1MDB files $515 million lawsuit against BSI Bank

KUALA LUMPUR – 1Malaysia Development Berhad (1MDB) announced that its lawsuit against BSI Bank will continue after the High Court of Singapore dismissed the bank’s application to dismiss the case.

1MDB and its subsidiary Brazen Sky are demanding US$394 million (S$515 million) in compensation from BSI Bank for losses they suffered as a result of schemes orchestrated through accounts of the bank, which was liquidated in 2017.

“We are pleased that this request has been rejected and are committed to holding the institutions and individuals involved in the misappropriation of funds from the Malaysian sovereign wealth fund accountable, while ensuring the recovery and return of these assets to the Malaysian people,” a 1MDB board spokesperson said in a statement.

According to 1MDB's complaint in May, BSI Bank breached its duty to exercise reasonable skill and care in carrying out Brazen Sky's instructions and maintaining the account.

According to 1MDB, the lawsuit is part of an ongoing global effort to recover billions of dollars in embezzled funds.

In total, more than $7.5 billion was stolen from 1MDB and its subsidiaries, according to the lawsuit filed in Singapore's Supreme Court in May.

On August 28, two businessmen in Geneva were found guilty of fraud by a Swiss court for their involvement in a $1.8 billion fraud against 1MDB.

A spokeswoman for the Swiss Federal Criminal Court said PetroSaudi boss Tarek Obaid was sentenced to seven years in prison and his colleague Patrick Mahony to six years. They were also accused of criminal mismanagement and serious money laundering.

The multi-year prison sentences were justified, the court said in a statement released later, given “the very high amounts, the intensity of the criminal activity” and the “selfish motive” of the defendants. The court also ordered the men to compensate 1MDB for the embezzled funds, return some of the seized assets and have some of their assets confiscated.

After the verdict was announced, the court announced that it had rejected the prosecution's request for the two to be immediately detained because there was insufficient concrete evidence of a risk of them fleeing.

Both men can appeal the verdicts and sentences before they become final.

Myriam Fehr-Alaoui, Obaid's lawyer, said her client would appeal.

“Many essential elements put forward by the defense were not taken into account and we regret that,” she said.

The verdict was “shocking” and Mahony will appeal, said his lawyer Laurent Baeriswyl.