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Malaysia 1MDB scandal

We’re not done: Singapore preparing to ‘name and shame’ banks linked to scandal-hit 1MDB

Money-laundering lapses were uncovered during a 15-month ­investigation into fund flows linked to the Malaysian state-fund

PUBLISHED : Monday, 25 July, 2016, 9:32pm
UPDATED : Monday, 25 July, 2016, 9:32pm

Singapore’s central bank chief vowed yesterday to name and shame other banks engaged in money-laundering after a scandal involving Malaysian state fund 1MDB hurt the city-state’s financial reputation.

The money-laundering lapses uncovered during a 15-month ­investigation into fund flows linked to 1MDB are “simply ­unacceptable”, Monetary ­Authority of Singapore (MAS) managing director Ravi Menon told a press briefing.

“There is no doubt that the ­recent findings have made a dent on our reputation as a clean and trusted financial centre,” he said.

Singapore financial institutions were used for dubious 1MDB deals, monetary authority says, citing ‘serious lapses’

The statement is the latest twist in an evolving scandal centred on a fund set up in 2009 to bolster the Malaysian economy, and comes two months after MAS revoked BSI Bank’s licence for breaching money-laundering rules. Allegations that billions of dollars have been improperly ­siphoned out of 1MDB have led to investigations across the globe – spanning from Abu Dhabi, ­Switzerland, and the Caribbean to Hong Kong and the US

At the time of the transactions, it was not apparent to financial regulators worldwide that the fund flows were illicit, he said, adding that clues only started to emerge in 2014 – some four years after the earliest transactions.

MAS began investigations in 2015, Menon said, declining to comment further because of continuing probes.

The MAS, which regulates the financial sector and also functions as Singapore’s central bank, said it would be stepping up ­enforcement. While previous ­reg­ulatory dealings with errant financial ­institutions were kept confid­ential, Menon said some of them would now be named in public, especially in areas ­concerning money-laundering and terrorism financing.

“We are beginning to take a different tack because I think naming and shaming hurts them more than financial penalties,” Menon said.

1MDB money-laundering probe: Singapore seizes ‘large number’ of bank accounts

In a joint statement with the police and the Attorney General Chambers last week, the MAS ­revealed it had seized nearly US$180 million in assets through investigations into 1MDB.

Half of these were linked to Low Taek Jho, a Malaysian businessman and a close family friend of embattled Malaysian Prime Minister Najib Razak.

It came one day after the US Justice Department moved to seize more than US$1 billion in assets allegedly bought with money stolen from 1MDB.

Swiss authorities seized several paintings by Claude Monet and Vincent Van Gogh following a request by the US to confiscate the artworks, a spokeswoman for Switzerland’s Federal Office of Justice said.

Singapore in May kicked out Switzerland’s BSI Bank over “gross misconduct” linked to 1MDB. Swiss financial regulators later dissolved the bank for sim­ilar reasons.

Singaporean authorities last week also said investigations found that Singapore-based DBS Bank, Standard Chartered Bank’s Singapore Branch and Swiss-based UBS had exhibited “undue delay in detecting and reporting suspicious transactions”. It also noted lapses by Swiss bank ­Falcon PBS, saying it was still ­investigating them.

Additional reporting by Agence France-Presse