Banks cannot intervene in winding-up bids by 1MDB-linked firms: Singapore High Court
Source: Business Times
Article Date: 20 Mar 2026
Author: Ry-Anne Lim
They are ruled to have no standing to participate in the process, even though claims may later be brought against them.
The Singapore High Court has ruled that Standard Chartered Bank (StanChart) and BSI Bank cannot intervene in winding-up applications brought by offshore companies in relation to the 1Malaysia Development Bhd (1MDB) scandal.
In a judgment released on Thursday (Mar 19), the court said that the banks have no standing to participate in the winding-up, even though they could face claims if the applications succeed.
The applicants were four entities: Alsen Chance, Brightstone Jewellery, Brazen Sky and Blackstone Asia Real Estate Partners.
They are linked to fugitive financier Jho Low, who is wanted for his central role in the multibillion-dollar corruption scandal, and his associates.
Together, they alleged that StanChart permitted over 100 intrabank transfers between 2009 and 2013 that “helped conceal the flow of stolen funds”, and it “chose to overlook obvious red flags” in relation to the transfers.
Meanwhile, Brazen Sky’s BSI account allegedly held overvalued fund units to hide a misappropriated investment in a PetroSaudi joint venture.
The four companies are being liquidated in the British Virgin Islands as part of efforts to recover funds allegedly misappropriated from 1MDB.
These include US$150 million in transfers from a Blackstone account to Najib Razak, Malaysia’s former prime minister, as well as US$53.4 million from Alsen Chance and US$77 million from Brightstone to vendors for luxury purchases linked to Najib’s wife, Rosmah Mansor.
The four companies sought to be wound up in Singapore so liquidators here could pursue claims against the banks for these past transactions, which largely took place before Singapore adopted cross-border insolvency rules.
“It is not disputed that the purpose of these applications is to ultimately allow the Singapore liquidators to pursue avoidance claims against (the banks),” the court said in the latest judgment.
StanChart, BSI Bank and an employee at one of the lenders argued that they should be allowed to take part in the winding-up proceedings. The applicants objected to this.
For one, the banks said they should be treated as “contingent creditors” with the standing to oppose a winding-up application, since they could be awarded legal costs in ongoing litigation with the companies.
They also asserted that any winding-up order would affect them, so participating now would “conserve judicial time and resources”.
Further, the winding-up applications were a precursor to claims against them, they said, effectively making them “direct targets” of the process.
The court rejected this, saying that the possibility of adverse costs orders does not amount to a contingent liability. The commencement of litigation is merely a risk and not an actual liability, it added.
While it acknowledged that claims “may well be brought” against the three parties if the liquidation applications are successful, the court said: “This is a separate point altogether”.
The court added: “At that stage, (they would) be entitled to defend the claims on the merits. There must be something more, apart from being the sole direct target of a winding-up application, for a person to be entitled to participate in the hearing itself.”
Source: The Business Times © SPH Media Limited. Permission required for reproduction.
Re Alsen Chance Holdings Ltd (in liquidation) (Standard Chartered Bank (Singapore) Ltd, non-party) and other matters [2026] SGHC 61
416