Court allows 1MDB companies to use affidavit in bid to freeze Rosmah's assets

PUTRAJAYA: The Court of Appeal today allowed an appeal by 1Malaysia Development Bhd (1MDB) and 10 other companies to use an affidavit by Datin Seri Rosmah Mansor's former personal shopper in their bid to freeze her assets.

A three-member bench led by Datuk Dr Alwi Abdul Wahab unanimously overturned a High Court decision barring the companies from relying on the affidavit affirmed by Singaporean Shabnam Naraindas Daswani.

The affidavit was submitted in support of their application for a Mareva injunction.

The other members of the bench were Datuk Ismail Brahim and Datuk Leonard David Shim.

The appellate court ruled that the High Court judge had erred in dismissing the companies' application for leave to file the further affidavit.

The companies are seeking to freeze Rosmah's assets over allegations that she acquired more than 12,000 luxury items, including jewellery, watches and handbags, using approximately US$346 million allegedly misappropriated from 1MDB.

Shim, who read the judgment, said the High Court had erred in finding that exceptional circumstances had to be established before the companies could introduce the affidavit.

He said the Rules of Court did not require an applicant to establish exceptional circumstances when seeking an extension of time.

"The court also found that the companies had filed their application on June 20 last year, before written submissions in the injunction proceedings were completed on July 18.

"The delay of about two-and-a-half months in preparing the affidavit had been satisfactorily explained.

"Shabnam, who was initially named as the second defendant in the lawsuit, agreed to provide her account only after the companies discontinued their claim against her through a consent order on April 9 last year.

"Her affidavit, comprising 319 pages across nine volumes, contained invoices, correspondence with luxury goods vendors, photographs and communications involving fugitive businessman Low Taek Jho, better known as Jho Low, and Eric Tan.

"The documents also included details of payments for luxury items through offshore entities, allegedly using funds misappropriated from 1MDB," he said.

The appellate court said the affidavit was relevant to the companies' claims and their applications for Mareva and proprietary injunctions.

It added that the evidence could be used to challenge Rosmah's defence that the luxury items were gifts from third parties.

The court also found that allowing the affidavit would not cause substantial prejudice to Rosmah, as she would be given sufficient time to examine its contents and respond.

It said the companies would suffer greater injustice if they were prevented from introducing evidence that could only have been obtained following the consent order with Shabnam.

The court also awarded RM30,000 in costs to the companies, subject to allocatur.

The companies were represented by a legal team comprising Datuk Lim Chee Wee, Nathalie Ker and Henna Sanghvi, while Rosmah was represented by Datuk Rajan Navaratnam and Sheena Sebastian.

In their lawsuit, the companies alleged that funds misappropriated from 1MDB had been channelled through eight offshore entities in the British Virgin Islands and Seychelles.

They claimed that the funds were subsequently used to purchase more than 12,000 luxury items from 48 vendors across at least 14 jurisdictions.

The companies are seeking a Mareva injunction involving US$346.01 million, a proprietary injunction over the luxury items and an interim preservation order pending the disposal of their lawsuit against Rosmah.