Hong-Kong based investment fund Jynwel Capital, whose Malaysian CEO Jho Low is caught in a corruption scandal, is exiting its stake in The Park Lane Hotel, according to sources familiar with the deal. Greenland Group, which announced in late April that it has purchased a 41-percent stake in the project, is Jynwel’s replacement.
Steve Witkoff, who heads the partnership that owns the property, declined to comment for this article and has not confirmed Greenland’s investment. At the time of Greenland’s April announcement, the company said it was buying its stake from Kuwaiti investment firm Al Waseet International, but did not disclose that it is ultimately replacing Jynwel.
When Witkoff, Harry Macklowe and Howard Lorber’s New Valley bought the 47-story hotel on Central Park South for $660 million in November 2013, Jynwel came on board as majority investor. The partners planned to replace the hotel with an 88-unit luxury condominium tower, but earlier this year Witkoff put those plans on hold, citing slowing demand for high-end condos.
Meanwhile, Jynwel became embroiled in the corruption scandal around Malaysia’s prime minister Najib Razak and the country’s sovereign wealth fund 1MDB. U.S. and Malaysian authorities are currently investigating 1MDB, alleging Razak and his associates used the fund as a personal piggy bank and siphoned off billions of dollars. According to prosecutors cited by the Wall Street Journal, Jynwel’s CEO Low – a family friend of Razak’s and an advisor to 1MDB – played a central role in the scheme and possibly enriched himself along the way.
In February, the New York Times reported on Low’s ties to a shell company that paid $30.55 million for a penthouse at the Time Warner Center in 2011. In September, the newspaper reported that investigators were looking at U.S. real estate assets tied to Low, and that these “could be seized if a case could be made that the properties had been purchased with the proceeds earned in corrupt practices.”
For Witkoff and his partners, replacing Jynwel with Greenland protects The Park Lane from such a fate.
Hong Kong-based Greenland Group, through its local subsidiary Greenland USA, is also developing the Pacific Park megaproject in Brooklyn in partnership with Forest City Ratner.