1MDB
A Malaysian government-owned strategic development company that became the central subject of one of the world’s largest international corruption and money-laundering scandals.
Last updated October 24, 2026
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Overview
1Malaysia Development Berhad, commonly known as 1MDB, was a Malaysian government-owned strategic development and investment company. It was created in 2009 when the federal government took over the Terengganu Investment Authority and expanded its stated mandate from development within Terengganu to projects intended to benefit Malaysia more broadly. The company was wholly owned by the Minister of Finance (Incorporated), with the Malaysian finance minister serving as its legal owner and ultimate controlling authority. 1MDB was presented as a vehicle for national economic transformation. Its activities included raising funds through Islamic medium-term notes and international bonds, investing in energy and natural-resource projects, acquiring and developing real estate, and supporting ventures intended to attract international capital. Major assets and initiatives associated with it included the Tun Razak Exchange financial district in Kuala Lumpur, the proposed Bandar Malaysia development, energy investments, SRC International, and transactions involving PetroSaudi Holdings and entities connected with Abu Dhabi’s International Petroleum Investment Company. The company’s financing structure and transactions later attracted extensive scrutiny. Investigators and prosecutors in Malaysia and abroad alleged that billions of dollars raised in 1MDB’s name had been diverted through layered transactions, offshore companies, trust structures and bank accounts. The United States Department of Justice alleged that at least US$3.5 billion had been misappropriated in its initial civil forfeiture actions; by 2020, the alleged amount was reported as approximately US$4.5 billion. Malaysian government reporting described 1MDB’s outstanding liabilities as approximately US$7.8 billion at that time. These figures are associated with particular investigations and reporting periods rather than a single universally accepted accounting conclusion. The scandal implicated senior Malaysian political figures, financial institutions, intermediaries and businesspeople across several jurisdictions. Former prime minister Najib Razak, who was also finance minister during much of 1MDB’s existence and chaired its advisory board, was convicted in the SRC International case and imprisoned after Malaysian appeals proceedings. The controversy contributed to the defeat of the governing coalition in Malaysia’s 2018 general election and prompted changes in investigations, parliamentary oversight and asset-recovery policy. International authorities pursued criminal investigations, civil forfeiture, settlements and restitution proceedings. By August 2022, the United States Department of Justice said it had recovered and returned US$1.2 billion in 1MDB-related funds to Malaysia from assets within U.S. jurisdiction. Other countries also investigated or recovered smaller amounts. 1MDB was declared insolvent, ceased substantive operations and was dissolved in 2018. Its remaining legacy consists of development assets, government-backed liabilities, recovery efforts and a continuing body of criminal, civil and regulatory litigation. It is therefore best understood as a public-sector investment institution and a historical institutional brand, not as a consumer-facing commercial brand.
History
1MDB originated as the Terengganu Investment Authority, established in 2008 as a proposed sovereign investment vehicle for Terengganu. Its intended capital included anticipated oil royalty receipts, bond financing and a proposed federal guarantee. In May 2009, the authority issued RM5 billion of Islamic medium-term notes, receiving approximately RM4.385 billion in net proceeds. On 31 July 2009, the federal Ministry of Finance took over the entity and changed its name to 1Malaysia Development Berhad. The change was presented as a way to extend the benefits of development investment beyond a single state. After the reorganization, 1MDB pursued a broad investment program. It entered a joint venture with PetroSaudi Holdings in September 2009 and committed US$1 billion, while later transactions converted and redeemed notes connected with the venture. Auditors and investigators questioned the valuation of assets, the routing of funds to accounts outside the joint venture and subsequent investments in offshore portfolio structures. 1MDB also established SRC International in 2011. SRC obtained RM2 billion in financing from Malaysia’s Retirement Fund Incorporated, guaranteed by the federal government, and pursued investments in coal and energy-related assets. Its ownership was transferred from 1MDB to the Ministry of Finance in 2012. Real estate became another major area of activity. 1MDB acquired land in Kuala Lumpur, Penang, Melaka and Selangor, including the site of the Tun Razak Exchange. The TRX project was launched in 2012 as an international financial district and was later associated with the Exchange 106 tower. Bandar Malaysia was promoted as a major urban development and public-private partnership project. Some land disposals were subsequently used as part of efforts to raise funds and manage the group’s liabilities. Concerns about governance and financing escalated from 2014 onward. A Malaysian Auditor General review was commissioned in 2015, while parliamentary and public scrutiny focused on debt levels, investment valuations, guarantees, related parties and cash movements. The audit report was classified under the Official Secrets Act in 2016 and declassified in May 2018 after the change of government. International investigations, including those led by the U.S. Department of Justice, alleged that funds raised for 1MDB had been diverted through offshore companies and financial intermediaries. The allegations encompassed money laundering, fraud and theft, although legal findings differ by defendant and jurisdiction. The scandal had direct political consequences. Najib Razak, who had chaired the company’s advisory board and held the finance portfolio, became a central defendant in Malaysian proceedings. He was convicted in the SRC International case and ultimately imprisoned. Other prosecutions, settlements and investigations involved former officials, intermediaries, banks and companies in Malaysia, the United States, Singapore, Switzerland and other jurisdictions. Following the 2018 political transition, the government acknowledged that 1MDB was insolvent and commissioned PricewaterhouseCoopers to review its affairs. The company’s operating functions ended and it was dissolved in 2018, while the government continued to service or restructure liabilities and pursue recovery of assets. The U.S. Department of Justice reported returning US$1.2 billion to Malaysia by August 2022. Recovery and litigation efforts remained active thereafter, including insolvency proceedings involving entities connected with the scandal. 1MDB’s historical importance lies in the interaction of state-owned finance, political accountability, cross-border banking and global anti-kleptocracy enforcement.
- 2024
Chapter 15 proceedings involving linked entities
[1]Entities linked to the scandal enter U.S. Chapter 15 proceedings while pursuing further asset recovery.
- 2022
U.S. recovery reaches US$1.2 billion
[1]The U.S. Department of Justice reports that US$1.2 billion in recovered funds has been returned to Malaysia.
- 2018
Audit report is declassified and company winds down
[1]The audit report is declassified after the change of government, and 1MDB is subsequently dissolved after becoming insolvent.
- 2015
Malaysian audit begins
[1]The Auditor General begins a review of 1MDB’s accounts and activities under a mandate involving the Cabinet and Public Accounts Committee.
- 2012
TRX is launched
[1]The Tun Razak Exchange project is publicly launched as a proposed Kuala Lumpur financial district.
- 2011
SRC International is established
[1]1MDB creates SRC International to pursue strategic-resource and energy investments.
- 2009
Federal takeover and renaming
[1]The federal Ministry of Finance takes over the Terengganu entity and renames it 1Malaysia Development Berhad.
- 2009
PetroSaudi joint venture
[1]1MDB forms a joint venture with PetroSaudi Holdings and commits US$1 billion in cash.
- 2008
Terengganu Investment Authority is initiated
[1]The predecessor to 1MDB is established as a proposed development and investment vehicle for Terengganu.
Products and positioning
A government development investment and financing platform rather than a consumer product brand.
Government investment and finance · 2009
Strategic development financing
1MDB’s principal offering was not a consumer product but a public-sector financing and investment function. It raised capital through debt instruments and directed funds toward projects described as supporting Malaysia’s development and economic transformation agenda.
Real estate development · 2012
Tun Razak Exchange
A planned international financial district in Kuala Lumpur developed on land acquired by 1MDB. The project was promoted as a major urban and financial-services hub and later included the Exchange 106 tower and related commercial development.
Real estate development · 2010
Bandar Malaysia
A proposed large-scale mixed-use urban development in Kuala Lumpur associated with 1MDB’s transformation and public-private partnership plans. The project became part of the government’s broader asset and liability-management debate after the scandal.
Energy and natural resources · 2011
SRC International
A former 1MDB subsidiary created to pursue strategic-resource investments, including coal and energy-related opportunities. Its government-guaranteed financing and subsequent ownership transfer to the Ministry of Finance became central to Malaysian criminal proceedings.
Controversies
2021
1MDB files asset-recovery lawsuits against bank units
1MDB filed lawsuits at a Kuala Lumpur court against units of Deutsche Bank, J.P. Morgan and Coutts & Co, seeking to recover billions of dollars in alleged losses. The claims include negligence, breach of contract, conspiracy to defraud or injure, and dishonest assistance; the allegations are not determinations of liability.
2020
Goldman Sachs settles dispute with Malaysia over 1MDB bond business
Goldman Sachs and the Malaysian government reached a settlement over the legal dispute arising from Goldman Sachs' bond work for 1MDB. The agreement provides for approximately $3.9 billion in compensation, including cash and assets to be recovered. Malaysia's finance minister said the agreement represented Goldman Sachs' acknowledgment of misconduct by former employees.
2016
Audit secrecy and governance controversy
The Malaysian Auditor General’s report on 1MDB was classified under the Official Secrets Act, intensifying criticism of transparency and oversight. It was declassified in May 2018 after a change of government.
2015
1MDB corruption and money-laundering scandal
A multinational investigation alleged that billions of dollars raised for the Malaysian state fund were diverted through complex cross-border transactions. The matter generated criminal prosecutions, civil forfeiture actions, bank penalties, political upheaval and continuing asset-recovery efforts.
Brand decisions
2018
Commission an independent review after insolvency revelationsStrategyBackground
The incoming government was informed that 1MDB was insolvent and unable to meet its obligations.
Action taken
The finance minister appointed PricewaterhouseCoopers to review and audit 1MDB.
Aftermath
The company ceased substantive operations, was dissolved, and its assets, liabilities and recovery claims were managed by the Malaysian government.
2015
Commission an audit of the 1MDB groupOtherBackground
Growing public and parliamentary concern led to a formal review of the company’s financial statements and activities.
Action taken
The Auditor General was assigned to audit the group and assess alignment with its stated objectives.
Aftermath
The report was classified in 2016 and later declassified in 2018, becoming an important source in subsequent scrutiny.
2009
Convert the Terengganu vehicle into a federal development companyStrategyBackground
The federal government stated that expanding the predecessor’s remit would allow its benefits to reach Malaysians beyond Terengganu.
Action taken
The Ministry of Finance took over the entity and renamed it 1Malaysia Development Berhad.
Aftermath
The new structure enabled nationwide financing and investment but also placed substantial borrowing and governance decisions under federal control.
Sources4 sources
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