Standard Chartered Bank Faces $2.7 Billion Dollar Lawsuit Over 1MDB Scandal

In a significant development within the financial sector, Standard Chartered Bank is confronting a massive $2.7 billion lawsuit related to the infamous 1MDB scandal. The legal action, filed in Singapore’s High Court, centres on allegations that the British banking giant failed to implement proper anti-money laundering protocols.

Court-appointed liquidators from Kroll have launched the lawsuit on behalf of three companies linked to the Malaysian sovereign wealth fund. The FTSE 100 lender allegedly permitted more than 100 intrabank transfers that facilitated the concealment of misappropriated funds between 2009 and 2013.

The case highlights transactions involving former Malaysian Prime Minister Najib Razak, including transfers to his personal account and luxurious purchases for his wife. Standard Chartered has strongly rejected these claims, stating they are “without merit” and emphasising their intention to mount a vigorous defence.

This legal challenge marks the latest chapter in the sprawling 1MDB scandal, which has already resulted in significant repercussions across the global financial sector. Goldman Sachs previously settled related matters for billions of dollars with authorities in Malaysia, the United States, Britain, and Singapore.

Standard Chartered’s history with regulatory compliance has been problematic, having paid over $1.7 billion in penalties to UK and US authorities in 2012 and 2019 for sanctions violations. The bank’s share price responded negatively to the news, dropping 1.5 per cent to £11.89½ in London trading.

The scandal, which led to the imprisonment of former Prime Minister Najib Razak, allegedly saw more than $4 billion misappropriated from the sovereign wealth fund. The scheme’s reported mastermind, Malaysian businessman Jho Low, remains at large as a fugitive from justice.