DBS Bank is facing a lawsuit seeking an estimated S$1.298 billion in damages in a claim linked to recovery efforts surrounding Malaysia’s 1MDB scandal.
The lawsuit was disclosed by DBS on Wednesday, 9 September, with the bank saying it rejects the claim and intends to fight it.
Four Companies in Liquidation Are Among the Claimants
According to DBS, the lawsuit was filed by four companies that are in liquidation: Affinity Equity International Partners Limited, Blackrock Commodities (Global) Limited, Platinum Global Luxury Services Limited and TKIL Global Investments Limited.
Their liquidators, Jason Aleksander Kardachi and Karnjote Singh s/o Jarmal Singh, are also named as claimants.
The claimants have estimated their damages at S$1.298 billion, which Reuters put at about US$1.03 billion based on prevailing exchange rates.
However, the specific allegations against DBS have not been publicly detailed in the material released so far.
Reuters reported that DBS did not provide further details about the allegations it faces, while the liquidators did not immediately respond to the news agency’s request for comment.
That means it would be premature to assume that the allegations against DBS are the same as those made in other 1MDB-related lawsuits against financial institutions.
DBS Says It “Categorically Rejects” the Claim
DBS said it had consulted its lawyers and would vigorously contest the lawsuit.
The bank also pointed out that global efforts to recover assets connected with 1MDB have been ongoing with legal advisers since 2018, but that no claim had previously been brought against DBS during that period.
DBS said it had assessed the matter and did not need to make any provision for the claim at this stage.
In accounting terms, a provision is an amount recognised in a company’s accounts for a liability whose timing or amount remains uncertain. So, for now, DBS has not booked a potential S$1.298 billion loss arising from the lawsuit.
DBS shares closed at S$77.50 on 9 September, down S$0.60 or about 0.8 per cent. The bank’s announcement came after the market had closed.
The Claim Comes Amid Years of 1MDB Recovery Efforts
1Malaysia Development Berhad, better known as 1MDB, was set up by the Malaysian government as an investment development fund.
According to the US Department of Justice, more than US$4.5 billion belonging to 1MDB was allegedly misappropriated between 2009 and 2015 through an international scheme involving money laundering and bribery. Investigations and attempts to recover assets have since stretched across multiple countries, including Singapore.
The DBS lawsuit is not the only Singapore court action connected to those recovery efforts.
Separately, several 1MDB-linked entities have pursued a US$2.7 billion lawsuit against Standard Chartered Bank in Singapore. That is a different case involving separate claims and should not be taken as evidence of what is being alleged against DBS.
For the DBS case, the crucial details will be what the claimants ultimately allege the bank did, and how DBS responds to those allegations in court.
