Singapore High Court Lets US$2.7 Billion 1MDB Case Against Standard Chartered Proceed

What the Singapore court decided

Singapore’s High Court dismissed Standard Chartered Bank’s application to strike out a civil claim seeking US$2.7 billion in damages linked to the 1MDB scandal. The ruling clears the way for the case to be heard in Singapore, a decision welcomed by the liquidators pursuing funds they say were stolen from Malaysia’s state fund a decade ago. The bank said it will appeal.

The court’s ruling does not decide liability. A strike out application is a preliminary step where a defendant asks a judge to end a case early if the claim is plainly unsustainable or discloses no reasonable cause of action. By allowing the suit to continue, the court signaled that the allegations should be tested with evidence. The parties now move toward disclosure and, unless the appeal succeeds, a full hearing.

Who is suing and what they claim

The case is brought by liquidators acting for three British Virgin Islands entities linked in past investigations to financier Low Taek Jho (Jho Low) and associate Eric Tan: Alsen Chance Holdings, Blackstone Asia Real Estate Partners, and Brightstone Jewellery. The companies, now in liquidation, say they suffered losses exceeding US$2.7 billion during 2009 to 2013.

The claim alleges Standard Chartered permitted more than 100 intrabank transfers that disguised the origin and destination of stolen money, ignored obvious warning signs, and failed to apply Singapore’s anti money laundering rules and client due diligence. The liquidators also cite losses of about S$20 million in public funds routed through the accounts.

Among the flows highlighted are transfers from Blackstone Asia to the personal account of then prime minister Najib Razak that total about US$150 million, and payments made from accounts held by Alsen Chance, Blackstone Asia, and Brightstone to luxury goods vendors. The liquidators say purchases for Najib’s wife, Rosmah Mansor, exceeded US$135 million, including a US$77 million stream to jewellers, watch dealers, and bag retailers. These figures trace some of the best known spending patterns tied to the alleged misappropriation of 1MDB money.

The liquidators, including Angela Barkhouse and Toni Shukla of Kroll, filed the suit in Singapore in June 2025. They argue that the bank’s handling of the accounts and transfers fell below regulatory expectations for screening high risk customers and politically exposed persons, often called PEPs.

How Standard Chartered responds

Standard Chartered rejects the allegations. The bank says the claims are without merit, are brought by shell companies that themselves misappropriated funds, and that it reported the activities of those accounts to authorities before closing them in early 2013. The bank says it invests in controls to detect and deter financial crime and will appeal the High Court decision.

In 2016, Singapore’s central bank, the Monetary Authority of Singapore (MAS), fined the bank’s local unit S$5.2 million for breaches tied to 1MDB related flows. MAS imposed penalties on several other institutions over the same scandal and shut down two private banks for serious lapses. Extensive enforcement and compliance upgrades followed across the sector.

The appeal will run in parallel with case management steps unless the appellate court pauses proceedings. The bank has stated it will continue to defend itself vigorously.

Why this case matters for Malaysia’s asset recovery drive

Malaysia has spent years trying to trace and reclaim money allegedly siphoned from 1Malaysia Development Berhad (1MDB). Authorities say about US$4.5 billion was diverted between 2009 and 2014. By February 2024, Malaysian officials reported the recovery of about 29 billion ringgit, roughly US$7.01 billion, through settlements, asset sales, and seizures in multiple jurisdictions.

Lawsuits against banks form one path to recover additional sums where claimants argue that financial institutions enabled suspicious flows or failed to act on red flags. The High Court decision does not prove those claims. It keeps the door open for testing them in a Singapore forum that sits at the center of the original money trail.

The ruling also sits alongside a separate High Court decision issued earlier that limited foreign liquidators from bringing certain avoidance claims for transactions that took place before 2018. The present suit is different. It is brought by the liquidators of the companies whose accounts were involved, not by foreign liquidators seeking to unwind old transactions under cross border insolvency rules. That distinction helps explain why this action can proceed to the next stage.

The 1MDB scandal, a short background

1MDB was established in 2009 as a state backed investment fund. Investigators in the United States and other countries later described a vast diversion of money that moved through layers of shell companies and bank accounts across several financial centers. Prosecutors and regulators in at least six countries opened cases that implicated senior officials and members of the financial industry.

Najib Razak, who chaired 1MDB’s advisory board during his time as prime minister, is serving a prison sentence after Malaysia’s highest court upheld a conviction in a related case involving SRC International, a former 1MDB unit. His twelve year term was cut to six years by a pardons board. Najib has consistently denied wrongdoing. Evidence presented in various cases and filings ties large transfers to his personal accounts during the 1MDB period.

Financier Jho Low, accused of orchestrating the scheme, remains a fugitive. The scandal brought major consequences for global banks. Authorities closed BSI Bank in Singapore and ordered Falcon Private Bank to exit the market after severe compliance failures. Goldman Sachs reached a US$3.9 billion settlement with Malaysia in 2020 and its former executives Tim Leissner and Roger Ng were convicted in cases tied to 1MDB bond deals.

What the Singapore case could look like from here

Standard Chartered plans to challenge the ruling in the appellate court. Appeals in Singapore typically focus on legal questions, for example whether the claim discloses a recognized cause of action, whether the pleadings are abusive, or whether limitation rules bar the suit. If the bank wins, the claim could be narrowed or dismissed. If the appeal fails, the case proceeds toward discovery and a trial.

Discovery would likely test the bank’s account files, internal alerts, email records, suspicious transaction reports, and decision logs around the opening, monitoring, and closure of the accounts. The claimants will aim to show that the bank breached regulatory or common law duties or knowingly assisted wrongdoing. The bank will counter that it filed reports, acted in a timely way, and bears no responsibility for the losses claimed.

Civil cases of this size often take many months. Settlement is possible at any time. If a court ultimately finds liability, damages could align with the losses alleged, with interest and possibly costs. Any judgment would be subject to appeals. Insurers sometimes cover portions of losses linked to operational failures, though coverage depends on policy terms and on findings about intent or knowledge.

How banks are expected to handle suspicious flows

Banks in Singapore must understand who their customers are, the nature of their business, and the risks they present. This is known as know your customer and customer due diligence. Higher risk clients, such as politically exposed persons, require enhanced checks and continuous monitoring. The goal is to prevent the use of bank accounts for money laundering or terrorism financing.

Transaction monitoring systems search for patterns. Red flags can include large round number transfers, rapid pass through activity, use of multiple accounts that have little genuine business purpose, payments to luxury vendors that do not match the stated profile of the account holder, and extensive intrabank transfers that appear designed to obscure the path of funds. When alerts trigger, banks are expected to investigate, file suspicious transaction reports with the authorities if needed, and in some cases freeze or close accounts.

Compliance programs rely on training, independent testing, and clear escalation pathways. The 1MDB cases prompted upgrades to screening for shell companies and to checks on beneficial owners. Singapore’s MAS has issued detailed notices and guidelines, such as MAS Notice 626 for banks, that set out these requirements. Institutions are also expected to cooperate with cross border requests from law enforcement.

Singapore’s role and the regional picture

As a leading financial hub, Singapore became a transit point for some of the 1MDB money movements. In response, prosecutors, police, and MAS brought asset seizures and administrative actions, and the courts have managed civil and criminal cases linked to the scandal. Coordination with Malaysia, the United States, Switzerland, and other jurisdictions has been a constant feature of the recovery effort.

The new case against Standard Chartered keeps Singapore in a central position for testing the responsibilities of banks that handled accounts tied to 1MDB related entities. The handling of the appeal and the management of evidence will be watched closely by compliance officers and legal teams across the industry.

Key Points

• Singapore’s High Court rejected Standard Chartered’s bid to strike out a US$2.7 billion claim tied to 1MDB, allowing the lawsuit to proceed.
• Liquidators for Alsen Chance, Blackstone Asia Real Estate Partners, and Brightstone Jewellery allege the bank permitted more than 100 intrabank transfers between 2009 and 2013 and ignored red flags.
• The claim cites transfers to Najib Razak’s personal account worth about US$150 million and spending on luxury goods for Rosmah Mansor exceeding US$135 million.
• Standard Chartered denies liability, says it reported the activities and closed the accounts by early 2013, and plans to appeal.
• Malaysia reports recovering about 29 billion ringgit in 1MDB related assets since 2019, with actions running across several countries.
• Singapore’s MAS fined Standard Chartered S$5.2 million in 2016 for breaches linked to 1MDB, while other banks paid penalties or exited the market.
• The court’s decision is procedural, not a finding on the merits, and the case moves toward discovery unless the appeal succeeds.