1MDB Scandal Grows: New $2.7 Billion Lawsuit Hits StanChart
In the latest news in the long-lasting 1MDB scandal, Standard Chartered has been sued by liquidators of related companies for its alleged role in enabling money flows.
Standard Chartered in Singapore has been sued by liquidators from financial services firm Kroll for its alleged role in the 1MDB scandal, according to a statement. Three companies in liquidation – Alsen Chance Holdings, Blackstone Asia Real Estate Partners and Brightstone Jewellery – have commenced legal proceedings against the bank in a high court in the city-state.
The bank is accused have permitting over 100 intrabank transfers between 2009 and 2013 that «helped conceal the flow of stolen funds and chose to overlook obvious red flags in relation to the transfer of funds» resulting in losses of more than $2.7 billion.
Luxury Goods, Movie Production Company
The liquidators alleged that $150 million was disbursed directly to the personal bank account of ex-Malaysian Prime Minister Najib Razak, who is serving a six-year prison sentence for a 1MDB-related corruption conviction. Tens of millions of dollars also flowed to Najib’s wife, Rosmah Mansor, for the purchase of jewelry and luxury goods, as well as a movie production and distribution company controlled by stepson Riza Aziz.
«According to the Claimants, these amounts, along with the nature of the money flows, evidence how Standard Chartered Bank had failed to conduct the anti-money laundering safeguards that would have been expected of it,» the statement said.
«We are pleased to see the Court-appointed liquidators taking action which will benefit the victims of the fraud, including 1MDB,» added a spokesperson for the board of 1MDB. «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.»
Bank Response
In response, Standard Chartered said the liquidators had publicly stated earlier that the firms involved were shell companies with no legitimate business and were linked to alleged 1MDB mastermind Low Taek Jho, also known as Jho Low, and his associate Eric Tan Kim Loong who are both currently on the run. It claims that the companies operated under false pretenses, and acted as a conduit for funds misappropriated from 1MDB to launder monies.
«Any claims by these companies are without merit and Standard Chartered will vigorously defend any lawsuit commenced by the liquidators,» the bank said, adding that it had not yet received any legal filing documents.
The latest lawsuit marks another chapter in the 1MDB scandal which implicated at least six countries, including Singapore and Switzerland, as well as Goldman Sachs, its former executives and individuals outside the financial industry such as Fugees rapper Pras. In 2016, the Monetary Authority of Singapore imposed S$5.2 million in penalties against Standard Chartered for money laundering breaches but did not find «wilful misconduct».
