The Strategist

Malaysia's 1MDB sues JPMorgan and Deutsche Bank

05/11/2021 - 03:32

Malaysian state-owned investment fund 1Malaysia Development Berhad (1MDB) has sued German Deutsche Bank, US-based JPMorgan and UK-based Coutts in a court in Kuala Lumpur. This was reported by Reuters, citing court documents.

The investment fund accuses the banks of "negligence, breach of contract, conspiracy to defraud and damage and/or aiding and abetting unfair practices". 1MDB is seeking compensation of $1.1bn from Deutsche Bank's Malaysian unit, $1bn from Coutts' Swiss unit and $800m from JPMorgan's Swiss unit.

Recall that 1MDB was at the centre of a major corruption scandal in 2015, which eventually resulted in the collapse of the investment fund. An investigation revealed corruption schemes involving senior Malaysian officials, $700 million of which was found in the personal accounts of then Malaysian Prime Minister Najib Razak, with part of the public fund used to bribe foreign officials. In October last year, Hong Kong fined Goldman Sachs Bank $350 million for omissions and insufficient anti-money laundering in connection with 1MDB.

Malaysia's Ministry of Finance said on Monday that a total of 22 lawsuits have been filed against individuals and entities in connection with the case, with 1MDB seeking to recover a total of $23 billion in assets. According to Reuters, which had court documents in its possession, 1MDB did not specify the role of the named banks in the scandal surrounding the fund.