BSI Bank owners fail to strike out 1MDB's US$394 million claim in Singapore Court

SINGAPORE, Aug. 29, 2024 /PRNewswire/ -- In a significant legal development, the High Court of Singapore has dismissed an application by BSI Bank Limited (now in liquidation) (BSI) to strike out the US$394 million claim brought against it by 1Malaysia Development Berhad (1MDB) and its subsidiary, Brazen Sky Limited.

The case, which commenced on 2 May 2024, sees 1MDB and Brazen Sky seeking redress for large-scale financial losses said to be suffered as a result of unauthorised fund transfers and money laundering schemes orchestrated through accounts at BSI. The claim alleges that BSI and several of its former officers facilitated these transfers, assisting in the misappropriation of 1MDB's assets.

The action forms part of 1MDB's ongoing global asset recovery efforts to reclaim billions of dollars of misappropriated funds.

The dismissal of the strike-out application (which is subject to appeal) allows the case against BSI to proceed.

BSI was placed into members' voluntary liquidation in 2017, with Bob Yap Cheng Ghee and Toh Ai Ling of KPMG Singapore appointed its joint and several liquidators. BSI is a wholly-owned subsidiary of BSI AG of Switzerland (BSI AG) which is, in turn, previously owned by Brazil's BTG Pactual (known as Latin America's equivalent to Goldman Sachs). BSI AG was sold in 2017 to the Zurich-based banking group, EFG International. Based on a media release issued by EFG International on 1 November 2016, BTG Pactual agreed to indemnify EFG International against "certain known liabilities and damages" to "de-risk[…] the acquisition". BTG Pactual also owns almost a third of EFG.

A spokesperson for the 1MDB Board commented:

"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."

This commitment was further evidenced by a verdict given in Switzerland yesterday, where the highest criminal court convicted businessmen Tarek Obaid and Patrick Mahony of fraud and money laundering, sentencing them to seven- and six-years' imprisonment, respectively. This judgment also permitted the recovery of $1.748 billion to Malaysia and the court ordered that Obaid and Mahony's assets, totalling approximately $240 million, be confiscated and restored to 1MDB.

Notes to editors

1MDB is represented by Jern-Fei Ng KC, Colin Liew and Tan Jun Hong of Duxton Hill Chambers (Singapore Group Practice) and a team from LVM Law Chambers. Lim Chee Wee Partnership of Kuala Lumpur acts as global co-ordinating counsel for all 1MDB-related asset recovery efforts in Malaysia and abroad. The liquidators for 1MDB subsidiary Brazen Sky are Angela Barkhouse and Toni Shukla, both of Kroll.