MANILA, PHILIPPINES – The Maharlika Investment Corporation (MIC), the state entity managing the Philippines’ inaugural national wealth fund, has issued a forceful denial of a controversial report that linked it to Patrick Mahony, a British-Swiss national recently convicted in a major corruption scandal involving Malaysia’s 1MDB sovereign development fund.

The report, published on October 20 by the investigative news outlet Sarawak Report and subsequently cited by several Philippine media organizations, alleged that Mahony was actively advising key officials involved in establishing the Maharlika Investment Fund (MIF). The MIC vehemently rejected the claims, underscoring the necessity of maintaining integrity and public confidence in the highly scrutinized fund.

MIC Categorically Denies Association

In its official statement released on Tuesday, October 21, the MIC labeled the information as “false and potentially damaging.”

“MIC categorically denies these claims and clarifies that Mr. Mahony has not been and has never been engaged by MIC in any capacity, whether formal or otherwise,” the corporation asserted.

The firm sought to reassure the public that it “strictly operates within its legal mandate” under the oversight of its board of directors and a management team comprised of professionals committed to the “highest standards of competence, integrity, and accountability.”

The corporation emphasized that it remains “focused on its crucial mandate to manage and invest the Fund’s assets responsibly for the benefit of the Filipino people.” Furthermore, the MIC urged media organizations to rigorously verify information before publication and called upon the Sarawak Report to issue an immediate correction or retraction of its claims.

The Sarawak Report‘s Allegations

The investigative piece from the Malaysia-based website alleged that Mahony, the convicted global financier, was observed in Manila and was advising key figures behind the Philippine fund’s legal and governance architecture. Citing unnamed sources, the report claimed Mahony had established a “staffed office” in Makati—Manila’s primary financial hub—having moved there from Switzerland with his family. The report suggested he was “actively engaging in business as he awaits his appeal” of his Swiss conviction.

Sarawak Report is known globally for its long-running exposés on environmental issues and corruption, most notably its groundbreaking coverage of the 1Malaysia Development Berhad (1MDB) scandal that began in 2014. While the site is highly regarded for uncovering issues often ignored by mainstream Malaysian outlets, it has also faced criticism regarding its “sensational” journalistic style.

The Dark Shadow of 1MDB and Mahony’s Conviction

The seriousness of the allegation against the MIC is magnified by Mahony’s undeniable link to one of the world’s most infamous kleptocracy cases.

Mahony was found guilty in August 2024 by Switzerland’s Federal Criminal Court on charges of fraud, criminal mismanagement, and money laundering. He was one of several key figures implicated in the multibillion-dollar collapse of 1MDB. The Malaysian sovereign fund saw over $4.5 billion siphoned off to private accounts, triggering investigations and legal cases across numerous international territories.

Mahony and his co-defendant, Tarek Obaid (executives at PetroSaudi Oil Services), were convicted in Switzerland for their instrumental roles in the fraud. Mahony received a six-year jail term for embezzlement and over 300 counts of money laundering. The indictment papers stated that the two accused “are alleged, with the aim of enriching themselves and others, to have misappropriated at least $1.8 billion” from 1MDB under a joint venture with PetroSaudi, which was then laundered through Swiss accounts.

Under Swiss law, those eligible for an appeal, like Mahony, are often permitted to travel with relative freedom during the lengthy appeals process, explaining his reported presence in the Philippines. The 1MDB scandal previously led to the 2022 conviction and detention of former Malaysian Prime Minister Najib Razak, who had signed the initial $2.5 billion deal between PetroSaudi and 1MDB—the sovereign development fund’s first major investment.

The Maharlika Fund: A History of Scrutiny

The Maharlika Investment Fund (MIF), the Philippines’ first national wealth fund, aims to pool capital from state-run financial institutions, such as LandBank and the Development Bank of the Philippines, to invest in various assets, including infrastructure, real estate, and foreign currencies.

From its inception, the fund was met with heavy criticism during its relatively rapid passage through Congress, primarily due to direct comparisons and parallels drawn to the corruption scandals that plagued sovereign funds in other nations, most notably 1MDB.

Due to intense public backlash, the final legislation, which established the MIC, was amended to remove initial financing from sensitive social security and other welfare funding sources. Nonetheless, a Singaporean think tank cautioned that the fund’s somewhat vague role in infrastructure development could potentially leave it open to misuse of funds, though it acknowledged that Maharlika’s structure more closely resembled a “national investment fund” than a traditional sovereign wealth fund.

The fund was championed by former House Speaker Martin Romualdez, a cousin of President Ferdinand Marcos Jr., who has faced, and denied, allegations related to corruption in public works funding. President Marcos Jr., meanwhile, has publicly vowed that no one, even close kin, would be spared from any future corruption probes related to the fund.

In his 2023 State of the Nation Address, President Marcos championed the Maharlika as a major administration accomplishment, promising that it would allow “some of the nation’s high-priority projects” to rely on the fund “without the added debt burden.”

The fund was granted an initial capital stock of P500 billion, with P375 billion in common shares subscribed by government agencies. In a significant early move, the MIC made its first investment in January 2025, acquiring a 20% stake in the National Grid Corp. of the Philippines.

The necessity for the MIC to publicly and forcefully deny any connection to a figure like Patrick Mahony underscores the immense political pressure and scrutiny the Maharlika Fund will continue to face as it navigates its inaugural years, with the specter of corruption from other sovereign funds serving as a constant cautionary tale.