KUALA LUMPUR (Nov 24): Standard Chartered has failed to get a lawsuit linked to the 1Malaysia Development Bhd (1MDB) scandal thrown out of court in Singapore.

The decision by the Singapore High Court means that the case, which seeks US$2.7 billion from Standard Chartered (StanChart) , can now proceed in full. “We are pleased that this application has been dismissed,” said the liquidators representing three 1MDB subsidiaries in the suit.

The suit filed on June 30 by court-appointed liquidators Angela Barkhouse and Toni Shukla on behalf of Alsen Chance Holdings Ltd, Blackstone Asia Real Estate Partners Ltd and Brightstone Jewellery Ltd builds on ongoing efforts to recover billions of dollars of misappropriated funds.

The liquidators alleged that between 2009 and 2013, StanChart permitted more than 100 intrabank transfers that concealed the movement of stolen funds and ignored “obvious red flags” of suspicious activities.

The dismissal allows the liquidators to “continue our efforts to hold financial institutions and individuals accountable who were involved in misappropriating money from 1MDB,” the liquidators added.

“Standard Chartered disagrees with the decision and will be filing an appeal,” a spokesperson with the bank said in a statement to The Edge.

Headquartered in London, StanChart again rejected any claim made by the 1MDB companies, noting that the liquidators were representing shell companies with no legitimate business.

StanChart said it will vigorously defend itself against the claims made “without merit” by the “fraudulent entities” in an updated statement on Tuesday.

The bank said it had reported activities of the companies before shutting their accounts in early 2013. “We take our responsibility to fight financial crime extremely seriously, in service of our clients and the markets in which we operate,” StanChart added.

1MDB, created by former prime minister Datuk Seri Najib Razak in 2009, has been embroiled in graft and money-laundering investigations spanning more than a dozen jurisdictions from the US to Switzerland and from the United Arab Emirates to Singapore.

Najib himself has since been found guilty in a case involving 1MDB’s former subsidiary, and was sentenced to 12 years' jail and fined RM210 million. He has been granted a partial pardon, which reduces his prison term to six years and fine to RM50 million.

Malaysian authorities said they have recovered RM29.03 billion in 1MDB-linked assets both domestically and abroad between 2019 and February 2024. Singapore remains a key jurisdiction in global efforts to trace and recover funds siphoned from 1MDB.

The liquidators are claiming that 1MDB subsidiaries lost public funds, including US$150 million transferred to Najib’s personal bank account and over US$135 million channelled to luxury goods vendors for his wife Rosmah Mansor, when StanChart violated Singapore’s laws.

Separately, the liquidators are also pursuing a US$394 million claim against BSI Bank Ltd. The High Court of Singapore had earlier also dismissed an attempt by BSI Bank to strike out the claim filed by 1MDB and its subsidiary Brazen Sky Ltd.

That suit accuses BSI Bank — which was shut down by the Monetary Authority of Singapore in 2016 for serious anti-money laundering breaches — and several of its former officers of facilitating unauthorised fund transfers and money laundering schemes connected to 1MDB’s assets.

The latest development is separate from another proceeding in Singapore’s legal system where the liquidators were pursuing the so-called avoidance claims against StanChart and BSI Bank.

On Oct 1, Singapore’s High Court curtailed the ability of foreign liquidators to utilise avoidance claims — legal actions that allow liquidators to reverse improper transfers — limiting such claims against banks to transactions carried out before the law came into force in 2018.

1MDB had said it would explore possible workarounds, including the option of appealing.