Luxembourg bank fined over Malaysian 1MDB fund scandal
LUXEMBOURG: A Luxembourg court on Thursday (May 22) fined Edmond de Rothschild bank €25 million (US$28 million) for its role in a money-laundering scandal in which a Malaysian wealth fund lost billions of dollars.
"This is the first time that a Luxembourg banking establishment has been convicted in a money laundering case," the Grand Duchy's judicial authorities noted following the punishment in the so-called 1MDB affair, which involved the misappropriation of money from 1Malaysia Development Berhad.
The fund, created in 2009 as then Prime Minister Najib Razak set out to modernise Malaysia, soon found itself embroiled in corruption allegations, leading to a swathe of investigations notably in Switzerland, Singapore and the United States.
"A very large portion of the funds raised by 1MDB was siphoned off ... particularly between 2009 and 2013, by the prime minister, Malaysian officials, and others," the court stated.
In Luxembourg, which hosts the European subsidiary of Switzerland's Edmond de Rothschild bank, dozens of accounts opened at the establishment by an Emirati national in the name of a slew of different companies were used to divert money away from the fund.
The investigation, which opened in the Grand Duchy in 2016, "established that through complex international financial flows, funds from 1MDB were ultimately credited to the bank accounts of several of these entities".
Before arriving in the accounts, the cash moved through a number of different financial jurisdictions, including Caribbean tax havens, the court said.
The bank stressed in a statement that the events had taken place "15 years ago" and had led to the "implementation of a comprehensive remediation plan ... completed in 2019".
"The employees involved are no longer part of the organisation," the statement read.
Najib, 71, who served as prime minister until 2018, was found guilty two years later of abuse of power and misappropriation of funds - a case that essentially cost him the 2018 elections.
He was initially sentenced to 12 years' imprisonment in 2020 but the sentence was halved by a pardons board in February last year.
The former prime minister is currently seeking to have his jail term converted to house arrest.
Thursday's judgment closes the case regarding criminal liability of the bank.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNA
10 hours ago
- CNA
BT boss Kirkby expects AI to deepen job cuts, FT reports
(Corrects typographical error in headline) BT Group Chief Executive Allison Kirkby said advances in artificial intelligence could deepen significant job cuts under way at the British telecoms company, the Financial Times reported on Sunday. Kirkby told the newspaper that BT's plans to cull more than 40,000 jobs and strip out 3 billion pounds ($4 billion) of costs by the end of the decade "did not reflect the full potential of AI". "Depending on what we learn from AI . . . there may be an opportunity for BT to be even smaller by the end of the decade," the FT quoted her as saying. Britain's biggest broadband and mobile provider had said in 2023 that it would cut as many as 55,000 jobs, including contractors, by 2030. Its CEO at the time, Philip Jansen, said the company would rely on a much smaller workforce and significantly reduced cost base by the end of the 2020s. Kirkby, who took over from Jansen a year ago, has also opened the door to a possible future spin-off of Openreach, the company's network infrastructure business, the FT said. She said she did not feel the value of Openreach was reflected in the company's share price and if that persisted, BT "would absolutely have to look at options". In an emailed response to Reuters, BT said that Openreach is not something the company is actively looking at right now. It did not provide further comment on Kirkby's FT interview. BT said last month that strong demand for fibre broadband and more than 900 million pounds of cost savings had helped to shore up its full-year earnings and boost cash flow. Resilience at Openreach offset declines in revenue and profit at its business and consumer units, where legacy voice services continued to wane and handset sales fell. ($1 = 0.7372 pounds)
Business Times
10 hours ago
- Business Times
Oil market, long numb to war risk, confronts weekend of worry
The past two years of escalating tensions in the Middle East have taught oil traders to be sanguine about the risk of disruption to oil supplies. The barrage of headlines has revived memories of the political upheavals and prices spikes of the 1970s – and yet even when oil prices have jumped, it inevitably proved short-lived. As Iran and Israel traded volleys of missiles in April last year and again in October, Middle Eastern oil continued to flow to the global market unaffected. Now, the latest assault by Israel is putting oil traders' nonchalance to the test. There's been no impact on supplies so far, but the strikes have shaken a market that for most of this year has been overshadowed by worries about a looming surplus driving down prices, with the Organization of the Petroleum Exporting Countries and its oil producing allies (Opec+) quickly unwinding production cuts and output rising elsewhere from Brazil to Guyana, while US President Donald Trump's trade war threatens demand. Even if many believe that the oil market may ultimately escape unscathed, the widespread uncertainty over how strongly Iran will respond, whether Israel will launch further attacks, and how the US will react is forcing traders to price in a huge range of possible outcomes. With hours left until the end of the trading week, few were brave enough to risk going into the weekend short. Brent futures spiked as much as 13 per cent early on Friday and settled 7 per cent higher at about US$74 a barrel. 'When there's a war on, you're not going to be short anything over the weekend,' said Andreas Laskaratos, chief executive officer of energy trading house AB Commodities. 'Although the fundamentals haven't changed, you can't trade against the headlines over the weekend.' BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Traders and analysts began to game out scenarios for possible escalation or de-escalation almost as soon as the first Israeli missiles hit Iran in the early hours of Friday morning. Laskaratos says his Europe-based traders were at their desks by about 4.30 am or 5.00 am. Analysts at Goldman Sachs raised their oil price forecasts for the coming months US$2-3 a barrel, but laid out possible scenarios ranging from a surge in prices above US$100 a barrel in the worst-case scenario, to a drop below US$50 next year in their most bearish scenario. 'The potential of further escalation in the Middle East implies that the short-term risks to our price forecast are now skewed to the upside,' the analysts including Daan Struyven wrote. Still, they maintained their call for prices to drop below US$60 by the fourth quarter of this year. A surge of trading in out-of-the money call options showed that many were seeking to hedge against the possibility of a price spike. Among the most traded options were call options that would pay out if prices rise above US$85 a barrel by Jun 25; a measure of the price of West Texas Intermediate (WTI) call options relative to the price of put options surged to the highest since March 2022, when the market was rocked by Russia's full-scale invasion of Ukraine. The most worrying possibility for the oil market is a disruption of shipping through the Strait of Hormuz, through which about one-fifth of global oil supply flows. Most analysts reckon that's unlikely. 'It is our understanding that it would be extremely difficult for Iran to close the strait for an extended period given the presence of the US Fifth Fleet in Bahrain,' said Helima Croft, head of global commodity strategy at RBC Capital Markets, and a former CIA analyst. Still, even if small, any increase in the chance of disruption is enough to drive prices. 'The possibility that the Strait of Hormuz closes is such a huge binary event, it makes forecasting balances challenging,' consultancy FGE NexantECA wrote in a report. 'Most market participants we have spoken to are not expecting the Strait of Hormuz to be closed; the consequences are just too great.' Other possible scenarios worrying oil traders include the possibility of strikes on Iran's oil infrastructure or the potential for sanctions against Iran to be ramped up if Teheran responds to the strikes by accelerating its nuclear programme. For now at least, most traders are viewing current events through the lens of recent history. 'For the past decade, events like this have been sell-the-rip situations. They didn't escalate. Fears were worse than what actually happened,' Dan Pickering, chief investment officer at Pickering Energy Partners, an energy-focused investment bank in Houston, wrote on X. The strikes may even turn out to be bearish. Trump on Friday called on Iran to make a deal or face 'even more brutal' attacks. If Teheran were to heed his advice, a nuclear deal would likely involve a relaxation of sanctions, potentially lifting Iran's exports. FGE NexantECA said that market participants were 'looking at the recent price action and starting to consider the events as a 'sell' opportunity'. 'However, they acknowledge that taking a short position right now is hard given the risk/expectation of further escalation in tensions in the weeks ahead.' Even if there is a disruption, Opec+ members Saudi Arabia and the United Arab Emirates have significant spare capacity that could be brought on to potentially help cool prices. 'It would take a lot of courage for someone to go against it but that said, we can't see this rally being sustained in the long term,' said Laskaratos of AB Commodities. 'We don't believe the fundamentals have changed on supply and demand as things stand.' BLOOMBERG
CNA
12 hours ago
- CNA
BT CEO eyes deeper job cuts as AI becomes more powerful, FT reports
BT Group Chief Executive Allison Kirkby said advances in artificial intelligence could deepen significant job cuts under way at the British telecoms company, the Financial Times reported on Sunday. Kirkby told the newspaper that BT's plans to cull more than 40,000 jobs and strip out 3 billion pounds ($4 billion) of costs by the end of the decade "did not reflect the full potential of AI". "Depending on what we learn from AI . . . there may be an opportunity for BT to be even smaller by the end of the decade," the FT quoted her as saying. Britain's biggest broadband and mobile provider had said in 2023 it would cut as many as 55,000 jobs, including contractors, by 2030, with then-CEO Philip Jansen saying the company would rely on a much smaller workforce and significantly reduced cost base by the end of the 2020s. Kirkby, who took over from Jansen a year ago, has also opened the door to a possible future spin-off of Openreach, the company's network infrastructure business, the FT said. She said she did not feel the value of Openreach was reflected in the company's share price and if that persisted, BT "would absolutely have to look at options". BT said last month that strong demand for fibre broadband and more than 900 million pounds of cost savings had helped shore up its full-year earnings and boost cash flow. Resilience at Openreach offset declines in revenue and profits in its business and consumer units, where legacy voice services continued to wane and handset sales fell. ($1 = 0.7372 pounds)
