LUXEMBOURG: A Luxembourg court on Thursday (May 22) fined Edmond de Rothschild bank €25 million (US$28 million) for its role in a money-laundering scandal in which a Malaysian wealth fund lost billions of dollars.
“This is the first time that a Luxembourg banking establishment has been convicted in a money laundering case,” the Grand Duchy’s judicial authorities noted following the punishment in the so-called 1MDB affair, which involved the misappropriation of money from 1Malaysia Development Berhad.
The fund, created in 2009 as then Prime Minister Najib Razak set out to modernise Malaysia, soon found itself embroiled in corruption allegations, leading to a swathe of investigations notably in Switzerland, Singapore and the United States.
“A very large portion of the funds raised by 1MDB was siphoned off … particularly between 2009 and 2013, by the prime minister, Malaysian officials, and others,” the court stated.
In Luxembourg, which hosts the European subsidiary of Switzerland’s Edmond de Rothschild bank, dozens of accounts opened at the establishment by an Emirati national in the name of a slew of different companies were used to divert money away from the fund.
The investigation, which opened in the Grand Duchy in 2016, “established that through complex international financial flows, funds from 1MDB were ultimately credited to the bank accounts of several of these entities”.
Before arriving in the accounts, the cash moved through a number of different financial jurisdictions, including Caribbean tax havens, the court said.
https://www.channelnewsasia.com/world/malaysia-1mdb-scandal-luxembourg-bank-fined-5148596
