Singapore court grants winding up bids for three entities linked to 1MDB scandal
The Singapore High Court has granted winding up applications filed for three entities incorporated in the British Virgin Islands and linked to the multibillion-dollar scandal at Malaysian state fund 1MDB, liquidators recovering assets from the fund said on Friday.
The court decision will enable the liquidators to bring further statutory claims against Standard Chartered Bank and BSI Bank in Singapore over their roles in allegedly facilitating the 1MDB fraud, they said in a statement.
The decision marks the latest legal development in global efforts to recover assets tied to the scandal surrounding Malaysia’s state investment fund, 1Malaysia Development Berhad (1MDB), from which billions of dollars were allegedly misappropriated over several years.
The applications were brought by Angela Barkhouse and Toni Shukla of Kroll Limited, acting as joint liquidators and foreign representatives for the three BVI entities. The liquidators are seeking to recover funds they say were diverted from companies ultimately linked to money intended for the Malaysian public.
In a statement issued following the ruling, Barkhouse and Shukla welcomed the court’s decision, describing it as «a positive step forward in the efforts to hold financial institutions and individuals responsible for their role in the large-scale fraud involving 1MDB.»
Banks Lacked Standing to Oppose the Applications
The ruling follows an earlier Singapore High Court decision rejecting attempts by BSI Bank and Standard Chartered Bank to intervene in the winding up proceedings. The court found the banks lacked standing to oppose the applications and ordered them to pay legal costs.
The newly granted winding up orders are significant because they allow the liquidators to bring statutory claims in Singapore relating to transactions that occurred before the country adopted the UNCITRAL Model Law on Cross-Border Insolvency in 2020. The framework governs how insolvency proceedings involving multiple jurisdictions are handled.
According to the liquidators, statutory claims against Standard Chartered Bank Singapore and BSI Singapore will now be filed «in short order.» Those claims are expected to complement existing litigation against the banks, including allegations of dishonest assistance, breaches of banking duties of reasonable skill and care, and breaches of banking mandates connected to the companies now in liquidation.
«The Singapore Court’s latest decision will allow the Court-appointed liquidators to hold those who facilitated fraudulent acts against the companies fully to account,» the liquidators said.
The liquidators added that their broader objective remains the recovery of assets allegedly siphoned from entities connected to 1MDB and traced through complex international financial transactions.
The 1MDB scandal, one of the world’s largest financial fraud cases, triggered investigations in multiple countries and implicated banks, officials and intermediaries across several jurisdictions. Billions of dollars were allegedly diverted into luxury properties, artwork, entertainment projects and personal accounts.
