The two banking giants have been asked by the US Department of Justice to provide details of their dealings with the 1MDB fund, according to sources with direct knowledge of the matter. DoJ officials have reportedly also traveled to Kuala Lumpur to speak directly with senior bankers and others who have interacted with the fund. Neither of the two banks nor the DoJ has commented on their role in the investigation, though it is understood that neither of the banks are being targeted by the investigation at this time.

Malaysia's 1MDB fund is the subject of widening, cross-continental scrutiny as allegations of corruption and money laundering continue to swirl. Malaysian Prime Minister Najib Razak, who chairs 1MDB's advisory board, has faced heavy public criticism and investigatory scrutiny over his links to the fund. Last year, a $681 million 'gift' from the Saudi royal family which was deposited into Prime Minister Razak's personal bank account was widely believed to have originated from the state fund, though Malaysia's Attorney General cleared him of any wrongdoing in January. The fund has also consistently denied that any 1MDB funds have been channeled into the Prime Minister's pocket.

Deutsche Bank is one of many global lenders with links to 1MDB, having provided a $975m loan to the fund in 2014 which was repaid last year. The German lender was also advising 1MDB on a $3bn initial public offering of its energy assets which never came to pass. JPMorgan usually acts as a US clearing bank for lenders operating in Malaysia—the nature of its links to 1MDB are not yet clear.

Source: Asian Legal Business