World's top banks in U.S. government cross-hairs over dealings with 1MDB

Fri Apr 1, 2016 12:53am EDT
 
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By Praveen Menon and Saeed Azhar

KUALA LUMPUR (Reuters) - U.S. Department of Justice officials have asked Deutsche Bank AG and JPMorgan Chase & Co to provide details on their dealings with 1MDB, as global investigations into the troubled Malaysian state fund widen.

U.S. Department of Justice officials also traveled to Kuala Lumpur to speak to senior bankers and other people with close links to the state fund, three people with direct knowledge of the matter told Reuters. They said JPMorgan (JPM.N: Quote) and Deutsche DBCBW.PK were not the target of investigations at this stage, but had only been asked to provide details.

Deutsche Bank and JPMorgan declined to comment. The Department of Justice also declined to comment.

The U.S. move marks the latest development in a wide-ranging global investigation across three continents into possible corruption and money-laundering at 1MDB, whose advisory board is chaired by Prime Minister Najib Razak.

Najib has denied any wrongdoing and said he has not taken any funds for personal gain, but opposition leaders and government critics have stepped up calls for him to resign.

The sources spoke on condition of anonymity as they were not authorized to speak to the media. It was unclear how long the U.S. officials were in Kuala Lumpur, or whether they had completed their visit.

A team of lawyers for Deutsche Bank are in Kuala Lumpur preparing the report they intend to submit to the Department of Justice, one of the sources said.

Malaysia's Attorney General, who was hand-picked by Najib, cleared him of all criminal offences in January, declaring that $681 million that were deposited into his personal bank accounts were a gift from Saudi Arabia's royal family.   Continued...

 
Traffic passes a 1Malaysia Development Berhad (1MDB) billboard at the Tun Razak Exchange development in Kuala Lumpur, Malaysia, July 6, 2015.  REUTERS/Olivia Harris