The long-running legal battle over billions lost from 1Malaysia Development Berhad (1MDB) has shifted focus, as the state fund has officially dropped its claims against JPMorgan and Coutts & Co, narrowing the US$1.1 billion suit to target Deutsche Bank, PetroSaudi International, and two of its top executives.
The decision followed 1MDB’s withdrawal of its appeals against the Swiss banks, effectively ending their involvement in the case. The Court of Appeal hearing scheduled for Thursday was cancelled as a result. The High Court had earlier ruled that the Malaysian courts did not have jurisdiction over JPMorgan and Coutts, stating that any claims against the Swiss-based institutions should be pursued in Switzerland instead.
According to reports by The Edge Malaysia, Judge Raja Ahmad Mohzannuddin allowed 1MDB to amend its statement of claim to reflect the latest changes. The amended suit will now proceed against Deutsche Bank AG, PetroSaudi International Ltd, PetroSaudi Holdings (Cayman) Ltd, and PetroSaudi executives Tarek Obaid and Patrick Mahony.
1MDB’s legal counsel, Pang Huey Lynn, confirmed that the fund would continue pursuing the remaining defendants. The lawsuit, first filed in May 2021, accuses PetroSaudi and its associates of orchestrating fraudulent transactions and misappropriating billions from joint ventures that were meant to benefit Malaysia’s development projects.
Previously, JPMorgan had been accused of dishonestly receiving funds linked to PetroSaudi, while Coutts was alleged to have processed transfers to Good Star Ltd, a company reportedly connected to fugitive financier Jho Low. Both banks had successfully challenged Malaysia’s jurisdiction in 2022 and 2023, arguing that any disputes should be heard in their home country, Switzerland.
Although 1MDB initially sought to discontinue the Malaysian proceedings with plans to refile later, the High Court struck out its notice and reaffirmed the jurisdictional decision earlier this year.
The Court of Appeal was later informed of potential settlement discussions involving JPMorgan. In August, the bank reportedly agreed to pay US$330 million (RM1.4 billion) to the Malaysian government as part of a separate resolution, effectively closing its chapter in the case.
With the Swiss banks out of the picture, the lawsuit now centres on Deutsche Bank and the PetroSaudi group, both accused of facilitating and profiting from the complex financial web that drained 1MDB’s funds. The outcome of the amended case will be closely watched as Malaysia continues its global pursuit to recover assets lost in one of the world’s biggest financial scandals.
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