Court-appointed liquidators of three companies tied to the scandal-hit 1Malaysia Development Berhad are suing Standard Chartered in Singapore for $2.7 billion for its alleged role in the multi-year misappropriation scheme that robbed Malaysia’s sovereign wealth fund of billions of dollars.
Liquidators from Alsen Chance Holdings, Blackstone Asia Real Estate Partners and Brightstone Jewellery allege that between 2009 and 2013, Standard Chartered permitted more than 100 intrabank transfers that helped hide the movement of stolen funds, as well as ignored obvious red flags, thus violating Singapore’s anti-money laundering laws.
These firms lost over $2.7 billion and SGD20 million in public funds through these transfers, according to the lawsuit, filed by Kroll’s Angela Barkhouse and Toni Shukla.
“We are pleased to see the Court-appointed liquidators taking action which will benefit the victims of the fraud, including 1MDB,” a spokesperson for the board of 1MDB said in a prepared statement. “The Malaysian people were the true victims of this global fraud, and all parties are determined to hold every facilitator to account — including financial institutions that failed in their most basic duties of vigilance and responsibility.”
One such transfer of $150 million went from Blackstone Asia directly to the personal bank account of Najib Razak, then-prime minister of Malaysia, who is currently serving a six-year prison sentence for corruption and money laundering, according to the press release seen by Banking Dive.
Another transfer, made by Alsen Chance, sent $53.4 million to jewelry, watch and bag vendors to fund luxury goods purchased by Razak’s wife Rosmah Mansor.
Standard Chartered told the Wall Street Journal that it hadn’t yet seen the legal documents and “emphatically rejects any claims.”
“Standard Chartered takes our responsibility to fight financial crime extremely seriously. We have made significant investments in strengthening our controls and uplifting our [anti-money laundering] standards, and will continue to do so,” the bank told the Journal.
Singapore’s financial regulator fined Standard Chartered $5.2 million in 2016 for AML violations tied to the scandal. Other banks, including Goldman Sachs, have also been penalized.
Goldman reached a $3.9 billion settlement with Malaysia in 2020 to resolve criminal and regulatory charges, and two of its top executives – Tim Leissner and Roger of – landed prison sentences for their “central roles” in the scheme.
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