Singapore’s High Court opened the door to a major legal challenge against Standard Chartered, clearing the way for liquidators connected to the 1MDB scandal to pursue a multibillion-dollar claim. The ruling marks a significant turn in the years-long effort to recover money allegedly stolen from Malaysia’s sovereign wealth fund.
Liquidators filed the lawsuit in June, arguing that the bank helped enable a network of fraudulent transfers linked to the 1MDB scheme. They welcomed the court’s decision and said it strengthens their attempt to trace and return assets that “belong to the people of Malaysia.”
A renewed push to recover billions tied to 1MDB
The suit accuses Standard Chartered of allowing more than 100 intrabank transfers between 2009 and 2013 that concealed the movement of stolen funds. According to the liquidators, those transfers formed part of a larger operation in which U.S. investigators say roughly $4.5 billion disappeared between 2009 and 2014. They say some of the money moved through Standard Chartered accounts before allegedly reaching the personal bank account of former Malaysian Prime Minister Najib Razak, who is now serving a six-year prison sentence.
Standard Chartered pushed back against the accusations. The bank said it disagreed with the ruling and plans to appeal. It also claimed the lawsuit was filed by “shell companies that misappropriated funds from 1MDB,” arguing that it reported the suspicious transactions before closing their accounts in early 2013. The bank added that it maintains strict compliance standards and treats financial-crime obligations “extremely seriously.”
The High Court dismissed Standard Chartered’s attempt to strike out the case, allowing the litigation to continue. The liquidators’ claims add to an international wave of investigations into the 1MDB scheme. Authorities in at least six countries, including Singapore and Switzerland, have examined transfers linked to the scandal. Several bankers and high-level officials have faced charges or convictions, and Malaysia says it has recovered 29 billion ringgit — about $7 billion — since 2019.
Singapore previously imposed penalties on Standard Chartered’s local unit in 2016 for anti-money laundering failures connected to 1MDB. As the case advances, the new lawsuit may test how far banks can be held responsible for oversight lapses tied to one of the largest financial scandals in modern history.