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Judge allows change of trustees in Low family case, US$265 mln in assets now in contention

Friday 20th January 2017

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The High Court judge in the Low family trust case will let the family substitute in two trustees who will fight the US Department of Justice's attempts to confiscate US$265 million in assets.

The family of Malaysian businessman Jho Low - his parents Low Hock Peng and Goh Gaik Ewe, and siblings Low May Lin and Low Taek Szen - are, alongside Jho Low, beneficiaries of New Zealand trusts which own assets the US Department of Justice alleges to be proceeds of a multi-billion dollar money laundering scheme, including a Bombardier jet, the Viceroy L’Ermitage Hotel in Beverley Hills and property in New York and Los Angeles. The US government alleges the trusts’ assets can be traced to an international conspiracy to launder money from Malaysian wealth fund 1MDB. 

At the High Court in Auckland today, Justice Kit Toogood's ruling was expected, after he said this morning that, having read submissions from both parties, he understood there was no real opposition to making orders for substituting the trustees. Justice Toogood opted to give an oral verdict with a written copy provided to counsel and media shortly afterwards, as he said he wanted to be clear about "the true nature of the proceedings".

"I'm aware of considerable news media interest in this case generated by allegations made by the United States government," the judge said. "I make it clear at the outset that the case in this court does not concern the merits of the allegations made by the US government."

The judge referred to a recent ruling from the Grand Court of the Cayman Islands, which allowed the replacement of trustees in similar circumstances.

"The forfeiture assets are not the only assets which the beneficiaries perceive to be under threat of forfeiture proceedings," the judge said, noting the family are also worried about property in Singapore.

Justice Toogood said he did not have an opinion on "what others might consider to be an overly cautious approach" by the defendants, who have refused to oppose the DOJ's forfeiture claims and have refused to resign as they are concerned they could be pursued by the US government.

"In this case, it is neither necessary nor appropriate for the court to question the trustees' decisions in that regard," the judge said. "It is sufficient that I'm satisfied assets located in the US are likely to be forfeited to the US government by default unless parties properly authorised to do so take sufficient steps available to them by law to prevent seizure."

The judge said the trustee replacement was not intended to frustrate the US government's legal action, but to ensure the asset forfeiture was fairly fought.

After an extended lunch break from 12:05pm until 2:45pm, the defendants told the court they had given up their application for an ancillary order for costs, with the plaintiff's QC Noel Ingram saying the issue had been dealt with on a treaty basis. The hearing began at 11:45am, having been delayed with the two parties working towards an ancillary costs agreement. 

The trustees had asked the court to make an order for their spending on the trust and for future legal costs they might incur, but the parties reached an agreement outside court. However, not all signatories could sign in the time period so Ingram asked the judge to make an order that there be no order as to costs, and the issue "lie in court" until a joint memorandum advising all the parties had signed has been filed.

 

BusinessDesk.co.nz

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