23-05-2025
Luxembourg bank fined €25 million over 1MDB scandal
Published on: Friday, May 23, 2025
Published on: Fri, May 23, 2025
By: AFP Text Size: Edmond de Rothschild bank said the employees involved in the events that took place 15 years ago are no longer part of the organisation. (Reuters pic) LUXEMBOURG: A Luxembourg court fined Edmond de Rothschild bank €25 million (RM120.66 million) on Thursday for its role in a money-laundering scandal in which Malaysian wealth fund 1MDB 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 involving the misappropriation of money from 1MDB. The fund, created in 2009 as then prime minister Najib Razak sought to modernise Malaysia, soon found itself embroiled in corruption allegations, leading to a swathe of investigations notably in Switzerland, Singapore and the US. '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. An investigation that was 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'.
Advertisement 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 … (which was) completed in 2019.' 'The employees involved are no longer part of the organisation,' the statement read. Najib, 71, who served as prime minister from 2009 to 2018, was found guilty two years later of abuse of power and misappropriation of funds. The 1MDB scandal essentially cost him the 2018 general election as well. He was initially sentenced to 12 years in prison 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. Two other investigations are ongoing, one concerning the Emirati client and his companies, and the other targeting executives and employees of Edmond de Rothschild Europe. * Follow us on our official WhatsApp channel and Telegram for breaking news alerts and key updates! * Do you have access to the Daily Express e-paper and online exclusive news? Check out subscription plans available.
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