1MDB Pursues Deutsche Bank Settlement Over US$1.11 Billion Claim as October 26 Hearing Nears

Settlement proposal reaches the Malaysian courts

Malaysia's 1Malaysia Development Berhad (1MDB) is discussing a proposed settlement with Deutsche Bank over a claim of approximately US$1.11 billion, with a hearing in the case scheduled for October 26, 2026. The talks could resolve another banking dispute in Malaysia's effort to recover money lost in the 1MDB scandal, although no settlement amount or agreed terms have been disclosed.

Lawyer Lim Chee Wee, representing 1MDB, revealed the discussions during Federal Court proceedings in Putrajaya on Monday, October 12. He said the Kuala Lumpur High Court had already been informed of the proposal. High Court Judicial Commissioner Rihada Rafie is handling the Deutsche Bank case.

The disclosure came during a separate application involving law firm White & Case LLP, showing how several branches of 1MDB's litigation remain active at the same time. A proposed agreement with one defendant would not automatically resolve claims against others.

Lim described the position to the court:

"We have already informed the High Court that there is a proposed settlement between our client (1MDB) and Deutsche Bank. The hearing for that case is scheduled for October 26 before High Court Judicial Commissioner Rihada Rafie," Lim said.

Deutsche Bank continues to defend its position. Its statement did not confirm an agreed payment, and Lim declined to disclose further details after the proceedings. For now, the development is a settlement discussion, not an announced recovery.

What the claim covers

The claim against Deutsche Bank (Malaysia) Berhad dates to litigation filed in May 2021. Contemporary accounts put the amount sought from that subsidiary at US$1.11 billion, plus interest. More recent descriptions round the figure to US$1.1 billion.

The allegations include negligence, breach of contract, conspiracy to defraud or injure, and dishonest assistance. These are claims made by 1MDB, rather than established findings of liability against the bank. Dishonest assistance refers to an allegation that a party knowingly helped wrongdoing involving obligations to another party.

A description of the Deutsche Bank proceedings identifies three wire transfers between 2009 and 2011 as the transactions at issue. A July 2025 ruling reportedly rejected the bank's attempt to dismiss the lawsuit on limitation grounds, allowing the claim to continue. That procedural outcome did not itself establish whether the bank was responsible for the alleged losses.

Reports differ on the value of the original action involving multiple defendants. One describes a US$1.83 billion lawsuit filed on May 7, 2021, while another gives US$4.77 billion. The separately identified US$1.11 billion demand against Deutsche Bank is consistent across accounts that specify the bank's individual claim. The differing totals should not be treated as interchangeable or as the amount now being discussed in settlement.

Deutsche Bank maintains its defence

Deutsche Bank has disputed the basis of 1MDB's claim since the litigation began. In 2021, a spokesperson said the bank had not been served with papers and was unaware of a basis for a legitimate claim.

In its response to the latest settlement development, the bank said its circumstances differ from those of other defendants and pointed to developments in related litigation. Deutsche Bank stated:

We continue to feel strongly about our position in the case, which is supported by our particular fact pattern that is differentiated from other defendants, as well as recent developments in ongoing similar cases involving other parties.

The bank added:

"Any potential settlement would need to take this into account," it said.

The statement leaves open the possibility of an agreement while maintaining the bank's defence. It does not identify which other cases Deutsche Bank considers relevant, explain how those developments might affect a payment, or disclose whether any proposal includes an admission of liability.

How the banking case has narrowed

The original proceedings named seven defendants: Deutsche Bank (Malaysia) Berhad, Coutts & Co, JPMorgan (Switzerland), PetroSaudi International, PetroSaudi Holdings (Cayman), businessman Tarek Obaid and Patrick Mahony. Alongside its Deutsche Bank claim, 1MDB sought US$800 million from JPMorgan's Swiss subsidiary and US$1.03 billion from a Swiss Coutts unit, plus interest.

JPMorgan and Coutts were dropped from the action on November 13, 2025, leaving Deutsche Bank as the sole remaining bank defendant. That does not mean it was the only defendant of any kind. One account also says Mahony was removed from this action and named in separate proceedings.

The changing defendant list matters because the original lawsuit brought together claims against banks, companies and individuals. A settlement with Deutsche Bank would address the claim against that bank, rather than necessarily settling every allegation arising from the transactions.

Malaysia's finance ministry said when the recovery litigation was launched in 2021 that 1MDB and a former unit had filed 22 civil suits seeking more than US$23 billion in assets. That figure described the scale of the claims being pursued, not money already recovered or an amount that courts had ordered defendants to pay.

The transfers behind the dispute

Testimony in Najib Razak's separate criminal trial gives a more detailed account of a major 2009 transfer handled by Deutsche Bank. On April 21, 2025, Raymond Yeoh Chen Seong, the former chief executive of Deutsche Bank (Malaysia) Berhad, testified that 1MDB changed instructions for an initial US$1 billion transfer intended for joint venture company 1MDB PetroSaudi Limited.

The revised instructions split the payment into US$700 million and US$300 million. Deutsche Bank sent US$700 million to an RBS Coutts account and US$300 million to a JPMorgan account, following instructions from 1MDB.

Yeoh, who led the Malaysian bank from 2006 to 2013, said the change differed from Bank Negara Malaysia's approval. He said the bank obtained confirmation from 1MDB staff and that he personally contacted Wan Hanisah of the central bank's Foreign Exchange Administration Department for clarification.

Describing that conversation, Yeoh told the High Court:

"Wan Hanisah said that it is not for BNM to say anything, and it is a business decision of 1MDB," said Yeoh.

This was Yeoh's testimony about the central bank's response, not a newly issued statement from Bank Negara Malaysia. It also arose in Najib's criminal trial, rather than a final judgment on Deutsche Bank's civil liability.

Recipient names and the Good Star account

According to Yeoh's testimony, 1MDB employee Stephenny Chow identified the intended US$700 million recipient as PetroSaudi International Ltd and the US$300 million recipient as 1MDB PetroSaudi Ltd in an email responding to Deutsche Bank's query.

Yeoh said compliance checks using those company names found no red flags. He also acknowledged that the account receiving US$700 million was later revealed to belong to Good Star Limited, a company associated with Low Taek Jho.

The distinction between the recipient name given in payment instructions and the actual account owner is central to understanding the transaction. Checks against a named company and confirmation of who owns the receiving account are different questions. Yeoh's account explains the bank's stated handling of the instructions, but it does not settle whether those steps met its legal obligations.

The US$700 million transfer represented 70% of the initial US$1 billion payment, while the US$300 million transfer represented 30%. Those figures show the importance of the Good Star payment within that transaction. They should not be confused with the full US$1.11 billion civil claim or treated as a complete description of the three transfers reportedly covered by the lawsuit.

Recoveries remain below stated obligations

The potential Deutsche Bank agreement comes as Malaysia continues to carry substantial financial obligations associated with 1MDB. Government figures cited in the settlement reporting put those obligations at RM51.4 billion and recoveries at RM31.3 billion.

The difference between those figures is RM20.1 billion. Recoveries amount to approximately 61% of the stated obligations, using RM31.3 billion divided by RM51.4 billion. This comparison shows the scale of the remaining financial burden, but it does not establish an exact unpaid balance because the figures do not explain the timing or treatment of every recovered sum and obligation.

Other banking settlements provide context. JPMorgan Chase & Co agreed in 2025 to pay RM1.4 billion in a separate agreement related to 1MDB. Earlier settlements with Goldman Sachs and AmBank Group were described as US$3.9 billion and RM2.83 billion respectively.

Those headline amounts are not directly comparable without the terms of each agreement. A settlement value can differ from the amount immediately paid, and the dollar and ringgit figures should not be added without an exchange rate and a common valuation date. No disclosed figure yet allows the proposed Deutsche Bank agreement to be measured against these settlements.

US prosecutors have alleged that at least US$4.5 billion was stolen from 1MDB between 2009 and 2014 through an international scheme involving senior officials and their associates. Malaysian authorities have said billions more remain unaccounted for. That alleged theft figure is distinct from Malaysia's financial obligations, litigation demands and settlement totals.

White & Case proceedings continue separately

The settlement disclosure emerged while the Federal Court was considering 1MDB's application for permission to appeal a decision favouring White & Case. The fund is seeking to challenge an appellate ruling that the Malaysian High Court lacked jurisdiction over its lawsuit against the firm.

Reports give different dates for that Court of Appeal decision: August 12 and August 20, 2026. Both accounts describe a jurisdiction ruling in favour of White & Case. The exact date differs, but the reported procedural result is consistent.

A detailed account says the appellate court considered England the proper forum, citing the choice of English law and requirements for serving proceedings outside Malaysia. It also says the court found the claim outside the time limit under Malaysia's Limitation Act 1953, referring to a six year period and public knowledge of the alleged losses and fraud in 2015 and 2016.

1MDB filed the White & Case action in 2024, seeking US$1.83 billion and US$33 million in losses from the firm and Mahony. It alleged that the firm assisted PetroSaudi in fraud and conspired to harm 1MDB while acting as PetroSaudi's legal counsel. Those allegations remain distinct from findings on where the case can be heard.

At the October 12 proceedings, White & Case counsel Cyrus Das objected to 1MDB adding more than 3,000 pages of documents to its application. The Federal Court allowed the documents and directed that affidavits be filed. Case management was ordered to arrange an early hearing date. Permission to add documents is not permission to appeal, and neither step amounts to a decision on the underlying fraud allegations.

Dates and decisions to watch

The litigation spans transactions from 2009 onward, claims launched in 2021 and current efforts to settle or appeal. The main reported milestones are:

• 2009: 1MDB's initial US$1 billion payment instructions were split into transfers of US$700 million and US$300 million.
• May 7, 2021: 1MDB filed the action naming Deutsche Bank and six other defendants.
• April 21, 2025: Former Deutsche Bank executive Raymond Yeoh testified about the payment instructions in Najib's criminal trial.
• July 2025: A ruling reportedly rejected Deutsche Bank's attempt to dismiss the claim on limitation grounds.
• November 13, 2025: JPMorgan and Coutts were dropped from the action.
• August 2026: The Court of Appeal ruled in favour of White & Case on jurisdiction, although reports differ on the precise date.
• October 12, 2026: Lim disclosed the proposed Deutsche Bank settlement during Federal Court proceedings.
• October 26, 2026: The Deutsche Bank case is scheduled for a High Court hearing.

The next concrete date is October 26. Lim indicated that further instructions might be needed about whether to proceed with that hearing. No cancellation or replacement date has been disclosed.

The unanswered issues are the proposed settlement amount, whether both sides will accept it, any payment schedule and whether an agreement would include an admission of liability. A date for the White & Case permission to appeal hearing was also not disclosed. Until an agreement is announced, the Deutsche Bank claim remains a pending case with negotiations under way.

Key Points

• 1MDB is discussing a settlement with Deutsche Bank over a claim of approximately US$1.11 billion, plus interest.
• The High Court has been informed of the proposal, with a hearing scheduled for October 26, 2026.
• Deutsche Bank maintains its defence. No settlement amount or agreed terms have been disclosed.
• JPMorgan and Coutts left the action in November 2025, leaving Deutsche Bank as its sole remaining bank defendant.
• Government figures put recoveries at RM31.3 billion against RM51.4 billion in financial obligations associated with the scandal.
• Separate proceedings involving White & Case continue, with the Federal Court allowing additional documents for 1MDB's application for permission to appeal.