Investigators probing one of the world’s largest financial frauds have said they suspect $340m (£255m) held in the bank account of a major London law firm is linked to money allegedly embezzled from the Malaysian state investment fund 1MDB.
According to court papers, Malaysia’s anti-corruption agency is urgently trying to prevent City firm Clyde & Co from releasing the large sum of money, which they suspect can be traced to proceeds of the multibillion-dollar 1MDB fraud.
The sprawling 1MDB scandal has shaken Malaysian politics in recent years and sparked investigations around the world into how billions of dollars were siphoned from the fund and laundered through an elaborate network of bank accounts and offshore companies to pay bribes and finance luxury lifestyles.
Last week, the country’s former prime minister Najib Razak was found guilty on seven charges linked to the 1MDB fraud in the first of a series of trials related to the fraud. Earlier in July, Goldman Sachs reached a $3.9bn (£3.1bn) settlement with the Malaysian government in connection with the affair.
The $340m said to be in the bank account of Clyde & Co is linked to a Saudi businessman, Tarek Obaid, who US and Malaysian prosecutors have alleged is implicated in the fraud against 1MDB. In February, Obaid, who has consistently denied any wrongdoing, was charged in Malaysia with money laundering and engaging in a criminal conspiracy with Razak.
After charging Obaid earlier this year, Malaysian prosecutors turned their attention to money held in multiple UK bank accounts which they suspect is linked to a joint venture company formed in 2009 between 1MDB and PetroSaudi, an oil business established by Obaid with a member of the Saudi royal family.
US and Malaysian prosecutors have alleged the joint venture was used to misappropriate hundreds of millions of dollars from 1MDB. According to prosecutors, Obaid was closely involved in the partnership and in 2017 the US moved to seize some of his assets allegedly purchased using 1MDB money.
Malaysian investigators told a court in Kuala Lumpur in July that Clyde & Co was seeking to “utilise” the $340m after agreeing last year to release the money to companies believed to be controlled by Obaid.
Andy Kerman, one of Obaid’s lawyers in the UK, told the Guardian his client denied any wrongdoing in connection with the joint venture. Obaid’s advisers, he added, “are in touch with the relevant authorities.”
