The suit in Singapore is part of 1MDB's worldwide efforts to recover misappropriated funds back to the company.
KUALA LUMPUR (Aug 29): The High Court of Singapore has dismissed an application by BSI Bank Ltd to strike out the US$394 million (RM1.71 billion) claim brought against the bank by 1Malaysia Development Bhd (1MDB) and its subsidiary Brazen Sky Ltd.
1MDB and Brazen Sky are seeking redress for large-scale financial losses said to be suffered as a result of unauthorised fund transfers and money laundering schemes allegedly orchestrated through accounts at the bank, which is now under liquidation.
"We are pleased this application has been denied and are committed to holding accountable the institutions and individuals involved in misappropriating money from Malaysia’s sovereign wealth fund, while ensuring the recovery and restitution of these assets back to the Malaysian people," a spokesperson for the 1MDB board said in a statement on Thursday.
In the civil suit, which commenced on May 2, 1MDB and Brazen Sky accused BSI and several of its former officers of facilitating the unauthorised fund transfers and money laundering schemes, thus assisting in the misappropriation of 1MDB's assets.
BSI was ordered by the Monetary Authority of Singapore in May 2016 to withdraw its status as a merchant bank in the city-state for serious breaches of anti-money laundering requirements, poor management oversight of the bank’s operations, and gross misconduct by some of the bank’s staff.
The decision was made following three inspections by the regulator — in 2011, 2014, and 2015 — which revealed multiple breaches of anti-money laundering regulations and a pervasive pattern of non-compliance.
The bank has been operating as a merchant bank in Singapore since November 2005 offering private banking services. It is a wholly owned subsidiary of BSI SA, a bank founded in 1873 and headquartered in Switzerland.
The suit in Singapore is part of 1MDB's worldwide efforts to recover misappropriated funds back to the company.
On Wednesday, Switzerland's Federal Criminal Court convicted Patrick Mahony and Tarek Obaid, top executives at Geneva-based oil exploration company PetroSaudi, for embezzling more than US$1.8 billion (RM7.81 billion).
Prosecutors in the case alleged that the duo helped to set up a joint venture with 1MDB by creating the impression that PetroSaudi was backed by the Saudi government, which was in fact not the case.
The court sentenced Obaid and Mahony to seven and six years’ imprisonment, respectively. The judgement also permitted the recovery of US$1.75 billion (RM7.59 billion) to Malaysia. Further, the court ordered that the duo’s assets, totalling US$240 million (RM1.04 billion), be confiscated and restored to 1MDB.
Earlier this year, the Malaysian Anti-Corruption Commission reported that between 2019 and February 2024, a total of RM29.03 billion in 1MDB assets have been recovered both domestically and internationally.
The current chairman of the 1MDB asset recovery taskforce, Datuk Seri Johari Abdul Ghani, said in January that the government was considering initiating legal proceedings against foreign banks linked to the 1MDB scandal.
While the foreign banks were not identified, Johari said the banks did not conduct proper due diligence before facilitating fund transfers related to the sovereign fund.