Twists and turns continue in the criminal and legal wrangling over the scandal-warped Malaysian state fund 1MDB.

Malaysia’s government has failed to prove that the MYR114 million ($28 million) cash seized from a residence linked to former Prime Minister Najib Razak was part of 1MDB’s stolen funds, a judge ruled last week, Bloomberg reported. 

The ruling follows the government’s attempt to forfeit the money, which Najib had claimed was for election purposes. The cash, in 26 different currencies, was part of the MYR1.1 billion of items seized in 2018 amid investigations into the troubled state fund.

The 1MDB scandal, which has touched financial centres including New York, Singapore and Switzerland, has forced yet more soul-searching among the world’s banking sector about its anti-money laundering controls, or lack thereof. In January this year, Goldman Sachs cut chief executive David Solomon’s 2020 pay by 36 per cent after the US firm admitted last year that it had violated US laws in its dealings with 1MDB. The drama surrounding 1MDB blended fact and fiction; money from the fund was used to finance a Hollywood film - The Wolf of Wall Street - about a stock market fraudster.

“Prosecution also failed to tie the funds to any criminal breach of trust case,” Judge Muhammad Jamil Hussin was quoted as saying. He made the ruling in the civil forfeiture case at the Kuala Lumpur High Court, it said. 

A Malaysian court is also hearing an appeal by Najib to overturn his conviction and 12-year jail sentence linked to the 1MDB scandal that brought down his government in 2018.