1MDB to proceed with $515 million legal claim against BSI Bank
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Earlier, on Aug 28, PetroSaudi’s Patrick Mahony (left) and Tarek Obaid were found guilty of fraud for their roles in a scam to defraud 1MDB.
PHOTO: AFP
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KUALA LUMPUR – 1Malaysia Development Berhad (1MDB) said its legal claim against BSI Bank will proceed after Singapore’s High Court dismissed the bank’s application to strike out the case.
1MDB and its subsidiary, Brazen Sky, are seeking US$394 million (S$515 million) from BSI Bank for the losses it suffered from schemes orchestrated through accounts at the bank, which was placed under liquidation in 2017.
“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,” a spokesman for the 1MDB board said in a statement.
BSI Bank acted in breach of its duty to exercise reasonable skill and care in executing Brazen Sky’s instructions and the operation of the account, according to 1MDB’s statement of claim in May.
The legal claim is part of ongoing global efforts to recover billions of dollars of misappropriated funds, according to 1MDB.
More than US$7.5 billion in total was stolen from 1MDB and its subsidiary companies, it said in its statement of claim filed in Singapore’s High Court in May.
On Aug 28, two businessmen in Geneva were found guilty of fraud by a Swiss court
PetroSaudi chief executive Tarek Obaid was sentenced to seven years in prison
The multi-year prison sentences were justified, the court said in a statement released later, given “the very high amounts involved, the intensity of the criminal activity”, and the defendants’ “selfish motive”. The court also ordered the men to compensate 1MDB for the funds that were diverted, return part of the assets under seizure, and to have some of their assets confiscated.
The court said after the ruling that it rejected the prosecutors’ request for the pair to be immediately detained, saying there was not enough concrete evidence to determine they were a flight risk.
Both men can appeal the verdicts and the sentences before they come into force.
Ms Myriam Fehr-Alaoui, Obaid’s lawyer, said her client would appeal.
“Many essential elements presented by the defence were not taken into consideration, and we deplore that,” she said.
The verdict is “shocking”, and Mahony will also appeal, his lawyer, Mr Laurent Baeriswyl, said.
The court refused to hear all the witnesses for the defence without providing justification, and rendered a decision that “took no account” of evidence that exonerates him.
Still, the decision is a win for Swiss prosecutors, who secured a criminal conviction against Credit Suisse in 2022, and want to demonstrate that Switzerland is not a soft touch on white-collar crime.
Jho Low, the alleged mastermind behind the defrauding of 1MDB, remains at large.
Two Goldman Sachs Group bankers were embroiled in the scandal and the bank paid US$2.5 billion as part of a 2020 settlement with the Malaysian government over its role.
The board of 1MDB issued a statement saying it welcomes the decision, as it means the pair “will face justice for their role in embezzling and defrauding the people of Malaysia”.
“We will continue to pursue those responsible for the looting of 1MDB and recover our nation’s rightful assets, wherever they may be,” it said. BLOOMBERG
