Standard Chartered Sued for $2.7B Over 1MDB Scandal

 

Malaysia’s scandal-plagued sovereign wealth fund, 1MDB, has intensified its efforts to recover stolen assets with a new $2.7 billion lawsuit filed against Standard Chartered Bank. The lawsuit, brought by liquidators from financial firm Kroll in Singapore’s High Court, accuses the British lender of enabling and concealing massive fraud between 2009 and 2013. The liquidators say Standard Chartered failed to stop over 100 suspicious intrabank transfers that helped funnel funds away from 1MDB, despite numerous warning signs. These funds were allegedly used for personal luxury purchases and routed to accounts tied to former Malaysian Prime Minister Najib Razak, now imprisoned for corruption, as well as his wife and stepson. Standard Chartered strongly denies the accusations, stating it has yet to receive legal documents and plans to vigorously defend itself. The bank further argued that the companies filing the suit are shell entities connected to Jho Low, the alleged mastermind of the fraud, who remains a fugitive. This case is part of a broader effort to hold institutions accountable for one of the world’s largest financial frauds. Malaysian authorities have already recovered $6.92 billion from the scandal, but billions remain unaccounted for. Investigations have spanned at least six countries, including the US, Singapore, and Switzerland. The Board of 1MDB expressed support for the lawsuit, calling it a necessary step to ensure justice and restore public trust, especially from financial institutions that allegedly failed their duties.

Standard Chartered is not new to scrutiny over its ties to the 1MDB fraud. In 2016, Singapore’s Monetary Authority fined its local unit $5.2 million for money laundering breaches linked to the scandal. Although no “wilful misconduct” was found, the regulator identified major failures in customer due diligence and monitoring controls. The new lawsuit revives concerns about the bank’s role during a time when billions of public funds were stolen in what U.S. investigators described as a complex global scheme. The transfers allegedly helped disguise the flow of stolen money through layers of business transactions and luxury purchases, including jewelry and properties. Najib Razak, the former prime minister whose personal account reportedly received some of the funds, is now serving a six-year prison sentence. He and his family continue to deny wrongdoing. Jho Low, the central figure accused of orchestrating the fraud, also denies involvement and remains at large. Standard Chartered is also currently facing a separate $1.9 billion lawsuit in London. That case alleges the bank broke U.S. sanctions against Iran on a wider scale than it had previously acknowledged. With billions still missing from the original $4.5 billion allegedly misappropriated from 1MDB, Malaysia continues to pursue banks and institutions worldwide. The 1MDB Board emphasized the importance of holding all enablers accountablenot just the individuals directly involved. This lawsuit could set a precedent for institutional accountability in global financial crimes, especially involving sovereign funds. As legal proceedings move forward, financial regulators and banks around the world will be watching closely. The Standard Chartered case is one more chapter in the long, complex saga of the 1MDB scandalone that continues to expose weaknesses in global banking systems.

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