A $2.7bn lawsuit against Standard Chartered over its alleged role in the 1MDB scandal will go to trial after the Singapore High Court rejected the lender’s application to strike out the suit.
The legal proceedings were brought by liquidators on behalf of three companies currently in liquidation: Alsen Chance Holdings, Blackstone Asia Real Estate Partners and Brightstone Jewellery. They are seeking to hold the UK-headquartered bank accountable for its role in allegedly enabling fraud to be committed against 1MDB, Malaysia’s sovereign wealth fund.
The liquidators said in a statement: “This outcome reaffirms that the claims against the bank, including claims of dishonest assistance and breach of the bank’s duties of reasonable skill and care, should properly proceed to trial, where the evidence can be fully examined.”
The suit, initially filed in Singapore last summer, represents the latest attempt to recover money taken from the Malaysian fund. The case against Standard Chartered relates to the billions of dollars that were laundered after their misappropriation from 1MDB. According to the FT, the suit argues the lender failed to conduct adequate anti-money laundering checks.
The raid on Malaysia’s wealth fund has been heralded as one of the biggest frauds of all time. Investigators in the US suggest that $4.5bn as a minimum was stolen from the fund through several schemes operated by Malaysian financier Jho Low, who remains at large but maintains his innocence.
The fraud also led to the prosecution of Malaysia’s then prime minister, Najib Razak. He was convicted and sentenced to 12 years in prison, which was halved to six in 2024.
A spokesperson from Standard Chartered told The Banker: “We will continue to vigorously defend against the claims. The recent decision in the bank’s appeal is not a decision on the merits of those claims. In any case, we respectfully disagree with the court’s decision, and intend to apply for permission to file a further appeal.
“We would like to reinforce that these are claims against the bank brought by shell companies that misappropriated funds from 1MDB and had no legitimate business. We emphatically reject the claims of these fraudulent entities. Their claims are without merit.”
The liquidators said they remain resolute in their commitment to recover misappropriated assets and to hold accountable those responsible for facilitating it.
“We welcome the dismissal of the bank’s appeal as a positive step forward for their recovery efforts which are ultimately for the benefit of the people of Malaysia,” they said.