Standard Chartered Slammed with $2.7 Billion Lawsuit Over 1MDB Scandal

A media agency report indicates that Standard Chartered Plc is currently facing a $2.7 billion lawsuit from liquidators who claim that the company was involved in the diversion of billions of dollars that were misappropriated from Malaysian sovereign wealth fund 1MDB.

The lawsuit, which was filed in Singapore on 30 June, is the most recent effort to recoup funds that were seized from 1MDB as part of a ten-year investigation that has involved several of the biggest institutions in the world.

According to a statement issued on July 1, liquidators filed a lawsuit against the Singapore-based bank with its headquarters in the United Kingdom. According to the bank's statement provided to a media house, the claim documents have not yet been received.

It added that the liquidators had openly declared the 1MDB businesses to be "shell companies with no legitimate business" and that it "emphatically rejects any claims" made by them.

Standard Chartered Rejecting the Claims

However, the Standard Chartered stated that the bank will strongly defend any litigation brought by the liquidators and that any claims made by these firms are without merit. StanChart went on to say that it had invested much in its anti-money laundering procedures and processes.

According to the bank, Standard Chartered closed these accounts in 2013, disclosed the 1MDB entities' transaction activities, and provided the investigating authorities with full cooperation.

According to the claims, Standard Chartered Bank allowed over 100 intrabank transfers between 2009 and 2013, which aided in hiding the movement of money that had been stolen. The liquidators' statement stated that these transactions resulted in the claimants losing almost $2.7 billion and the government losing S$20 million ($15.7 million).

1MDB Scandal

With an estimated $4 billion in stolen funds, the 1MDB scam was one of the worst financial scandals in history. Najib Razak, the prime minister of Malaysia at the time, was also prosecuted as a result of the scam.

He was found guilty and given a six-year prison term. Several of the largest banks in the US, Europe, and Asia were also engaged. The disgraced former Goldman Sachs banker at the centre of the scandal, Tim Leissner, was given a two-year prison sentence by a federal court in Brooklyn last month.

According to a media report, liquidators at the financial services company Kroll, which is in charge of organising the 1MDB recovery efforts, have discovered that over $2.7 billion passed through StanChart accounts, including payments to Najib and purchases of jewellery and upscale goods for his family.

In 2016, Standard Chartered was fined S$5.2 million by Singaporean authorities for anti-money laundering violations associated with the case. Fines were also imposed on other banks.