A luxury yacht linked to allegations that USD 4.5 billion was looted from Malaysia's state investment fund 1MDB must be returned to its wealthy owner, an Indonesian court ruled today, citing missteps by police in seizing the vessel.
The decision comes about six weeks after Indonesian authorities, acting on a request from the FBI, seized the Cayman Islands-registered Equanimity, reportedly worth some USD 250 million, which was moored off the Indonesian tourist island of Bali.
Its three dozen crew remain on the impounded ship.
The US Justice Department alleges in civil lawsuits that huge sums of money were stolen from 1MDB -- set up by Prime Minister Najib Razak -- in a campaign of fraud and money-laundering. Najib and the fund deny any wrongdoing.
The suits list USD 1.7 billion in assets allegedly bought with the stolen funds, which US officials are seeking to recover. Those assets include the 90-metre yacht purchased by Jho Low, a former unofficial adviser to 1MDB.
Low, whose exact whereabouts are unknown, challenged the seizure in court.
It sided with the Malaysian financier today, calling the police actions "invalid" and "unlawful". Indonesian authorities did not follow proper procedures concerning confiscation of assets sought by foreign authorities, it said.
"The Indonesian police acted beyond their power," said presiding judge Ratmoho, who like many Indonesians goes by one name.
"(The court) annuls the seizure."
Police spokesman Setyo Wasisto said authorities would abide by the decision, but could not say when the boat would be returned to Low. "We need to study the ruling first," he added.
Last month a spokesman for Low lashed out at the seizure, saying the US Department of Justice (DoJ) had "still not taken any steps to prove that any impropriety has occurred".
"It is therefore disappointing that, rather than reflecting on the deeply flawed and politically-motivated allegations, the DoJ is continuing with its pattern of global overreach -- all based on entirely unsupported claims of wrongdoing.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)