SWIFT to disconnect messaging for some Iranian banks this weekend

PARIS (Reuters) – SWIFT will disconnect some Iranian banks this weekend, the Belgium-based financial messaging service’s chief executive Gottfried Leibbrandt said on Friday, adding it was regrettable.

SWIFT said earlier this week that it would suspend the access of some Iranian banks “in the interest of the stability and integrity of the global financial system”.

SWIFT made no mention at the time of U.S. sanctions as the reason for the decision, which likely reflects the fact that it is caught between conflicting regulatory demands.

“This weekend we are going to disconnect a certain number of Iranian banks. It’s really regrettable, we’re not being allowed to be neutral,” Leibbrandt told a Franco-German business conference in Paris, adding that it was a commercial decision and that not all banks would be affected.

He later said that the list of banks would be published this weekend after the concerned banks were notified. He declined to confirm whether the central bank was on the list or not.

The U.S. government has told SWIFT that it is expected to comply with sanctions and it could face them itself if it fails to do so. On the other hand, SWIFT is barred from doing so under the European Union’s so-called blocking statute, which could subject it to European penalties for complying with U.S. law.

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Afghan peace conference: India shares table with Taliban

India, among other regional countries, is a part of the Russia-hosted peace conference in Moscow to end war Afghanistan.

    India is participating in a Russia-sponsored peace conference with Taliban in a significant reassessment of its position on talks with the armed group that has waged an armed rebellion since 2001.

    New Delhi has sent former Indian envoys to Afghanistan and Pakistan, Amar Sinha and TCA Raghavan respectively to attend the conference at the “non-official level”.

    “India supports all efforts at peace and reconciliation in Afghanistan that will preserve unity and plurality, and bring security, stability and prosperity to the country,” India’s Foreign Ministry spokesperson Raveesh Kumar said. 

    “India’s consistent policy has been that such efforts should be Afghan-led, Afghan-owned, and Afghan-controlled and with participation of the Government of Afghanistan,” he said.

    Moscow said it had invited representatives from the United States as well as Iran, China, Pakistan and five former Soviet republics in Central Asia.

    A five-member Taliban delegation led by Sher Mohammad Abbas Stanakzai, head of the Taliban’s political council in Qatar, also attended the talks in Moscow.

    The US has said it will send a representative from its embassy in Moscow to attend Friday’s talks.

    India’s participation is a stark departure from its earlier position as it has never engaged in formal talks with the Taliban group.

    Foreign policy analyst, Manoj Joshi from the Observer Research Foundation, said the talks in Moscow come at a time when the Taliban have steadily fortified their control in the Afghan countryside. 

    “Essentially, India has bowed to the inevitable since the US, Russia, China and even the Afghan government have all indicated one way or the other that they are ready to talk with the Taliban,” Joshi told Al Jazeera.

    “New Delhi is confident that the host Russians would not do anything which would be against India’s interests. Also, in participating in these talks, India takes the view that since the Afghan government, through the High Peace Council, is present, there should be no problem,” he added.

    The High Peace Council is a government body responsible for reconciliation efforts with the Taliban.

    “Element of seriousness” 

    The Russian diplomatic efforts come weeks after newly appointed US special envoy for peace in Afghanistan, Zalmay Khalilzad, held talks with Taliban in Qatar.

    He will visit Afghanistan, Pakistan, the United Arab Emirates and Qatar from November 8 to 20 in an effort to end 17-year-old war in Afghanistan.

    “There has been a shift in US policy – earlier, even though the previous administration spoke about a negotiated settlement, there was no concrete direction,” Zahid Hussain, an Islamabad-based security analyst, told Al Jazeera.

    “For the first time now, the US is talking directly to the Taliban, which is also acceptable to the Taliban, as this was their demand from the outset. There has been some movement.

    “There is an element of seriousness from all sides.”

    Reconciliation efforts

    Afghan President Ashraf Ghani has previously proposed talks with the Taliban, saying they could be recognised as a political party if they accepted a ceasefire and recognised the country’s constitution.

    The Taliban, who have been fighting the US-led forces since they were ousted from power in 2001, have generally refused to negotiate with the Afghan government.

    “Although the Afghan government is preparing to negotiate, many people are now blaming the government particularly President Ghani,” said Hekmatullah Azamy, acting head of Centre for Conflict and Peace Studies in Kabul.

    “They argue that successful peace talks mean a new interim administration which will be unacceptable to President Ghani,” Azamy told Al Jazeera.

    In the meeting on Friday, members of the High Peace Council (HPC) said they are ready for talks with Taliban without any preconditions.

    “The future of Taliban is a matter of serious concern for the group – both at the leadership level as well as for its rank and file,” Azamy said.

    “Taliban often questions whether they are ready to become a 100 percent political group and whether they can survive mainstream politics.

    “Moreover, would the rank and file follow the leaders or will they join groups like Daesh (Islamic State of Iraq and the Levant group).”

    Taliban officials have set withdrawal of all foreign forces, the release of prisoners and the lifting of a ban on travel as a preconditions for any peace talks.

    India had earlier refused to support a 2007 initiative of former Afghan President Hamid Karzai to engage the “good Taliban” in the peace process.

    “Some make a distinction between ‘good Taliban’ and ‘bad Taliban’ – I don’t, because I’ve seen the Taliban, they have only one cult – the cult of violence,” then Foreign Minister of India Pranab Mukherjee had said.

    The Taliban group has inflicted heavy toll on Afghan security forces in renewed attacks in recent weeks.

    At least 20 Afghan army soldiers were killed at a border outpost in western Afghanistan on Tuesday.

    More than 17 years after US-led forces invaded the country and removed the Taliban, the war is intensifying. In recent months, violence has continued with mounting casualties on both sides.

    There have been several attempts in recent years to broker a settlement between the Western-backed government in Kabul and the Taliban without much success.

    “India’s representatives are attending the talks in Moscow as part of efforts to bring peace and stability to the region. It’s not switching tack but evolving assessment of ground realities,” said a ruling Bharatiya Janata Party (BJP) lawmaker in New Delhi on condition of anonymity.

    “All efforts towards making peace, whether the US-led talks or Russia-led talks, will help. We will be there to observe,” he added.

    According to Azamy from Kabul India is one of the important stakeholders enjoying friendly ties wih Kabul. He says it is vital for New Delhi to be a part of peace talks, especially with the Taliban involved.

    “Without India’s involvement, the outcome of peace talks could upset them or make them feel insecure. They want to be engaged and aware of the developments,” he said.

    India has forged a close partnership with Kabul since the fall of Taliban. It has engaged in infrastructure and welfare projects in the war-torn country worth millions of dollars earning goodwill from Afghans.

    It has also provided training to Afghan military personnel as well as donating military hardware as part of its policy to deepen military ties.

    “By attending the Taliban talks, India can get a voice in the outcome of the peace process, where it has none at present. It will try to coordinate with the Afghan government which it supports strongly,” analyst Joshi told Al Jazeera.

    “Simultaneously, the process enables it to build ties with the Taliban, even if somewhat late in the day. India cannot ignore the fact that ground realities ensure that the Taliban will be in the Afghan governing structure in some form or the other.”

    With additional reporting by Asad Hashim from Islamabad, Pakistan

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    Dollar climbs toward 16-month high after hawkish Fed guidance

    LONDON (Reuters) – The dollar rose toward a 16-month high on Friday after the U.S. Federal Reserve kept interest rates steady and reaffirmed its monetary tightening stance, cueing up investors for a rate hike in December.

    The greenback fell broadly following U.S. midterm elections on Tuesday on expectations that the outcome would make further fiscal stimulus measures unlikely.

    But the currency bounced back and on Friday returned to outperforming most major currencies, underpinned by the robust U.S. economy and rising interest rates.

    “We’re wary of selling the dollar too soon, because the Fed is still hiking rates into a tightening labor market and trade tensions haven’t gone away,” said Kit Juckes, chief FX Strategist at Societe Generale.

    “The U.S.-Chinese wars of words go on, and the idea that a trade deal is almost done and will be rubber-stamped (at the G20) in Buenos Aires seems very optimistic.”

    The Fed is widely expected to raise interest rates in December, which would be its fourth hike this year.

    Renewed strength in the dollar – which tends to appreciate from trade war tensions by acting as a safe haven – is pushing the Chinese yuan toward 7 per dollar CNH=D3 and has seen the euro slip toward $1.13.

    In foreign exchange markets, investor focus is shifting back to the divergence between the monetary policies of the United States and other major economies.

    In Japan, where interest rates are seen staying extremely low, the yen JPY=D3 is near a five-week low against the dollar and has fallen 2.2 percent over the last 10 trading sessions.

    On Friday, though, the yen reversed course to trade up 0.2 percent at 111.86.

    The dollar index .DXY, a gauge of its performance against six major peers, traded at a one-week high at 96.916, not far from a 16-month high of 97.2 brushed on Oct. 31.

    The euro EUR= traded at $1.1351, down 0.1 percent.

    It fell on Thursday after the European Commission forecast that the Italian economy would grow more slowly than Rome thinks in the next two years, leading to much bigger budget deficits than assumed by the government.

    A standoff between the EU and Rome over the budget deficit and concerns over the bloc’s slowing economic growth have dragged on the euro, which has fallen 4.2 percent versus the dollar over the last six months.

    The pound GBP=D3 changed hands at $1.3015, down 0.3 percent.

    The British currency has benefited recently from growing investor expectations that Britain is close to reaching a deal with the EU, less than five months before it is due to exit the bloc.

    The Australian dollar AUD=D3 lost 0.2 percent to trade at $0.7241. It tends to struggle when sentiment toward China – Australia’s largest trade partner – weakens.

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    A big short growing in Italian debt

    LONDON (Reuters) – A surge of interest in Italian bond futures may be a sign of a substantial short position building up in short-dated Italian debt, raising the specter of more violent bond selloffs as budget negotiations between Rome and Brussels unfold.

    As Italy’s anti-establishment government attempts to pass an expansionary budget in the face of opposition from the European Union, investors are ramping up their use of a product that is increasingly being used to take bets that more losses are in store for the country’s bonds.

    Italy has the biggest outstanding bond market in the euro zone and futures trading has rocketed in recent months as hedge funds have stepped up their presence, even as the underlying cash bond markets have shown signs of stress during extreme episodes of volatility.

    Average daily turnover so far this year for short-term BTP futures contracts have surged 40 percent to nearly 70,000 contracts compared to 2017 while longer-term BTP futures have also grown substantially, according to futures exchange, Eurex.

    The rise in turnover has also been accompanied by surging yields and growing open interest or the amount of positions left outstanding, indicating speculators are comfortable in taking outright short bets, according to market players.

    For example, open interest on short-dated BTP futures <0#FBTS:> peaked at a record 280,000 contracts on Oct. 25 and has consistently averaged around 275,000 contracts in the last two weeks.

    “Clearly today there are a number of investors, including large hedge fund investors who are taking large short positions on Italian debt through both the short and long-dated BTP futures,” said Mark Dowding, head of developed markets at BlueBay Asset Management.

    In contrast to the growing popularity of bond futures, turnover in credit default swaps has declined as the increased scrutiny by regulators in the wake of the euro zone crisis dimmed its allure for taking speculative bets.

    For example, net outstanding dollar value of credit default swaps (CDS) contracts on Italy has declined by more than a quarter to less than $12 billion in the week ending November 6, compared to the beginning of 2017, according to data from post-trade provider Depository Trust & Clearing Corporation.

    “In a world where investors can’t take naked short positions by buying sovereign CDS, Italian futures are the instrument to use if you want to implement a short view,” Dowding added.


    A portfolio manager at a macro-hedge fund in London said he uses futures to take bets on Italian debt because the margining system in futures contracts makes it less capital intensive than purchasing bonds.

    Margining refers to the practice in futures markets, wherein investors have to cough up only a chunk of the notional value contract, allowing them to take bigger positions. In cash or CDS trading, on the other hand, traders have to put up the entire amount in order to take a view.

    Despite more capital needed to trade credit default swaps compared to futures, these derivatives, designed to protect against the risk of debt default, were widely used by investors looking to hedge the possibility of sovereign default, especially in Greece, during the 2010-2012 debt crisis.

    CDS were used also to take directional bets on a market, sometimes even when the investor did not own the bond prompting regulators to bring in rules banning “naked” CDS trading — purchasing CDS contracts in a purely speculative manner without having exposure to the underlying asset.

    The increased scrutiny on CDS trading by regulators fueled appetite for trading bond futures as investors welcomed their transparent settlement mechanisms and liquidity, particularly during times of market stress.

    So this year, when a severe Italian bond selloff kicked off in May, futures trading exploded where open interest has increased every month barring May, June and September this year.

    Seamus MacGorain, a fixed income portfolio manager at JP Morgan Asset Management, said futures trading activity also tends to spike during periods of volatility because that is usually accompanied by across-the-board liquidity declines.

    Decline in liquidity is evident from widening bid-offer spreads — the difference between prices what investors pay to execute a trade with wider spreads indicating falling liquidity.

    In September for instance, monthly weighted average bid-offer spreads on five-year bonds stood at a chunky 13 basis points, the Italian Treasury’s website says.

    Those spreads were a fraction in the futures markets, according to a bond trader.

    “Italian bond market liquidity fell during summer’s market volatility, and continues to be impaired,” MacGorain said.

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    China regulator relaxes refinancing rules for listed companies

    SHANGHAI/BEIJING (Reuters) – China’s securities regulator published revised rules on Friday that would allow listed companies to issue additional shares more frequently, and for broader use.

    The China Securities Regulatory Commission (CSRC) said at a press conference that money raised via private share placement can be fully used to replenish operating capital and repay debts.

    Meanwhile, qualified companies are now allowed to sell additional shares six months after the previous round of financing, compared with a minimum period of 18 months previously.

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    European shares dip as Fed saps post U.S. midterms rally

    LONDON (Reuters) – European shares dipped at the open on Friday, joining a global market retreat that spread from Wall Street to Asian markets after the Federal Reserve noted a dip in U.S. business investment and suggested a rate hike was on track for December.

    A number of disappointing corporate earnings also weighed on morale, as Germany’s Thyssenkrupp fell to its lowest levels since July 2016 after cutting its profit outlook for the second time this year.

    The pan-European STOXX 600 was down 0.5 percent at 0817 GMT, while the leading index of euro zone stocks .STOXX50E was falling at roughly the same pace.

    All European bourses and most sectors were in negative territory with Germany’s DAX .GDAXI down 0.6 percent and France’s CAC 40 .FCHI losing 0.7 percent.

    The energy sector also acted as a drag with oil majors weighing on indexes as rising supply and concerns of an economic slowdown pressured prices, with U.S. crude down by around 20 percent since early October.

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    Asean Summit security operation 'as complex to plan for' as Trump-Kim Summit

    SINGAPORE – The operation to safeguard the upcoming Asean Summit will involve fewer military personnel and resources than the Trump-Kim Summit held here in June, but is just as complex to plan for.

    Colonel Lim Kok Hong, head of the Current Operations Group for the Singapore Armed Forces (SAF), said that although next week’s summit will involve 1,600 military personnel, compared to the 2,000 in June 2018’s historic meeting between the American and North Korea leaders, the circumstances are different.

    “Every summit location will provide different challenges. The previous one (Trump-Kim Summit) was a lot closer to the sea, hence our security posture was different.

    “This one is closer inland, there are a lot more heads of state, a lot more hotels, so the challenges are different, but we overcome them with planning,” added Col Lim, who spoke to the media on Friday (Nov 9) on board the RSS Sovereignty.

    The 33rd Asean Summit and related summits will be held at the Suntec Singapore International Convention and Exhibition Centre from Nov 11 to Nov 15, and attended by leaders from 10 South-east Asian countries and their counterparts from China, the US, Japan and Russia.

    The SAF will be deploying over 40 assets from several task forces to secure Singapore’s airspace and surrounding waters during the summit.

    “We also work closely with our homefront agency partners like the Singapore Police Force and Singapore Civil Defence Force in order to protect the Asean Summit location,” said Col Lim.

    Preparations for the summit have been consistent and ongoing as this is a scheduled event, unlike the uncertainty surrounding the Trump-Kim Summit, added Col Lim.

    United States President Donald Trump met North Korean leader Kim Jong Un in Singapore on June 12, 2018. The meeting and venue was first announced on May 10, but then cancelled abruptly on May 24.

    Later on June 2, it was announced that the meeting would take place.

    For the Asean Summit, the Maritime Security Task Force will have two vessels – a littoral mission vessel and a patrol vessel – patrolling the anchorage around Marina Barrage, where an average of 200 merchant ships like tankers and container vessels sit daily.

    The Air Defence Task Force will also adopt a heightened security stance. On high alert, there will be additional precautions such as F-15SG and F-16 fighter jets in the sky to conduct combat air patrol.

    On land, the Island Defence Task Force and Special Operations Task Force will support the police in security operations, with Chemical, Biological, Radiological and Explosives (CBRE) teams and the Medical Response Force involved as well.

    Go to our Asean microsite for more stories and commentaries

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    Dollar supported by hawkish Fed, yen bounces after hitting five-week low

    SINGAPORE (Reuters) – The dollar gained versus the euro and sterling on Friday as the U.S. Federal Reserve kept interest rates steady but reaffirmed its monetary tightening stance, setting the stage for a rate hike in December.

    In foreign exchange markets, investor focus is now shifting back to the divergence between the monetary policies of the United States and other major economies, such as Japan where interest rates are seen staying extremely low. The yen, as a result, remains near a five-week low against the dollar.

    The dollar index .DXY, a gauge of its performance against six major peers, traded at a fresh one-week high at 96.75.

    “The Fed looks set to raise rates in December. They have been largely unfazed by the equity market correction in October,” said Ray Attrill, head of currency strategy at NAB.

    Attrill added that the dollar strength also follows a weak euro and a jittery sterling over the last few trading sessions.

    The Fed has raised its key policy rate three times this year, and the market expects another rate hike in December on the back of a robust U.S. economy, rising inflation and solid jobs growth.

    According to the CME group’s FedWatch tool, the likelihood of the Fed raising rates by another 25 basis points in December is 75 percent.

    Analysts are also expecting more rate hikes by the Fed next year.

    “We anticipate two more hikes in 2019: one in March and one in June,” Kevin Logan, chief U.S. economist at HSBC, said in a note.

    The yen JPY= reversed course after hitting a five-week low versus the dollar to trade at 111.86 on Friday.

    The dollar has gained 2.24 percent versus the yen over the last 10 trading sessions due to the diverging monetary policies of the Fed and the Bank of Japan.

    While the Fed is on track to raise interest rates, the BOJ is expected to keep its ultra loose monetary policy due to low growth and inflation.

    The widening interest rate differential between U.S. and Japanese bonds has made the dollar a more attractive bet than the yen, which is often a funding currency for carry trades.

    Meanwhile, the euro EUR= traded at $1.1342 on Friday, losing 0.18 percent versus the greenback. The single currency fell 0.54 percent on Thursday as traders reacted to negative news out of Europe.

    The European Commission forecast on Thursday that the Italian economy would grow more slowly than Rome thinks in the next two years, leading to much bigger budget deficits than assumed by the new government.

    The standoff between the EU and Rome over Italy’s budget deficit and concerns over Europe’s slowing economic growth have dragged the euro which has fallen 4.2 percent versus the dollar over the last six months.

    The British pound GBP= changed hands at $1.3049 on Friday, trading marginally lower versus the dollar. Sterling has gained 2.3 percent against the dollar in November.

    The pound has benefited from growing investor expectations that Britain is close to reaching a deal with the European Union, less than five months before it is due to exit the bloc.

    The Australian dollar AUD= lost 0.21 percent to trade at $0.7241 as sentiment was dampened by worries about rising U.S.-Sino trade war tensions. China is Australia’s largest trade partner and a weakening of sentiment toward China does not bode well for the Aussie dollar.

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    Alibaba goes to unusual lengths to ensure Singles' Day record

    HONG KONG (BLOOMBERG) – Alibaba Group is looking beyond borders to turn its annual Singles’ Day shopping celebration into a global phenomenon.

    This Sunday (Nov 11), the Chinese internet giant is including sales from Lazada, the online shopping mall it controls.

    Southeast Asia’ biggest web retailer is becoming a key part of Alibaba’s plan to fuel growth, on top of the company’s efforts to move into shopping malls, convenience stores and food delivery.

    The challenge for billionaire Jack Ma’s online empire is to break another sales transaction record after a decade of exceeding prior results.

    With a brewing trade war, a cooling economy and rising competition from smaller platforms such as JD.com and Pinduoduo, Alibaba is seeking to add new growth engines.

    The retail celebration on Nov 11 dedicated to the nation’s unattached has become an important bellwether not just for the company, but also the world’s No. 2 economy.

    “Singles’ Day has now become a stage for Alibaba to showcase its capabilities across all its platforms,” Daniel Zhang, chief executive officer, said at an October news conference in Beijing.

    He’s taking over after Ma steps down as executive chairman next year.

    It was Zhang who came up with the idea of turning Singles’ Day into a shopfest a decade ago.

    Now that this year’s one-day bazaar will be Ma’s last as chairman, Zhang will need to prove he can carry on the legacy. “We think 1 billion packages will become a daily event in the future,” he said.

    More than half a billion people are projected to visit Alibaba’s websites in search of Dyson hair dyers, infant formula and Gucci bags.

    Alibaba has been able to post breakneck growth for almost a decade, including a 39 per cent jump in sales last year to 168 billion yuan (S$33.3 billion).

    Still, there’s some uncertainty this year, due to a slowing economy, real estate deflation and trade tensions with the US that could impact on Chinese consumption.

    The weaker economy and rising household debt have, to some extent, dampened consumers’ confidence in China.

    Online retail sales growth slowed to 24 per cent, down 12 percentage points in the second quarter, according to the National Bureau of Statistics.

    Policymakers have made a slew of changes, including reductions in income tax and tariffs on goods. That indicates spending may pick up in coming months; the earliest proof could come from data during Singles’ Day.

    Last week, Alibaba reported quarterly profit and sales well above analysts’ estimates, while trimming its prediction for full-year sales by as much as 6 per cent, with Ma warning that the economic conflict between the world’s two largest economies could last 20 years.

    To fuel growth, Alibaba is expanding its playbook. Ele.me, the startup it took control of this year, will provide delivery services for select Starbucks stores across 11 cities in China.

    Rural Taobao will offer coupons for goods across 800 counties, and Lazada will roll out promotions across six Southeast Asian countries including Indonesia, Malaysia and Thailand.

    Although it’s been three years since Ma said he wants to make Singles’ Day a global shopping event, that hasn’t happened yet. International expansion will be a key part of Zhang’s plan to keep breaking sales records.

    Last year, Russia, Hong Kong and the US were the top three regions outside of mainland China to buy goods during the annual event. Popular items purchased overseas included mobile phones, wool coats and knitted sweaters, according to the company.

    At the same time, Alibaba’s efforts to push into the US are sputtering. It discarded a pledge to create a million jobs in the country, lost its top US dealmaker and jettisoned plans for affiliate Alipay to acquire MoneyGram.

    US President Donald Trump said in October that he plans to withdraw from a 192-nation treaty that gives Chinese companies discounted shipping rates for small packages sent to American consumers, making it harder to push into the market.

    Southeast Asia will give the clearest indication of Alibaba’s ability to go international. With Singapore-based Lazada now fully under its wing, the region remains one of the company’s relative bright spots.

    The slump in China’s advertising sector is also hurting Alibaba. A significant chunk of revenue comes from merchants spending money across the e-commerce giant’s platforms to lure customers.

    That item, which falls under the category “customer management revenue,” rose 26 per cent in the latest quarter, compared with 35 per cent in the prior period.

    “The macro slowdown has affected advertisers’ sales performances and thus their online ad spending budgets,” Ella Ji, an analyst at China Renaissance, wrote in a report.

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    Fugitive Malaysian businessman Jho Low may have passports from Australia, New Zealand, Thailand: Source

    PETALING JAYA (THE STAR/ASIA NEWS NETWORK) – Although his Malaysia and St Kitts and Nevis passports have been revoked, fugitive Malaysian financier Low Taek Jho may have other travel documents to help him avoid the law.

    A source said the authorities were looking into the possibility of Low, better known as Jho Low, having passports from Australia, New Zealand and Thailand.

    His family has substantial investments, including real estate and financial assets, in those countries.

    If so, it may be harder to nab the 37-year-old, now wanted in several countries, including Malaysia, in connection with the multi-billion-dollar 1MDB scandal.

    With these documents and his money, Low may be able to slip in and out of some countries without triggering any alert.

    After the cancellation of his Malaysian passport on June 15, Low is believed to have used a passport issued by the St Kitts and Nevis government.

    However, news emerged on Tuesday (Nov 6) that that passport had been “deactivated”, also in June.

    This suggests that he may have switched to travel documents from other countries as he is always on the move to evade arrest.

    “His late grandfather, Datuk Low Meng Tak, used to be in iron-ore mining and liquor distilleries in Thailand,” said the source.

    “In fact, his family continues to have business interests in Thailand. The Low family also own a lot of land and have a family house and other pieces of property in Bangkok.

    “They have Thai relatives and there is a possibility that Jho Low also has a Thai identity – by virtue of his grandfather’s vast businesses and investments in the country in the 1960s and 1970s and the fact that the elder Low had been a resident of Bangkok for a long time.”

    The source said the well-connected Low had wealthy Thai friends and through such associations, he might have enjoyed privileges most other people could not, including obtaining a Thai passport.

    In New Zealand, Low and his family are said to have some NZ$265 million (S$246 million) worth of assets held in trusts, while in Australia, they owned real estate in Melbourne and Sydney.

    The authorities have also not ruled out the possibility that he may still be relying on his Malaysian or St Kitts and Nevis passports, supplemented with bribes.

    “Despite the Malaysian and St Kitts and Nevis passports being cancelled, it would not be difficult for him to exit any country he had gained entry to, by using either one of the two passports.”

    The source pointed out that Low could buy his way out and move to another country using genuine or fake documentation.

    On Tuesday, St Kitts & Nevis Observer, a weekly newspaper, reported on its website that the government of the twin-island state cancelled Low’s passport several months ago.

    The report mentioned Prime Minister Tun Dr Mahathir Mohamad’s statement on June 8 that Malaysia wanted to arrest Low but could not do so because he was in a country with which Malaysia did not have an extradition treaty.

    The article said the administration decided to deactivate Low’s passport through Interpol in June “out of an abundance of caution”.

    St Kitts & Nevis Observer also said that its government was aware of the United States Department of Justice’s (DoJ) indictment of Low for conspiring to launder billions of dollars embezzled from 1Malaysia Development Bhd and to pay bribes to Malaysian and Abu Dhabi officials.

    The newspaper said that Low became an economic citizen of St Kitts and Nevis in 2011, although immigration records indicated that he had never entered the country.

    The DoJ has painted Low as the mastermind behind the alleged misappropriation of billions of dollars from 1MDB, while Singapore investigators called him a “key person of interest”.

    He has denied any wrongdoing and said he was only an informal consultant at 1MDB.

    Besides Malaysia and the US, the government-owned company is at the centre of money laundering investigations in at least six countries, including Switzerland and Singapore.

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