May 25, 2023

1MDB Update: Fifth conviction in 1MDB case, over valuation report

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From The Edge Markets Maylasia

This article first appeared in The Edge Malaysia Weekly, on May 29, 2017 – June 04, 2017.

IN September 2009, 1Malaysia Development Bhd  invested US$1.0 billion in a joint venture with Petro Saudi International Ltd (PSI). The money was, however, remitted to a company unrelated to the JV, Good Star (Seychelles) Ltd, whose beneficial owner, according to court documents filed in Singapore, was Low Taek Jho (Jho Low). In March 2010, the JV was called off and the US$1.0 billion owed to 1MDB was converted into a loan to PSI. 1MDB then extended another US$800 million to PSI, bringing the total sum to US$1.8 billion. The loans plus interest totalling US$2.0 billion were later turned into a 49% stake in a Cayman entity  Petro Saudi Oil Services Ltd (PSOSL). In 2013, the 49% stake was sold to PSI and 1MDB through its unit Brazen Sky Ltd and invested into the now infamous units in a Cayman fund managed by Bridge Partners Investment Management (Cayman Ltd).

Last week, former remisier Kelvin Ang was fined S$9,000 for bribing an analyst with NRA Capital Pte Ltd to come up with a report for Bridge Partners that valued PSOSL at US$2.32 billion. Ang, the fifth person to be convicted in Singapore over 1MDB dealings, was also disgorged of the S$250,000 that he earned as fees.

We produce here the statement of facts filed by Singapore’s Attorney-General’s office against Ang.


DAC No. 915543 of 2016








1.     The accused is Ang Wee Keng, Kelvin, male/35 years old, holding NRIC No. S8121961C (the “Accused”). At the material time, the Accused was employed as a remisier at Maybank Kim Eng Securities Pte Ltd from 2009 to November 2015 earning an annual salary of about S$100,000 a year from commissions.

2.     The Accused was also the sole director and shareholder of Pinewoods Global Limited (“Pinewoods”), a company incorporated in the British Virgin Islands (“BVI”), and the beneficial owner of its bank account no. 788175750883 with Hang Seng Bank, Hong Kong.

3.     The Accused is a friend of one Yeo Jiawei (“Yeo”). During the material time, Yeo was an employee of BSI Bank Limited (“BSI”), and was a wealth planner in the Wealth Management Services department of BSI. The Accused was also acquainted with one Lee Chee Waiy (“Lee”) since 2007, who was working as a research analyst with NRA Capital Pte Ltd, an equity research company incorporated in Singapore with its registered office located at 133 Cecil Street #04-02 Singapore 069535 (“NRA Capital”), at the material time.



4.     Sometime in August 2013, Yeo sought the Accused’s help in obtaining a valuation of certain assets on behalf of a client. Yeo told the Accused that the valuation was to be done in respect of an entity PetroSaudi Oil Services Limited (“PSOSL”), an entity incorporated in the Cayman Islands which owned two drill ships, PetroSaudi Saturn and PetroSaudi Discoverer. Yeo also stressed to the Accused that the valuation was to be done on an urgent basis and that the client was willing to pay up to US$300,000 for the valuation report.

5.     The Accused then contacted NRA Capital. He convened a preliminary meeting with Kevin Scully (“Kevin”) and Raymond Lee (“Raymond”) of NRA Capital to ascertain if NRA Capital was able to provide valuation services, specifically for an oil field asset off the coast of South America. Kevin indicated that if the Accused gave them some supporting financial documents, they would check if NRA Capital was able to perform the requested valuation.

6.     Following the preliminary meeting, the Accused informed Yeo that he had identified an equity research company that could possibly perform the valuation. At his request, Yeo provided the Accused with several documents ostensibly related to PSOSL, including part of PSOSL’s annual report and consolidated financial statements for the year ended 31 December 2012 (comprising a cover page and pages 1 to 30) (“PSOSL’s annual report”). Yeo also asked the Accused to confirm if NRA Capital was able to value PSOSL at the figure of US$2.4 billion, having reference to these documents. The Accused then furnished these documents to NRA Capital for their review. The part of PSOSL’s annual report that the Accused had given to NRA Capital is enclosed at Annex A.

7.     Subsequently, NRA Capital confirmed that it was able to perform the requested financial valuation of PSOSL and meet the targeted valuation of about US$2.4 billion based on the documents provided to them. Raymond then requested for a profile of the client, which the Accused obtained from Yeo and forwarded to NRA Capital. It was then that the Accused

realized that the clients were one Bridge Partners Investment Management (Cayman) Limited (“Bridge Partners”) and one Affinity Equity International Partners Limited (“Affinity”), which were entities incorporated in the Cayman Islands and the BVI respectively. Aside from their names, the Accused was not told anything more about the clients.

8.     Yeo, upon being informed by the Accused that NRA Capital could value PSOSL at US$2.4 billion, instructed the Accused to tell NRA Capital to commence work immediately. The Accused subsequently met with Raymond to confirm NRA Capital’s appointment and the terms of engagement. At the meeting, Raymond informed the Accused that Lee was the research analyst who would be primarily in charge of valuing PSOSL. The Accused informed Raymond that the clients needed the valuation to meet the target figure of US$2.4 billion, and that the valuation report must be substantial in length. The Accused also stressed that time was of the essence and that the valuation report must be done on an urgent basis and completed within a week. Lee told the Accused that such substantial reports usually required a month to prepare, but at the insistence of the Accused, agreed to try to complete it within two weeks.

9.    During the same meeting, the Accused negotiated a referral fee of US$235,000 to be paid to Pinewoods by NRA Capital out of the US$300,000 which would be paid to NRA Capital by the clients for the valuation works, in return for the Accused recommending NRA Capital to the clients to perform the valuation works. The referral fee was to be paid to Pinewoods via its bank account with Hang Seng Bank, Hong Kong, both of which the Accused had set up to receive the referral fees from NRA Capital.

10.    On 29 August 2013, NRA Capital prepared a mandate letter addressed to Bridge Partners and Affinity appointing NRA Capital to perform the valuation of PSOSL. The mandate letter was executed and returned to NRA Capital.

11.    At about the same time, the Accused prepared a letter dated 29 August 2013 addressed to NRA Capital based on the mandate letter, which stated that NRA Capital would pay US$235,000 to Pinewoods, upon NRA Capital being paid the US$300,000 by the clients. This letter was signed by the Accused and Raymond, on behalf of Pinewoods and NRA Capital respectively.



12.     A few days after NRA Capital was appointed to perform the valuation on PSOSL, Yeo told the Accused that the clients were chasing for the valuation report. The Accused then called Lee on the phone to check on his progress, as he knew that Lee was the primary person working on the valuation. Lee told the Accused that he was handling many other prior projects simultaneously and that he would only start work on valuing PSOSL the week after.

13.    Concerned that the valuation report would not be ready in time, which could possibly compromise his referral fees, the Accused then decided to influence Lee to expedite the valuation report and arranged to meet with Lee for coffee near his office. The Accused prepared an envelope containing a sum of S$3,000 in cash to give to Lee to induce him to expedite the preparation of the valuation report for PSOSL, which would be favourable in that it would meet the clients’ target valuation figure of US$2.4 billion.

14.    When they met, Lee reiterated to the Accused that he had a lot of other projects and was going to Malaysia for the weekend. He would start work on the valuation report only the week after. Lee took the opportunity to ask the Accused for more details on PSOSL and its drill ships, including information on the charter contract for the two drill ships. Based on what Yeo had told him, the Accused told Lee that the “deal had already been done” and that the valuation by NRA Capital was needed simply to justify a valuation figure of US$2.4 billion on PSOSL.

15.    The Accused then corruptly gave Lee the said sum of S$3,000 in the envelope and asked him to expedite the valuation of PSOSL. The Accused told Lee that the money was for him to stay in Singapore to complete the valuation urgently. Lee accepted the S$3,000 and was induced to prioritise the valuation of PSOSL, and the preparation of the attendant report, over his other prior projects for NRA Capital.

16.    Following the Accused’s intimation that the deal had already been done, and the tight timeline, Lee relied on the documents provided to NRA Capital by the Accused in performing the valuation. Subsequently, NRA Capital issued a valuation report on PSOSL dated 16 September 2013 (the “Valuation Report”) which valued PSOSL and its assets at about US$2.4 billion as at the date of the Valuation Report. The Valuation Report was given to the Accused, who then passed it to Yeo. A copy of the Valuation Report is enclosed at Annex B.

17.    For the issuance of the Valuation Report, NRA Capital was paid a total of US$300,000 by Affinity in two tranches. On 20 September 2013, pursuant to the agreement between NRA Capital and Pinewoods, NRA Capital transferred a sum of US$235,000 via telegraphic transfer to Pinewoods’ bank account no. 788175750883 with Hang Seng Bank, Hong Kong.

18.    By corruptly giving gratification of S$3,000 to Lee, an agent of NRA Capital, an equity research company, to induce him to expedite the preparation of the Valuation Report issued by NRA Capital, which was favourable in that it met the clients’ target valuation figure of US$2.4 billion, the Accused had committed an offence under Section 6(b) of the Prevention of Corruption Act (Chapter 241, 1993 Rev Ed).


Dated this 24th day of May 2017




How NRA Capital reached the target valuation for PSOSL

Even in 2013, when oil prices were above US$100 a barrel, PetroSaudi Oil Services  Ltd( PSOSL) was not in the best shape. Its principal assets were two drill ships, each more than three decades old. Its sole client was Petróleos de Venezuela, SA (PDVSA), which was not paying its invoices in a timely manner. And, its bondholders had been warned that certain covenants had been breached.

Moreover, only one of its drill ships was generating revenue. While PetroSaudi Saturn was contracted to PDVSA until Oct 30, 2017, the other vessel, PetroSaudi Discoverer, had come off contract on June 11, 2012. As a result, PSOSL saw its revenue decline to US$148 million in 2012, from US$325 million in 2011. PSOSL reported a loss of US$96.9 million for 2012 versus earnings of US$51.5 million in 2011. It ended 2012 with net assets of US$93.6 million, down from US$190.5 million a year earlier.

Yet, NRA Capital put a valuation of US$2.4 billion on PSOSL in a report dated Sept 16, 2013. The assumptions behind this valuation came to light following the conviction of a fifth person in Singapore in the 1Malaysia Development Bhd case. On May 24, Kelvin Ang Wee Keng, a former remisier with Maybank Kim Eng, pleaded guilty to a charge of corruptly inducing Jacky Lee Chee Waiy, then  research analyst at NRA Capital, to speed up the preparation of the valuation report on PSOSL with a cash payment of S$3,000. According to the prosecution’s statement of facts, NRA Capital was given the mandate to produce the valuation report after it confirmed it could reach a valuation target of US$2.4 billion. Prosecutors also made both the valuation report and PSOSL’s financial report for 2012 available.

NRA Capital used a discounted cash flow model to reach its valuation. Among its assumptions were that both of PSOSL’s vessels would be contracted from 2013 to 2022 at an 86% utilisation rate. NRA Capital also assumed that PetroSaudi Saturn, the newer unit, would enjoy daily charter rates of US$517,264. PetroSaudi Discoverer would be leased at US$510,187 a day. A 4% annual increment in the daily rate was assumed for both units. All cash flows until 2022 were discounted at 12%, based on the approximate yield on Venezuela’s long-term sovereign debt at the time.

By NRA Capital’s calculations, this amounted to a present value of US$969.2 million. NRA also estimated the present value of PSOSL’s terminal value after 2022 to be US$1,423.8 million, based on terminal growth rate of 3% and weighted average cost of capital of 10%. All in, that added up to a valuation of just over US$2.4 billion.

In the report, NRA Capital said it had relied on information provided by the management of its client and/or their representatives. — By The Edge Singapore

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