund.

Goldman’s spokesperson told the Journal that “what we earned from the debt transactions reflected the risks we assumed at the time.”

American real estate is also caught up in the scandal via financier Jho Low. He invested in Steve Witkoff’s Park Lane Hotel along with a $30 million penthouse at the Time Warner Center and a Beverly Hills estate, which U.S. federal authorities made a move to seize last year claiming the properties were bought with stolen money[WSJ]Erin Hudson