American authorities are currently investigating a scandal in which $3.5 billion of Malaysia’s government sovereign wealth was misappropriated, involving an investor involved in Sony’s buyout of EMI.
In 2012 Sony made a deal that put them into a position as possibly the most powerful record label in the world. The “big four” record labels became three when Sony bought EMI Music Publishing for $2.2 billion. As such a monumental deal, with massive influence over the music industry as a whole any scandal involved in it’s purchase could result in major repercussions.
With that said, Malaysian businessman and EMI chairman Taek Jho Low is currently under suspect as a large player in a scandal involving over $3.5 billion of Malaysia’s state owned investment fund being taken for personal gains. Although not formally involved in the sovereign wealth fund, Jho Low is suspected to have been deeply involved in the scandal which saw money taken for personal business investments and luxury items like jewels and art.
Jho Low’s involvement is particularly interesting because it’s thought, by American authorities trying to seize wrongful gains, that the $106 million Low and his business Jynwel Capital invested in EMI were poached from Malaysia’s sovereign fund. Jho Low admits in his official biography that his involvement in Sony’s massive acquisition led to his position as a chairman of EMI in Asia.
Although EMI remains it’s own entity since their buyout they operate under Sony/ATV, a publishing branch of Sony’s business. The deal was made after EMI was put up for sale in 2011 when Citigroup repossessed the british major record label and was bought by Sony and their partner the Michael Jackson Estate, in conjunction with various investors like Jho Low.
Sony currently have attention focussed on them for reasons besides the Malaysia scandal, as they seek to buy the rest of the Michael Jackson estate. This would give Sony full power over the estate which controls Jackson’s own discography as well as major musical works by The Beatles and others. There are legal concerns that this would give Sony/ATV too much power in the music industry, though it’s expected Sony will still end up purchasing their stake in the Jackson estate.