New Zealand court lets Low family replace trustees in 1MDB-linked case

[WELLINGTON] A New Zealand court on Friday approved a request by relatives of Malaysian businessman Low Taek Jho to appoint new trustees to fight the seizure of assets by the US government in its investigation of the scandal-tainted 1MDB fund.

Low and several family members stand to lose US$260 million in assets held in New Zealand trusts that they benefited from after the US government seized the assets in a California court proceeding.

Assets included a aircraft, property in New York and the Viceroy L'Ermitage Hotel in Beverly Hills.

In its ruling, the New Zealand High Court agreed to a request by Low's family members to replace their Swiss trustees with New Zealand and Cayman Islands trust services companies.

"I am satisfied that the replacement of the current trustees with trustees who are willing to ensure that proper legal steps are taken in the California proceedings is not only expedient, but necessary to safeguard the trust assets," Judge Christopher Toogood said in his judgment.

Court records said the Swiss trustees did not take any steps to stop the seizure, citing concerns that that would be considered money laundering by the US government.

The Swiss trustees did not oppose the replacement.

Low's family lawyer, Michael Kyriak, declined to comment.

Low Taek Jho, commonly referred to as Jho Low, is among the people named in civil lawsuits filed in July by the US Department of Justice, which alleged that more than US$3.5 billion was misappropriated from the One Malaysia Development Berhad fund (1MDB).

The lawsuits seek to seize US$1 billion in assets allegedly siphoned off from 1MDB and diverted into valuable paintings, a private jet, and luxury real estate in the United States and London.

Judge Toogood said the New Zealand court had no view on the merits of the US government's allegations.

New Zealand has long been identified as offering a trust regime popular with the offshore wealth management business because its foreign trusts are secretive and not subject to tax.

New Zealand in July said it will introduce a registry of foreign trusts that tax and law enforcement agencies could use to investigate suspected money laundering and tax evasion.

REUTERS