Hakkasan's Future Hangs in the Balance in Light of New Evidence

Hakkasan and Omnia might be among the assets seized in the most extensive international corruption investigation in history.
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Hakkasan and Omnia might be among the assets seized in the most extensive international corruption investigation in history.

Following a year-long international investigation, Abu Dhabi sovereign wealth fund manager and former Hakkasan Group Chairman Khadem Al-Qubaisi has been detained by authorities for his alleged role in the diversion of billions of dollars from the Malaysian Government. In addition, a number of Al-Qubaisi’s land assets have been seized by the U.S. Department of Justice - and in light of a newly discovered document, Las Vegas staples Hakkasan and Omnia Nightclub might soon find themselves on that list.

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Despite his present dilemma, it could be argued that Al-Qubaisi had gotten involved in the Las Vegas nightlife industry at a more or less ideal time. Electronic music has grown into a sought-after commodity all across the globe in recent years, but perhaps no other city embraced its mainstream rise quite like Las Vegas did. With the local gaming industry having slowed down as a result of the 2008 economic downturn, the growth of extravagant Vegas nightclubs served to bring a younger, fresher tourist demographic to the city.

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Nowadays, hordes of early 20-somethings pour into vast, ornately decorated dance halls and exotic dayclubs every weekend to be wowed by second-to-none production values and performances by world-class headliners. For the past few years, the majority of the top ten highest grossing nightclubs in the world have called Las Vegas home according to Nightclub & Bar, and in 2015 Hakkasan itself even climbed to #2 on the list.

If a document uncovered during recent investigations into the origin of Hakkasan and Omnia's startup capital means what officials think it does, though, neither club might even have another chance to place.

Khadem al-Qubaisi

Former Hakkasan Group Chairman Khadem Al-Qubaisi

An article from last September in Malaysian investigative publication Sawarak Report - whose incisive exposés have prompted officials of numerous countries to officially investigate various matters - first connected Al-Qubaisi to funds that had gone missing from accounts belonging to 1Malaysia Development Berhad (1MDB). 1MDB is a government-owned strategic development company that puts taxes and investment capital towards initiatives intended to stimulate the Malaysian economy.

Jho Low at Mashable's Social Good Summit

Jynwel Capital CEO Jho Low at Mashable's Social Good Summit

Sarawak reported that Al-Qubaisi had allegedly enlisted the services of Jynwel Capital CEO Jho Low to divert funds from 1MDB. Low was an eccentric tycoon and notorious party animal whom the publication would eventually implicate for the misappropriation of capital from the strategic development company dating as far back as 2009. 

An anonymous source told the publication that Al-Qubaisi had more than likely been introduced to Low in 2010 by none other than present day Hakkasan Group CEO Neil Moffitt.

A couple of years ago, Moffitt was the subject of one of the EDM boom’s most celebrated comeback stories. After making a name for himself as part owner of UK superclub brand Godskitchen, he was said to have fallen into financial hardship after the 2009 closure of a Las Vegas nightclub he managed called ICE. 

Neil Moffitt Getty Images

Neil Moffitt. Source: Getty Images.

Then, as if from nowhere, the Arab Sheik who owned a relatively modest Cantonese restaurant chain based in the UK called Hakkasan aggressively expanded the company to facilitate the launch of one of the world’s biggest superclubs of the same name - and placed Moffitt at the helm. 

Khadem al-Qubaisi and Neil Moffitt Hakkasan

Khadem al-Qubaisi and Neil Moffitt at the grand opening of Hakkasan in April, 2013.

Cracks started to show when filings from interior designer Michael Palumbo’s California court case against Moffitt in 2015 revealed that his personal residence (as well as other properties Moffitt claimed to have purchased around the same time) had actually been paid for by Al-Qubaisi. Moffitt also begrudgingly confirmed in an interview with The Telegraph that the Hakkasan Group was a private company based in Abu Dhabi - and a closer look revealed that it was owned by Tasameem Real Estate LLC, which fueled media speculation that he was little more than a figurehead for the operation.

The mansion faux pas was the least of their worries considering that the aforementioned Sawarak Report exposé had come out around the same time. Shortly after it did, officials of several nations began to work in conjunction to investigate the connection between Al-Qubaisi and the 1MDB fraud. Understandably, Moffitt started to distance himself from Al-Qubaisi. 

“Mr. Al-Qubaisi has resigned as Chairman of Hakkasan, and is no longer involved in the operation of the company,” Moffitt told Las Vegas writer Pace Lattin in an April interview. He dismissed all notions that the club could be involved in any illegal practices by saying, “Having false and troubling rumors spread about a company that employs 6,000 people and is the most successful nightlife company in Las Vegas makes my job very challenging.”

According to the Wall Street Journal, the Department of Justice ramped up their investigation last month when they moved to seize over $1 billion suspected to have been stolen from 1MDB - more than has ever been attempted during an international corruption case. 

Of that sum, around $470 million was alleged to have been transferred into accounts controlled by Al-Qubaisi, and even after the seizure of several of his land assets around the globe (including the very mansion he had purchased for Moffitt), over $300 million still remains unaccounted for. Brandon Roos, who is Hakkasan’s vice president of legal affairs, wrote in a letter that after internal review he was “confident that Hakkasan had received money from a legitimate fund in the Middle East.”

The most recent findings of Sawarak Report, however, identify a potential conduit from the source of the misappropriated funds to the Hakkasan Group. Previously analyzed records had already shown that funds had been routed from 1MDB to an offshore shell company called Vasco Trust from 2012-2013. According to a newly uncovered document, a Vasco affiliate was renamed so it could be included under the Tasameem umbrella of companies.

vasco tasameem name change

The timing checks out as well; Hakkasan’s grand opening celebration took place in April of 2013, and by the end of the same year, the nightclub had reportedly received $266 million in “shareholder loans” from Tasameem. In 2015 the Hakkasan Group launched the monolithic Omnia Nightclub in a power play to secure the spot of highest grossing nightclub in the world, which has brought Al-Qubaisi’s shareholder loan amount up to $566 million as of this writing.

bd86cd4c5d3e55981cfeb3f2bd0cbf79071fa885.jpg

Given that Abu Dhabi officials have finally brought Al-Qubaisi into custody, the new information must have given United Arab Emirate authorities grounds to move forward with the next step of their investigation - but while it marks a turning point, it is by no means conclusive. The name swap seems to have allowed for transfers of funds from 1MDB to Vasco, and from Tasameem to Al-Qubaisi to have taken place - but by itself, it doesn’t necessarily prove that they did. 

If, however, further inspection turns up definitive evidence of Hakkasan and/or Omnia having been financed with capital originating from 1MDB, then little stands in the way of the nightclubs' seizure. 

Khadem Al-Qubaisi will be summoned to appear in court on August 22nd, after which the prosecutor will have 14 days to document statements and evidence before pressing charges in accordance with the United Arab Emirates law.