TheChek News Flow

A businessman helped fugitive Malaysian financier Jho Low strike deals with a Kuwaiti sheikh until a falling out

Last September, fugitive Malaysian financier Jho Low traveled to Kuwait, slipping free of international arrest notices and authorities in the U.S. and Malaysia seeking him for his alleged role in a multibillion-dollar fraud.

Mr. Low entered Kuwait despite red notices from international police agency Interpol, according to documents reviewed by The Wall Street Journal and people familiar with his Kuwait relationships.

The Kuwait connection has provided Mr. Low means to fend off U.S. and Malaysian investigators who accuse him of masterminding the plunder of Malaysian state investment fund 1Malaysia Development Bhd, or 1MDB. Mr. Low has denied wrongdoing.

Mr. Low had turned to the oil-rich emirate’s royal family in early 2016, as U.S. authorities began closing in and unraveling his life as a jet-setting deal-maker who financed the “The Wolf of Wall Street” movie and extravagant parties that drew Leonardo DiCaprio and other stars.

On visits to Kuwait in early 2016, he sought out a son of the prime minister, Sheikh Sabah Al-Jaber Al-Mubarak Al-Hamad Al-Sabah, whom he had met years earlier, and offered to use his contacts in China to steer investments to Kuwait, said a French businessman present at their meetings.

“‘I earned billions in Malaysia. I will earn a hundred billion in China, minimum,’" the businessman, Bachar Kiwan, then a business partner of the sheikh, recalls Mr. Low saying at a dinner in early 2016 hosted by the prime minister.

The Kuwaiti ties brought Mr. Low new protectors, new business deals and new channels for moving money. Banks there handled hundreds of millions of dollars tied to Mr. Low’s activities, including millions in payments to companies in the U.S. and U.K. to cover his mounting legal bills, according to people familiar with the transactions and documents reviewed by the Journal.

Malaysian investigators say they traced a trail of money from China to a Chinese bank in Kuwait and onward to a Cayman Islands entity partly controlled by Mr. Low that then paid nearly $1 billion for Low-controlled assets in Malaysia to pay some 1MDB debts. The transactions were in Chinese yuan to skirt U.S. attention, the investigators say.

Representatives for Mr. Low declined to comment. A spokesperson for Sheikh Sabah said he “categorically denies any wrongdoing,” and that the allegations about Mr. Low and the sheikh are false and originate from Mr. Kiwan and his associates who “have been indicted and convicted for forgery, fraud, and criminal breach of trust and other criminal acts against Sheikh Sabah.”

Mr. Kiwan said he became a target for retribution by Sheikh Sabah, who owned a stake in Mr. Kiwan’s Kuwait-based publishing and media firm, Al Waseet, after balking at a request from Mr. Low to shift money between different company accounts.

Mr. Low ultimately used Al Waseet to move 1.4 billion yuan ($200 million), according to Mr. Kiwan and documents viewed by the Journal.

Mr. Kiwan later fled Kuwait, hiding in a truck that took him to Iraq, after he was detained and, he said, beaten and otherwise mistreated by Kuwaiti secret services.

Mr. Kiwan, who is in France, was convicted in absentia in Kuwait of forgery and document falsification—charges he denies. His brother-in-law and brother are imprisoned in Kuwait after being convicted, respectively, on forgery and people-smuggling charges for helping Mr. Kiwan flee.

The Kuwaiti government didn’t respond to requests for comment, nor did the Malaysian government. The Justice Department declined to comment on Mr. Low’s activities in Kuwait.

Mr. Low spends most of his time in China and was residing in a compound in the city of Wuhan as of six months ago, say the Malaysian investigators. His current whereabouts couldn’t be ascertained. The Chinese government’s information office didn’t respond to a request for comment.

The U.S. Justice Department alleges that more than $4.5 billion in 1MDB holdings disappeared into intricate financial structures orchestrated by Mr. Low. Its collapse led to the unseating of his patron, then-Malaysian Prime Minister Najib Razak, who is on trial for money laundering and abuse-of-power charges relating to 1MDB. Mr. Najib denies the charges.

The Justice Department has since stripped Mr. Low of his custom-made yacht, a stake in New York’s Park Lane Hotel and $700 million in other assets, in civil-forfeiture settlements in which Mr. Low admitted no wrongdoing. He faces two criminal indictments in the U.S.

When Mr. Low began courting Kuwait in early 2016, Mr. Najib urgently needed to come up with billions of dollars 1MDB had borrowed but couldn’t repay because much of it allegedly was embezzled by Mr. Low and conspirators. He and Mr. Low turned to Beijing, appealing to a high-priority Chinese government program, the Belt-and-Road initiative, aimed at building infrastructure across Asia, Africa and other parts of the world.

Malaysia offered China rail and pipeline projects with an inflated $18 billion price tag to generate excess cash for other uses, according to documents reviewed by the Journal.

China Communications Construction Co., a giant state-owned business, took on the projects.

In Kuwait, Mr. Low brought along executives from China Communications and promised to further Beijing’s Belt-and-Road aspirations, said Mr. Kiwan, then the Al Waseet chairman.

China Communications didn’t respond to requests for comment.

Mr. Kiwan said his longstanding partnership with Sheikh Sabah drew Mr. Low’s attention. Mr. Kiwan obtained a license for his company in the 1990s and said he gave the sheikh a roughly 20% stake. He said he allowed the sheik’s family to use Al Waseet for personal transactions and he pursued projects at their behest.

After drinks one night, Mr. Low bragged about the parties he threw in the U.S., in the company of Paris Hilton and other celebrities. “Stars are slaves to money, and I am the master of money,” Mr. Low said, according to Mr. Kiwan.

Mr. Low gave Mr. Kiwan a phone loaded with the WeChat and Line messaging apps, Mr. Kiwan said. At Mr. Low’s urging, he said, he also opened an email account with Russian provider Yandex that the two shared, communicating by writing and deleting draft emails.

In April 2016, Sheikh Sabah traveled to Shanghai for the signing of an $8 billion joint real-estate investment fund between Al Waseet and China’s Greenland Holding Group, a large state-owned property company, according to public filings and announcements.

A letter from the sheikh to Greenland’s chairman, seen by the Journal, called it “the first major step in achieving our mutually beneficial long-term partnership between China and the Middle East in line with President Xi’s ‘One Belt, One Road’ vision.”

As part of the deal, entities registered in the Caribbean that use “Al Waseet” in their names would take ownership of Mr. Low’s $200 million stake in the Park Lane Hotel and then transfer it to Greenland Holding and Greenland Hong Kong Holdings, according to Mr. Kiwan and documents reviewed by the Journal.

At the time, Mr. Low told an associate the transaction would remove his biggest U.S.-based asset from the reach of the Justice Department, the associate said. The fund with Greenland ultimately didn’t move forward.

After the Shanghai meeting, Mr. Kiwan said, Mr. Low told him that China Communications planned to wire billions of yuan to Al Waseet, as payment to Mr. Low for helping the company win contracts in Malaysia. Mr. Kiwan said Mr. Low told him that a share would go to Sheikh Sabah.

In May and June 2016, according to documents and Mr. Kiwan, an Al Waseet subsidiary billed True Dragon Properties Limited, a Hong Kong holding of a unit of China Communications, for 1.4 billion yuan worth of asphalt—a product Mr. Kiwan’s firm didn’t produce or sell.

Mr. Low planned to use the transferred funds in part to pay legal bills, which exceeded $20 million, according to invoices and other documents viewed by the Journal. Then the first U.S. Justice Department lawsuit in its 1MDB investigation froze Mr. Low’s stake in the Park Lane and other assets.

When Mr. Low tried to sell a Monet painting targeted in the lawsuit via a Comoros Islands bank owned by the sheikh, the transaction got held up by a correspondent bank in Morocco, according to a U.S. court filing.

Sheikh Sabah and Mr. Kiwan confronted Mr. Low about the Justice Department probe. “‘The Chinese had dealt with the silly DOJ investigation,’” Mr. Kiwan said Mr. Low told them.

In September 2016, True Dragon wired the Al Waseet subsidiary the 1.4 billion yuan to an account at the Kuwait branch of the Chinese state-owned Industrial and Commercial Bank of China, or ICBC, according to Mr. Kiwan and documents. Mr. Low then asked Mr. Kiwan to transfer the money to another bank account belonging to Al Waseet, according to documents and Mr. Kiwan.

Then Mr. Kiwan refused, he said, because he didn’t want potential trouble from a U.S. investigation. He said Mr. Low told him: “You are ruining the next five years of my life” and then said, “You don’t know what you are getting yourself into.”

As an alternative, Mr. Low suggested transferring full ownership of the subsidiary holding the funds to the sheikh, said Mr. Kiwan, who agreed.

On Sept. 26, 2016, documents show, the bank began wiring the funds: €15 million ($17 million) to New York-based law firm Kobre & Kim LLP; $4.95 million to law firm Gibson, Dunn and Crutcher LLP of Los Angeles; €7 million to the Wright Maritime Group of Florida, for expenses related to Mr. Low’s yacht. None of the law firms answered questions for this article. Wright Maritime didn’t respond to a request for comment.

More transactions followed. In August 2017, Silk Road Southeast Asia Real Estate Ltd., a Cayman Islands company controlled at least partially by Mr. Low, paid nearly $1 billion to purchase 234 acres of property in Kuala Lumpur, Malaysia, that previously belonged to 1MDB and had since been taken over by a Malaysian Finance Ministry unit, according to the Malaysian investigators.

Silk Road’s funds came from a bank account at China’s ICBC in Kuwait, the investigators say.

Mr. Kiwan said that days after he declined to transfer the funds, a lawyer and an employee of Sheikh Sabah came to his office and warned that he had betrayed the family’s trust. Afterward, he was repeatedly detained and faced allegations about document falsification and other acts.

In December 2017, he fled.

He has twice been spared extradition to Kuwait, including in February 2020 by a Spanish court. Its ruling said that while evidence supports forgery charges against him, Mr. Kiwan may not receive fair treatment in Kuwait. It noted that the criminal allegations were based on complaints from Sheikh Sabah.