It may not be a testament of innocence but the United States government’s decision to dislodge superyacht Equanimity from its lawsuit over the 1MDB controversy has bestowed its previous owner, Equanimity Cayman Ltd. (ECL), some devices that could complicate the vessel’s ongoing auction in Malaysia.
The proverbial spanners that ECL now has access to became available because the super yacht’s contentious seizure in Indonesia followed by its detention in Malaysia was a result of a US lawsuit which was initiated over a claim it was bought using funds laundered in the US.
The withdrawal of the suit was revealed four days ago by fugitive businessman Low Taek Jho @ Jho Low and his lawyers. According to the suit filed on July 21 last year, Jho Lho played a key role in the misappropriation of 1MDB funds totalling USD$1.7 billion in assets, including the super yacht.
And since the US government can be deemed to be no longer interested in verifying the truth of such a claim, lawyers said that ECL can file an interpleader application before Equanimity’s auction ends, which according to report will be before March 31.
An interpleader is basically a procedure that one can initiate to determine a matter of claim or right to properties held by a third party.
However, in this case, lawyer Zaki Azmi said ECL has to set aside a court order on last October 19 which essentially declared the Malaysian government as Equanimity’s owner since ECL had failed to claim the vessel.
“To set aside that order, ECL needs to be party to the suit, hence the need to intervene. A stay application can also be simultaneously filed to halt the auction before an interpleader application is made,” he explained.
And even if ECL misses the boat there is no guarantee the new owner will be free of legal encumbrances as Zaki and another lawyer Fatihah Jamhari said there are ample legal avenues for the company to continue challenging the Malaysian government’s actions over Equanimity.
An example of such a procedure is to file an application to void the sale of Equanimity by auction which Fatihah said wi difficult to proceed but if it does, the new owner could risk having to return the vessel to ECL.
“There is a likelihood the new owner may need to return it. This auction has high risks because it is a fruit of the government’s contentious actions,” said Fatihah
As it is, the only meaningful information that has been disclosed to the public concerning the auction was that the yacht’s reserve price, which was previously kept secret, was set at RM543 million (USD130 million), about half of Equanimity’s original price.
And while it was previously reported that the auction had received “much interest” from bidders in Asia, Europe, the Middle East and the US, a lawyer who spoke anonymously argued that such may not be so.
“After the bidding was closed on last November 28, Sitpah Selvaratnam (the government’s lawyer in charge of Equanimity’s auction) mentioned that the bids received were not of an acceptable degree.
“Hence, why they entered the second phase of the auction where instead of bidding, the sale will be done through private negotiations. This, coupled with the setting of a reserve price seemed to suggest that the yacht ws not a such coveted item after all.
“And why bidders did not got all out to place satisfactory bids in the first phase is a no brainer. Why would someone who can afford to buy a yacht pour in so much money to buy a vessel that is susceptible to legal complications,” was the lawyer’s rhetorical remark.
Source: The Mole