Malaysia is in settlement negotiations with Swiss bank Julius Baer Group Ltd. over a US$112 million lawsuit filed by SRC International, the former subsidiary of 1MDB, alleging the bank breached its fiduciary duties during the global 1MDB scandal.
The chairman of the government’s 1MDB asset recovery task force, Datuk Seri Johari Abdul Ghani, confirmed to Bloomberg News that mediation is underway.
“Mediation is ongoing,” he said when asked about the status of the case.
Julius Baer declined to comment.
Filed in a Hong Kong court in 2021, the lawsuit claims that SRC’s former management instructed the bank to make fraudulent transfers totalling US$112.5 million to third parties. SRC alleges these transactions were carried out between 2013 and 2016, despite widespread international reporting on the 1MDB scandal and clear “red flags” that should have prompted the bank to question the instructions.
The action forms part of Malaysia’s wider effort to hold global financial institutions accountable for their role in facilitating suspicious fund flows linked to 1MDB.
The government has reported mixed outcomes in its legal campaign. In August, JPMorgan Chase & Co. agreed to a RM1.4 billion settlement without admitting liability, while a separate US$1.1 billion suit against Deutsche Bank AG is scheduled for trial in January, with the bank expected to contest the case.
So far, Malaysia has recovered RM29.7 billion in funds connected to 1MDB and SRC International.
The Finance Ministry says a total of RM42.2 billion has been spent to service debts and obligations left behind by the collapsed state investment fund.
