KUALA LUMPUR: The man who was appointed as an independent fiduciary to oversee Red Granite Pictures, which is entangled in a 1MDB-related fraud probe, has been replaced by the chief financial officer of the film company.
This has been described as an unusual move by asset forfeiture experts in the US, according to Variety.
The appointment of Randall Hermann to replace Douglas Hansen comes in the wake of the US Department of Justice’s (DoJ) decision to put its civil forfeiture cases on hold so as not to jeopardise the cooperation of foreign law enforcement agencies in an ongoing criminal probe into 1MDB-related transactions.
Hermann will now oversee the company, while Red Granite and the DoJ seek to settle a massive corruption case.
Red Granite is accused of using funds stolen from 1MDB to finance “The Wolf of Wall Street,” “Dumb and Dumber To,” and “Daddy’s Home.”
Red Granite CEO is Riza Aziz, the stepson of Prime Minister Najib Razak, and a known friend of Low Taek Jho who is said by the DoJ to be the central figure in the alleged embezzlement of money from 1MDB.
The DoJ alleges that US$4.5 billion was looted from 1MDB to buy a yacht, luxury real estate, jewellery, and fine art.
According to Variety, prosecutors are seeking to seize Red Granite’s profits from the films on behalf of the Malaysian people.
Variety said the DoJ and Red Granite agreed in July to appoint Hansen, the producer of “Looper”, as an independent operational fiduciary for a period of at least 30 days.
The purpose, it said, was to provide oversight of the company and help maximise the value of its assets. Red Granite is working to release a remake of “Papillon” starring Charlie Hunnam.
Thirty days later, Hansen has been excused from the job. Variety contacted Hansen but he declined to discuss the matter, except to say: “It’s not a negative.”
In a filing over the weekend, federal prosecutors agreed to name Hermann, Red Granite’s CFO since August 2012, to succeed Hansen. Variety said the US Attorney’s Office declined to comment on the move.
It quoted attorney Lucas Rowe, a former federal prosecutor and an expert on asset forfeiture, as saying: “It’s extremely abnormal to leave an executive of a company permeated by fraud in charge as your fiduciary.”
Red Granite and prosecutors said Hermann would facilitate ongoing settlement talks and support Red Granite’s operations.
Red Granite has maintained that it did not knowingly receive stolen funds. Aziz and Jho Low have denied involvement in any embezzlement of 1MDB funds. 1MDB has said that no funds are missing from it.