Singapore High Court blocks bid from 1MDB liquidators to sue Standard Chartered, BSI Bank

SINGAPORE: Efforts from foreign liquidators to sue Standard Chartered Bank and BSI Bank in Singapore over transactions that are said to be connected to 1Malaysia Development Berhad (1MDB), Malaysia’s sovereign wealth fund, were barred by the High Court.

According to High Court judge Aidan Xu, the lawsuit from the liquidators should be dismissed. He said on Wednesday (Oct 1) that since the alleged transactions occurred before 2018, Singapore’s cross-border insolvency framework, as laid out in the Insolvency, Restructuring and Dissolution Act, cannot be applied to the case.

Justice Xu cited Article 23(9) of the law, which disallows foreign liquidators from challenging transactions before the law came into effect, no matter how dubious they seem. Should the law be changed, he added, it should come from Parliament, and not the courts.

The 1MDB scandal, which began to be exposed in Malaysia’s as well as in the international press in 2015, has been called one of the biggest financial scandals in the world.

In 2016, it was called the “largest kleptocracy case to date” by the United States Department of Justice. According to Malaysian and US authorities, a total of US$4.5 billion (approximately S$6 billion) was siphoned out of 1MDB between 2009 and 2014.

The liquidators from Blackstone Asia Real Estate Partners and Brazen Sky had endeavoured to reverse suspicious transfers through avoidance claims. This strategy is often used by creditors in an attempt to recover assets. Both firms have been implicated in the 1MDB scandal.

The firms have said they are looking into possible workarounds with counsel in their efforts to recover 1MDB funds, which may include an appeal against the court’s decision.

One of the liquidators, Angela Barkhouse, was quoted by Reuters as saying, “We remain undeterred in our mission to seek recovery from those who are responsible (or) facilitated the fraud to maximise recoveries for Malaysia.”

In 2022, former Malaysian Prime Minister Najib Razak was given a 12-year jail sentence, having been convicted of graft in a case linked to 1MDB. However, a pardons board led by the King of Malaysia later cut the sentence in half.

Last November, a Malaysian court allowed corruption charges linked to the 1MDB scandal against Najib to be dropped. Charges were also dropped for the former treasury secretary-general, Irwan Serigar Abdullah. Najib and Irwan were given a discharge not amounting to acquittal (DNAA).

On Oct 24, 2024, Najib issued an apology for having mishandled the 1MDB, although both he and Irwan have consistently maintained that they’ve done nothing wrong in relation to the fund.

“It pains me every day to know that the 1MDB debacle happened under my watch as minister of finance and prime minister. For that, I would like to apologise unreservedly to the Malaysian people,” he wrote in a letter read by his son at a press conference. /TISG

Read also: Malaysia recovers another RM39.1 million linked to Jho Low in ongoing 1MDB asset repatriation