Only two months ago, we reported on the Swiss branch of the Edmond de Rothschild Group announcing that they were the target of a French criminal probe “regarding a business relationship managed by a former employee.”
Now, the Luxembourg unit of Rothschild banking empire is being investigated by the Luxembourg state prosecutors office — alleged to have sent hundreds of millions of dollars to an account at a bank in Luxembourg that originated from 1Malaysia Development Berhad (1MDB).
The fund, 1MBD, was established by Malaysian Prime Minister Najib Razak in 2009 as a government investment fund. There have been widespread accusations of corruption surrounding Razak after $1 billion dollars in deposits into his personal bank accounts were revealed. The deposits totaled hundreds of millions of dollars more than had previously been exposed by probes into state fund 1MDB, according to the Wall Street Journal.
The Luxembourg investigation stems from an international probe of money that may have flowed from the Malaysian government investment fund, which is at the center of various worldwide corruption probes.
According to a report in the WSJ:
The Luxembourg unit of Edmond de Rothschild Group, a private bank that manages money on behalf of wealthy clients, said it is “cooperating” with an official investigation of money that may have flowed from a Malaysian government investment fund at the center of various world-wide corruption probes…“Edmond de Rothschild Europe is actively cooperating in the judicial proceedings,” a spokeswoman for the Edmond de Rothschild Group told the WSJ.
The Luxembourg investigation widens probes of 1MDB already under way by authorities in Switzerland, Malaysia, Singapore, Hong Kong and Abu Dhabi. Swiss authorities said in January that 1MDB-related losses from misappropriation could reach $4 billion. The Luxembourg prosecutor said its case was connected to the investigation in Switzerland.
1MDB was created to invest in local energy and real-estate projects to boost the Malaysian economy. The fund amassed $11 billion in debt which it has struggled to repay. Last July,The Wall Street Journal reported that almost $700 million was transferred to Mr. Najib’s bank accounts via a web of entities, money which investigators believe originated with 1MDB. 1MDB has denied sending money to Mr. Najib’s accounts and denied wrongdoing and said it is cooperating with probes
The Edmond de Rothschild Group oversees roughly $164 billion in assets, according to Bloomberg. The private bank and asset management firm to the elite was founded by Edmond de Rothschild in Paris in 1953. Edmond’s son Benjamin de Rothschild succeeded his father as head of the group in 1997. Last year, Benjamin appointed his wife, Ariane, chairwoman of the executive committee. The Swiss unit traces its roots to the acquisition of Banque Privee in Geneva in 1965.
But the history of the Rothschild banking empire stretches far further back in time.
