Australia shuts down investment schemes run by fund linked to 1MDB

The Australian Federal Court has ordered five investment schemes managed by Avestra Asset Management to shut down, The Australian reported today, following the fund’s link to the 1Malaysia Development Berhad (1MDB) controversy.

It was reported that the judge made the decision after going through a report from liquidators, who unearthed undisclosed related-party transactions, 13 potential breaches of corporate law and failure to invest according to the fund’s individual mandates.

The report outlined the owner of Avestra Credit Fund, Bridge Global CMC, as a Cayman Islands vehicle linked to the 1MDB scandal. Avestra Credit had also backed a takeover bid against Malaysian company Harvest Court Industries.

The court was told that Bridge Global CMC was set up “to appeal to institutional investors (particularly from Malaysia and Hong Kong)”.

The Australian reported that Avestra executive Paul Rowles was believed to be the driving force behind the company’s push into Malaysia. Other court documents showed that Bridge Global CMC was part of Bridge Global Absolute Return Fund, which was allegedly used in a US$2.2 billion (RM9.5 billion) cover-up of a joint venture between 1MDB and PetroSaudi International.

The liquidators reportedly found that in May last year, Avestra Credit Fund loaned US$4.7 million, extracted from Avestra’s other funds, to Zenith City Investments, registered in tax haven the Seychelles.

Zenith is owned by Malaysian Eddie Chai who used the fund to help bid for Harvest Court, which was once said to have Prime Minister Datuk Seri Najib Razak’s son on its board. – December 15, 2015. –

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