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S'pore court allows 1MDB's US$394m claim against BSI to proceed
The High Court in Singapore today dismissed BSI Bank Limited’s application to strike out 1Malaysia Development Berhad’s (1MDB) claim against it, involving the sum of US$394 million (RM1.7 billion).
The claim alleges that BSI and several of its former officers had facilitated unauthorised fund transfers and money laundering schemes in the misappropriation of 1MDB funds.
The High Court in Singapore today dismissed BSI Bank Limited’s application to strike out 1Malaysia Development Berhad’s (1MDB) claim against it, involving the sum of US$394 million (RM1.7 billion).
The claim alleges that BSI and several of its former officers had facilitated unauthorised fund transfers and money laundering schemes in the misappropriation of 1MDB funds.
According to a statement released by the 1MDB board’s lawyers, this action will allow the claim against BSI to proceed.
However, it is still subject to appeal.
“The action forms part of 1MDB’s ongoing global asset recovery efforts to reclaim billions of dollars of misappropriated funds,” the statement read.
It also quoted an unnamed spokesperson for the 1MDB board, who said: “We are pleased this application has been denied and are committed to holding accountable the institutions and individuals involved in misappropriating money from Malaysia’s sovereign wealth fund while ensuring the recovery and restitution of these assets back to the Malaysian people.”
1MDB had channelled US$1.83 billion overseas for joint-venture activities with PetroSaudi International between 2009 and 2011.
This is the same amount that Bank Negara Malaysia later ordered 1MDB to repatriate, which the fund had failed to do and for which it was fined.
Of this sum, US$1.03 billion did not go to the joint venture. It was instead diverted to Good Star Limited’s account at RBS Coutts in Zurich, whose beneficiary owner is fugitive businessperson Low Taek Jho (Jho Low).
READ MORE: The unmaking of 143-year-old bank BSI
More than half of the diverted sum, or US$529 million, was transferred to Abu Dhabi Kuwait Malaysia Investment Corporation’s (BVI) account at BSI Singapore between June 28, 2011 and Sept 4, 2013. The beneficiary owner was also Low.
BSI is under liquidation following an order from the Monetary Authority of Singapore in 2016 to shut down, due to “serious breaches of anti-money laundering requirements, poor management oversight of the bank’s operations, and gross misconduct by some of the bank’s staff”.
‘Seduced by fees’
In March, Kevin Swampillai told the Kuala Lumpur High Court that the Singaporean branch of BSI Bank had been “seduced” by the fee size of transactions involving US$864.5 million (RM4.09 billion) of funds from SRC International.
Swampillai, a former staff at the branch, conceded in retrospect that the transactions (which went through BSI Bank) were shams and done in a way to provide an “optical illusion” of legitimacy to SRC and other relevant stakeholders in Malaysia.
The sham transactions were done at Low’s behest, he added.
In connection with the 1MDB scandal, the Swiss Federal Criminal Court yesterday convicted former Petrosaudi International Ltd executives Tarek Obaid and Patrick Mahony for their roles in embezzling 1MDB funds.
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