Singapore court clears way for US$2.7 billion suit against StanChart in 1MDB scandal-linked claim
Claims involve an alleged US$150 million deposit to Najib Razak and US$77 million for his wife Rosmah Mansor’s bags and jewellery
[SINGAPORE] The High Court has dismissed an application by Standard Chartered Bank Singapore (StanChart) to strike out a US$2.7 billion claim linked to the 1Malaysia Development Bhd (1MDB) scandal.
In July, the bank “emphatically” rejected any claims made by the liquidators for three companies: Alsen Chance Holdings, Blackstone Asia Real Estate Partners and Brightstone Jewellery.
Together, they allege that StanChart permitted over 100 intrabank transfers between 2009 and 2013 that “helped conceal the flow of stolen funds” and it “chose to overlook obvious red flags” in relation to the transfers.
“Standard Chartered disagrees with the decision and will be filing an appeal,” said a spokesperson for the bank in an e-mailed statement.
StanChart is accused of failing to comply with Singapore’s anti-money laundering regulations and client due diligence rules when permitting and/or facilitating these transactions.
Through such transfers, the claimants said they lost over US$2.7 billion and S$20 million in public funds.
Examples of the transactions provided by the claimants include US$150 million worth of transfers from the account held by Blackstone directly to the personal bank account of Najib Razak, the former prime minister of Malaysia who has since been jailed for corruption and money laundering.
Other examples were US$4.7 million transferred from the account held by Blackstone; US$53.4 million transferred from an account held by Alsen Chance; and US$77 million transferred from the account held by Brightstone to jewellery, watch, and bag vendors for the luxury goods purchases of Rosmah Mansor, Najib’s wife.
In 2016, the Monetary Authority of Singapore imposed financial penalties worth S$5.2 million on StanChart in relation to 1MDB-related fund flows.
“We are pleased that this application has been dismissed,” said the court-appointed liquidators, Angela Barkhouse and Toni Shukla. Both Barkhouse and Shukla are part of financial and risk advisory firm Kroll.
“This dismissal enables us to continue our efforts to hold financial institutions and individuals accountable who were involved in misappropriating money from 1MDB.”
The liquidators were previously reported as saying that the three companies were shell companies with no legitimate business and were linked to fugitives Low Taek Jho and his associate Eric Tan Kim Loong.
The latest announcement follows a September High Court decision to prevent foreign liquidators from suing StanChart and BSI Bank over transactions allegedly linked to the 1MDB scandal. The court ruled then that Singapore’s cross-border insolvency framework cannot be applied to deals executed before the law took effect in 2018.
The liquidators of Blackstone Asia Real Estate Partners and Brazen Sky had sought to bring avoidance claims – a legal mechanism allowing liquidators to reverse suspect transactions and recover assets improperly transferred from creditors – against the banks in Singapore.
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