Singapore Court Allows $2.7 Billion 1MDB Lawsuit Against Standard Chartered to Proceed

A major legal battle tied to the 1MDB corruption scandal is moving forward after the Singapore High Court rejected Standard Chartered Bank’s attempt to strike out a $2.7 billion lawsuit. The case, brought by liquidators seeking to recover misappropriated 1MDB funds, alleges that the bank played a role in enabling fraudulent transactions linked to Malaysia’s state investment fund more than a decade ago.

According to the liquidators, the ruling marks a significant step in ongoing global efforts to reclaim assets stolen from 1Malaysia Development Berhad. They argue that the bank permitted more than 100 intrabank transfers between 2009 and 2013 that helped obscure the movement of billions in stolen funds. Some of these transactions allegedly flowed into the personal account of former Malaysian Prime Minister Najib Razak, who is currently serving a six-year prison sentence for corruption tied to the scandal.

The liquidators insist the bank ignored clear warning signs, contributing to losses exceeding $2.7 billion. They also emphasized their commitment to recovering assets that “rightfully belong to the people of Malaysia.” The lawsuit is part of a wider, long-running global investigation into the 1MDB scandal, which U.S. authorities estimate saw about $4.5 billion diverted through a complex web of international transactions. Multiple countries, including Singapore and Switzerland, have launched investigations that have implicated government officials and major financial institutions such as Goldman Sachs.

Standard Chartered has pushed back strongly against the allegations, saying it disagrees with the court’s decision and plans to appeal. The bank claims the accusations lack merit and were initiated by shell companies that themselves misappropriated funds. It says it reported suspicious activities linked to these accounts before shutting them down in early 2013, stressing its commitment to combating financial crime.

Malaysia has recovered roughly 29 billion ringgit ($7.01 billion) in 1MDB-related assets between 2019 and early 2024. Singapore previously fined Standard Chartered S$5.2 million in 2016 for money laundering breaches tied to the scandal.