Standard Chartered faces $2.7 billion legal action over fraud allegations from Malaysia's 1MDB fund
According to the agency report, Standard Chartered has rejected the claims of its involvement in any form of enabling fraud. The sovereign wealth fund has filed the case in a Singapore court.
The liquidators are trying to recover money that belongs to 1MDB. Of the total money that is expected to be recovered, nearly $4.5 billion was stolen between 2009 and 2014 in a complex, globe-spanning scheme, as per the US investigators cited in the agency report.
1MDB liquidators from the financial services firm Kroll are seeking to hold Standard Chartered accountable for allegedly enabling fraud against 1MDB. Three companies which are involved in the liquidation of 1MDB reportedly claimed that Standard Chartered permitted over 100 intrabank transfers between 2009 and 2013 that helped conceal the flow of stolen funds.
'According to this lawsuit, the transfers demonstrate serious breaches and control failings which ultimately enabled the theft of public funds by people operating at the highest levels of the Malaysian government during that period,' they said, reported the news agency.
As per the report, the institutional lender has not received any legal filing documents. 'Any claims by these companies are without merit and Standard Chartered will vigorously defend any lawsuit commenced by the liquidators,' they told the news agency.
The report also highlighted that the liquidators of 1MDB alleged that the firms involved were shell companies with no legitimate business and were linked to alleged 1MDB's Low Taek Jho, a mastermind and fugitive who denied any wrongdoing.
The liquidators also claimed that the funds flowing through the Standard Chartered accounts included transfers to the personal bank account of former Malaysian Prime Minister Najib Razak. Razak is serving a six-year prison sentence after being convicted of graft linked to 1MDB.
The transfer of funds is also allegedly involved in business payments and purchases of jewellery and luxury goods for Razak's wife and stepson, reported the new agency, citing the liquidators.
At least six countries, including Singapore and Switzerland, have launched investigations into 1MDB dealings in a global investigation. However, the Board of 1MDB welcomed the move by the court-appointed liquidators.
'The Malaysian people were the true victims of this global fraud, and all parties are determined to hold every facilitator to account - including financial institutions that failed in their most basic duties of vigilance and responsibility,' a spokesperson of the board told the news agency.

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