KUALA LUMPUR (May 15): The Singapore High Court has allowed the winding-up of several British Virgin Islands (BVI) entities linked to the 1Malaysia Development Bhd (1MDB) scandal, enabling liquidators to pursue statutory claims against Standard Chartered Bank Singapore and BSI Singapore in Singapore.
In a statement on Friday, Angela Barkhouse and Toni Shukla, joint liquidators of certain BVI entities, said 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.
They said with the local winding-up orders granted, relevant statutory claims against Standard Chartered Bank Singapore and BSI Singapore will be filed in short order.
“The statutory claims will be pursued in addition to other ongoing claims brought against these banks, which include claims for dishonest assistance, breach of the banks’ duties of reasonable skill and care, and/or breach of their banking mandate, in respect of the companies now entering liquidation in Singapore,” they said.
The names of the BVI-incorporated entities allowed to be wound up in Singapore were not disclosed in the statement on Friday.
The move comes after the Court of Appeal ruled in March that foreign liquidators cannot sue Standard Chartered Bank and BSI Bank over 1MDB-related transactions that occurred before Singapore’s cross-border insolvency framework took effect in 2018–2020.
The case involves older transactions that fall outside the scope of the newer insolvency laws.
“The overall objective is to recover assets from the individuals and institutions our investigations have identified as having culpability for the misappropriation of assets from the companies, assets which are ultimately traceable to funds which were originally meant to benefit the people of Malaysia but were siphoned off,” they said.
In earlier statements, Barkhouse and Shukla represented themselves as foreign representatives (joint liquidators) of Blackstone Asia Real Estate Partners Ltd and Brazen Sky Ltd.
A prior Singapore High Court judgement dismissing BSI Bank and Standard Chartered’s bid to intervene in the winding-up application also listed Alsen Chance Holdings Ltd and Brightstone Jewellery Ltd as companies that applied for winding-up.
All four companies are currently in liquidation in the BVI.
Standard Chartered maintains claims are ‘unmeritorious’
Standard Chartered, meanwhile, maintained its position that the claims of the BVI incorporated entities are “unmeritorious” and the bank will “vigorously defend against their attempts to now obtain from the bank the money they paid away”.
“More than 13 years ago, these shell companies deceived the bank and abused its services by using their accounts to launder money misappropriated from 1MDB,” a Standard Chartered spokesperson said in an emailed statement to The Edge on Friday.
“Our position on these unmeritorious claims remains unchanged as set out in our statement on our website,” the spokesperson added.
In the referred statement that was issued in July last year, Standard Chartered said these companies operated under false pretenses and acted as a conduit for funds misappropriated from 1MDB to launder monies.
“The transactions at issue date back to 2010. We reported the transaction activities of these companies, both before and at the time we shut their accounts in early 2013, and fully cooperated with the investigating authorities,” the statement read.
Citing a Monetary Authority of Singapore statement in December 2016 on its imposition of a financial penalty of S$5.2 million on Standard Chartered for 1MDB-related issues, Standard Chartered said the central bank identified regulatory breaches but did not find “pervasive control weaknesses or wilful misconduct”.