The wolf falling prey again?
Hang on! Do not dig too deep, we are only talking about the 'Wolf of the Wall Street' movie. Released back in 2013, this movie made a lot of buzz, but how does it come to win limelight now, three years later? Did the lead character of the film, Jordan Belfort, bewitch the producers to such an extent that they got the movie funded by 'dirty money'?
For those who do not know, the film is based on a true story, that of Jordan Belfort, a stockbroker of the Wall Street, who in the 90’s, managed to make millions by pitching experienced investors, blue-chip stocks to then, persuade them to invest in penny stocks especially at a time when the stock market was at historical downs. The investors would be initially set on a winning spree to then crash down with the collapsing shares of those stocks. Operating under a company named Stratton Oakmont, Belfort sure made a lot of millions but, later got yanked by the authorities. This time, however, they aren’t taking to the real wolf, but the Hollywood adaptation of his autobiography.
Good money or bad money, that is the question...
The Wall Street Journal broke into the frame recently with a serious allegation. The journal caught a pretty complex detail and alleged that the film was produced by a source of dirty money. Monetary transactions effectuated to fund the huge project, apparently look rather suspicious since eminent financial bodies, highly ranked personalities and intriguing companies seem to be important links in the whole thing. Interestingly, the film in question took over six long years to finally hit the big screens though it was rather promising with Leonardo Dicaprio in the lead and Martin Scorsese wearing the hat of the director. Seemingly, the R-rated project wasn’t devoid of any risk, thus making studios skeptical and wary of investing in it. Finally, Red Granite pictures came up to take the risk. The company wasn’t a much-known production house at that time, having produced only 1 film, ‘Friends with kids’. Surprisingly, it was able to finance the heavy budget movie - ‘The Wolf of Wall Street’. Let’s get that disentangled.
Making the link
The key name to remember here is 1Malaysia Development Bhd. (1MBD). It is a Malaysian government-owned development fund founded in 2009 by the actual Malaysian Prime Minister, Najib Razak, in a bid to promote sustainable economic development. The fund is, however, much known for being subject to scandals. Another name to retain is Riza Aziz the chairperson of Red Granite pictures. Riza Aziz is notably the stepson of Najib Razak. As per the Wall street Journal, Aziz managed to siphon $155 million from the 1MDB to Red Granite Pictures and it isn’t the most simple of transactions. Before reaching Red Granite Pictures, the fund reportedly went through a series of offshore shell companies. Behind this, is a series of connections. Basically, cast members of the film are well known for their connections with Najib Razak. Jho Low, a well known Malaysian businessman, formerly accused of taking $700 million from the 1MDB, comes into play also. He is the one who introduced the two founders of Red Granite Pictures, Riza Aziz and Joey McFarland, to Leonardo Dicaprio. Here’s a small infographic to help you picture it better.
In 2014, during an interview, Mr Aziz declared that the funding of the film by Red Granite wasn’t done with any Malaysian money, but with the help of the project’s main investor, Mohamed Ahmed Badawy Al-Husseiny, a businessman in Abu Dhabi who was, at that time, at the head of Aabar Investments PJS. Mr Al-Husseiny also set up a company, Telina Holdings Inc, in the British Virgin Islands. All these names and companies are interlinked in helping the $155 million getting to Red granite pictures from the 1MDB.
Aabar Investments PJS and Aabar Investment PJS Ltd. These are two different companies set up by Al-Husseiny. Aabar Investments PJS is an Abu-Dhabi based investment fund which reportedly entered in legitimate business with the 1MBD while Aabar Investments PJS Ltd is a British Virgin Islands based company. It is interesting to note that the $155 million from the 1MBD was transferred to Aabar Investments PJS Ltd. The company then transferred $105 million of the amount to Red Granite Capital, also found at British Virgin Islands and set up to finance Red Granite Pictures. $50 million of the $155 million was transferred to Telina Holdings. Then, as per a loan agreement reviewed by the Wall Street Journal, Telina Holdings, lent $50 million to Red Granite capital in 2012. The latter then transferred the whole of the $155 million it received to Red Granite Capitals.
Such transactions definitely instill suspicion and could carry serious implications. Inquiry about the issue is still on and Red Granite seems to be complying to all investigation procedures. The Wolf of Wall Street clearly stood out at the box office, making $400 million of profit and getting nominated for 5 Academy awards. However, nothing yet proves that any of the profit flowed to 1MDB of Malaysia and despite the fact that the 1MDB has been associated with scandals in the past, anything so far does not concretely prove that the transaction in question was fraudulent. Nevertheless, if the allegations were to be true, the saga that will follow will definitely capture more attention. Stay tuned…