The scandal concerning Malaysia’s state development fund 1MDB continues to percolate across the globe. While the Malaysian investigation of the massive fraud and theft involving 1MDB has largely gone quiet, barely causing a burp in the country’s election campaigns, other countries are still probing the matter.
A new player to emerge is Switzerland. The country’s prosecutors have initiated a criminal probe into officials of Saudi Arabian energy concern PetroSaudi, a company that is also the focus of a U.S. regulatory investigation regarding a joint venture with 1MDB. According to reports, the partnership was purloined by a Malaysian businessman, Jho Low, who is said to be close to the current Prime Minister.
It is alleged that certain PetroSaudi officials were paid to approve and then create the joint venture. The deal was funded by 1MDB through debt financing, and the funds were then moved by Low, who used them for personal purchases.
Interestingly, the Swiss investigation officially started in November 2017, but that country’s regulators are only now releasing information on it. Furthermore, the PetroSaudi officials were not named by Swiss prosecutors and both PetroSaudi and 1MDB deny the allegations.
In every corruption case, the money must be laundered somewhere and, with a scandal as massive as 1MDB, there are very few countries on earth that have the capability to facilitate the fraud—one of those being Switzerland.
This new revelation makes clear that Switzerland’s regulators are taking much more seriously their role in stopping money laundering—a welcome development.