US govt to take Jho Low’s 55% share from sale of NY hotel
Developer regrets having to sell luxurious Park Lane Hotel in Manhattan, New York, following agreement reached with US Department of Justice.
The proceeds from the sale are to be split between the investors, but the US government will take all proceeds from Malaysian businessman Low Taek Jho’s 55% stake.
The Park Lane, a luxury 46-storey hotel in Manhattan with panoramic views of the legendary Central Park and New York City skyline, was purchased in an auction in July 2013, by Steven Witkoff, a New York developer.
What was significant about the deal was that Low, better known as Jho Low, had agreed to finance 85% of the US$654 million Witkoff had offered in making his successful bid for the property.
The other 15% was taken up by Witkoff and his partners.
According to the US daily, Jho Low had also provided the US$100 million non-refundable deposit, which was said to be twice the normal amount that any buyer would put up as a deposit.
Eventually, when the deal was finalised in November the same year, Jho Low was said to have negotiated with Abu Dhabi-based Mubadala Development to take up 30% of the deal, leaving him with 55%.
The DoJ revealed in its suit filed in Los Angeles last July, that in an email exchange with a staff in Witkoff’s company, Jho Low said the money for his side of the deal was coming from “Low family capital”, and “Just all the family.” Instead, the DoJ alleges in its suit that the money was actually from 1MDB.
The DoJ said the US$202.2 million from Jho Low had come directly from client escrow accounts under one of his law firms, DLA Piper.
The plan was for Witkoff’s company to bring down the hotel, built in 1971, and build a new supertower with ultra-luxury apartments, in one of the most expensive pieces of real estate in the world.
Soon, however, it was evident that there was some doubt as to how the project would commence with questions hanging over the source of the majority of the funds for the development. Hence, no work ever started on the planned new tower.
“This was the best site in New York City and maybe the world. We designed what the entire partnership thought was a beautiful building.
“Little did we know we’d face circumstances like this,” Witkoff told NYT over being forced to sell the property after reaching an agreement with the DoJ.
He was also reluctant to provide more details about his dealings with Jho Low.
In July last year, DoJ through its investigation found that over US$3.5 billion was misappropriated from 1MDB, the brainchild of Prime Minister Najib Razak.
The civil forfeiture suit sought to recover all the assets and investments made using the funds allegedly embezzled from 1MDB, including but not limited to Park Lane, a luxury hotel in Beverly Hills, condominiums in New York, a private jet, expensive works of art, as well as the financing of Martin Scorsese’s movie “The Wolf of Wall Street,” which starred Leonardo DiCaprio.
On March 22 this year, the Wall Street Journal reported that the US was prepared to charge Penang-born Jho Low, who was named in the DoJ civil suit, along with Riza Aziz, who is Najib’s stepson, and two former Abu Dhabi government officials.
‘1MDB asset seizure a criminal case, not civil’
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