Sec­ond bank linked to 1MDB Malaysia scan­dal shut down

The Myanmar Times - - International Business -

SIN­GA­PORE’S cen­tral bank yes­ter­day shut down a sec­ond Swiss bank un­der in­ves­ti­ga­tion for al­leged money-laun­der­ing ac­tiv­i­ties linked to Malaysian state fund 1MDB as it vowed strong ac­tion against vi­o­la­tors.

The Mon­e­tary Author­ity of Sin­ga­pore (MAS) said it had or­dered Fal­con Bank to cease op­er­a­tions be­cause of “se­ri­ous fail­ures in an­ti­money-laun­der­ing [AML] con­trols and im­proper con­duct” by se­nior man­age­ment both at the head of­fice in Switzer­land and the lo­cal branch.

“Fal­con Bank has demon­strated a per­sis­tent and se­vere lack of un­der­stand­ing of MAS’ AML re­quire­ments and ex­pec­ta­tions,” it said.

“Tak­ing into ac­count the to­tal­ity of Fal­con Bank’s con­duct, MAS’ as­sess­ment is that the mer­chant bank will be un­able to com­ply with these re­quire­ments and ex­pec­ta­tions go­ing for­ward.”

The cen­tral bank said it im­posed fi­nan­cial penal­ties to­talling S$4.3 mil­lion (US$3.1 mil­lion) on Fal­con Bank for 14 breaches of a law on pre­vent­ing money laun­der­ing and coun­ter­ing the fi­nanc­ing of ter­ror­ism.

MAS also said it had re­ceived in­for­ma­tion that Fal­con Bank’s Sin­ga­pore branch man­ager, Jens Sturzeneg­ger, had been ar­rested on Oc­to­ber 5 by the Com­mer­cial Af­fairs Depart­ment (CAD), the gov­ern­ment’s white-col­lar crime in­ves­ti­ga­tion agency.

Sin­ga­pore, a re­gional fi­nan­cial hub, last year launched a probe into il­licit fund flows linked to 1MDB.

Al­le­ga­tions of mis­ap­pro­pri­a­tions of mil­lions of dol­lars from 1MDB have trig­gered a cor­rup­tion scan­dal in neigh­bour­ing Malaysia that has em­broiled Prime Min­is­ter Na­jib Razak. Both Mr Na­jib and 1MDB have strongly de­nied any wrong­do­ing.

Switzer­land and the United States are also con­duct­ing their own in­ves­ti­ga­tions into 1MDB.

MAS an­nounced that it has also fined lo­cal bank DBS and Swiss lender UBS for sev­eral breaches of an­ti­money laun­der­ing re­quire­ments.

It said the “con­trol lapses ob­served in DBS and UBS re­late to spe­cific bank of­fi­cers who failed to carry out their du­ties ef­fec­tively” and that it did not find “per­va­sive con­trol weak­nesses” in these banks.

DBS was or­dered to pay S$1 mil­lion for 10 vi­o­la­tions while UBS was or­dered to pay S$1.3 mil­lion for 13 breaches. The reg­u­la­tor in May kicked out Swiss bank BSI for sim­i­lar vi­o­la­tions linked to the 1MDB probe, the first time it or­dered a bank to shut in 32 years.

At least three for­mer BSI pri­vate bankers have been charged in Sin­ga­pore in re­la­tion to the in­ves­ti­ga­tions.

In July, Sin­ga­pore authorities said they had seized nearly US$180 mil­lion in as­sets through in­ves­ti­ga­tions into the 1MDB scan­dal.

Half of these as­sets were linked to Low Taek Jho – known as Jho Low – a jet-set­ting Malaysian fi­nancier who is a close fam­ily friend of Mr Na­jib. He helped set up 1MDB and played a key role in its fi­nan­cial de­ci­sions.

Sin­ga­pore closely guards its rep­u­ta­tion for fi­nan­cial in­tegrity and has ad­mit­ted that money laun­der­ing hurts its im­age.

The MAS also said it is in the fi­nal stages of as­sess­ment for the Sin­ga­pore branch of Stan­dard Char­tered Bank and has re­ferred Raf­fles Money Change, a lo­cal fi­nan­cial com­pany, for in­ves­ti­ga­tion by the CAD.

The MAS said clients are as­sured that Fal­con Bank, which is a branch of Fal­con Pri­vate Bank Ltd in Switzer­land, “has the full sup­port of its head of­fice, which is fi­nan­cially sound”.

Fal­con Pri­vate Bank is owned by the In­ter­na­tional Pe­tro­leum In­vest­ment Com­pany from Abu Dhabi, one of the world’s lead­ing sov­er­eign wealth funds.

Ear­lier, on Oc­to­ber 10, Sin­ga­pore charged two more for­mer pri­vate bankers with forgery and fail­ing to re­port sus­pi­cious trans­ac­tions in cases linked to 1MDB.

Yak Yew Chee and Yvonne Seah were both hit with seven charges – three for forgery and four for fail­ing to re­port sus­pi­cious trans­ac­tions, court doc­u­ments showed. Both worked for BSI.

The 57-year-old Mr Yak had worked as a pri­vate banker for Mr Low, his lawyer said.

Ac­cord­ing to the charge sheets, Mr Yak is ac­cused of forg­ing three ref­er­ence letters to Swiss banks and funds, and of fail­ing to re­port sus­pi­cious money trans­fers in­volv­ing ac­counts be­long­ing to Mr Low.

In the ref­er­ence letters, which were dated Fe­bru­ary 2014, Mr Yak said the Low fam­ily was worth $1.63 bil­lion.

Sin­ga­pore has also charged an­other ex-BSI banker Yeo Ji­awei and an­other man with var­i­ous of­fences. Sev­eral other peo­ple are be­ing ques­tioned. –

Photo: AFP

The Cen­ten­nial Tower where the Fal­con Bank of­fice in Sin­ga­pore is lo­cated.

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