An employee of Coutts & Co who approved the diversion of US$700 million from 1MDB to an account controlled by businessperson Low Taek Jho has gone on trial in Geneva, Switzerland, according to Bloomberg.
The report said Swiss prosecutors were pursuing the 52-year-old former banker, only referred to as "A", in part due to his role in the approval.
Low and his associates had misrepresented his Seychelles-based company Good Star Ltd as a subsidiary of PetroSaudi International in which 1MDB had entered into a joint-venture with.
A, who was the compliance officer, appeared to have accepted the justification when in reality 1MDB's funds were being diverted to Low's company.
"Despite being an unknown Seychelles-registered company with a limited track record, Good Star was an investment firm that 1MDB was choosing to invest with, Low explained.
"Besides, Low added, he had close relationships with the king and prime minister. The deposit was eventually approved," said the report.
The report cited the indictment papers in which A's email transcript dated Oct 2, 2009, was made available.
It read: “Please unblock the account 11116073 Good Star Ltd. The due diligence is so far good, and we have sufficient evidence that the payment is true and valid.”
It further quoted the prosecution's comment that for this and other lapses, "the culpability of the accused A weighs heavily".
The company was fined US$6.5 million in 2017.
Under a joint-venture 1MDB was supposed to inject US$1 billion for assets offered by PetroSaudi, the value of which was in itself questionable.
When 1MDB made the transfer, US$300 million went into the joint-venture but another US$700 million was diverted to Good Star Ltd.
Former prime minister Najib Abdul Razak and Low were among the key figures in the 1MDB scandal that spanned financial systems across the globe.
The US Department of Justice estimated at least US$4.5 billion were misappropriated from 1MDB. - Mkini
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