Singapore High Court Allows $3.5 Billion 1MDB Lawsuit Against Standard Chartered to Proceed
The Singapore High Court has cleared the path for a massive US$2.7 billion (S$3.5 billion) lawsuit against Standard Chartered Bank to move forward, dismissing the bank’s attempt to strike out the claim linked to the 1MDB scandal.
Key Developments
- Singapore High Court rejects Standard Chartered’s application to dismiss $3.5 billion lawsuit
- Case involves liquidators of three 1MDB-linked entities seeking recovery of stolen funds
- Standard Chartered disagrees with decision and plans to appeal
- Lawsuit alleges bank processed over 100 suspicious transfers between 2009-2013
Bank’s Response and Legal Position
Standard Chartered told The Straits Times that it “disagrees with the decision and will be filing an appeal.” The bank now faces a full trial over allegations it facilitated money laundering activities connected to the Malaysian state fund.
Liquidators’ Allegations
Court-appointed liquidators Angela Barkhouse and Toni Shukla from Kroll allege that Standard Chartered permitted more than 100 intra-bank transfers that helped conceal the movement of stolen 1MDB funds. They claim the bank ignored clear red flags and breached Singapore’s anti-money laundering controls.
The liquidators contend these actions resulted in losses exceeding US$2.7 billion plus S$20 million in public funds.
Notable Transactions Cited
Among the specific transactions highlighted in the lawsuit:
- US$150 million transfer from Blackstone account to former Malaysian PM Najib Razak’s personal account
- Payments totaling over US$135 million funding luxury purchases by Najib’s wife, Rosmah Mansor
- US$77.02 million payment from Brightstone account to jewellery, watch and bag vendors
Previous Regulatory Action
In 2016, the Monetary Authority of Singapore had already penalized Standard Chartered S$5.2 million for anti-money laundering violations related to 1MDB. The current lawsuit represents a much larger financial claim against the bank.
Broader 1MDB Scandal Context
The Singapore case is part of international efforts to recover assets siphoned from 1MDB. Liquidators expressed satisfaction with the court’s decision, stating: “This enables us to press ahead in holding financial institutions and individuals accountable for their roles in the misappropriation of 1MDB funds and to continue recovering assets that belong to the people of Malaysia.”
The lawsuit follows a separate September High Court decision that prevented foreign liquidators from suing Standard Chartered and BSI Bank over pre-2018 transactions, based on Singapore’s cross-border insolvency framework limitations.
1MDB Background and Najib’s Conviction
1MDB, co-founded by Najib Razak in 2009, has been investigated in at least six countries over the alleged misappropriation of over US$4.5 billion. Malaysia’s top court in 2022 upheld Najib’s guilty verdict for corruption and money laundering, sentencing him to 12 years in prison for illegally receiving about US$10 million from former 1MDB unit SRC International.
Najib, 72, has consistently denied wrongdoing and maintained he had no knowledge of illegal transfers. His sentence was later reduced by a pardons board.
