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Malaysia 1MDB scandal

Malaysia again knocks back Swiss request for help in 1MDB graft investigation

PUBLISHED : Friday, 11 November, 2016, 5:32pm
UPDATED : Friday, 11 November, 2016, 11:06pm

Malaysia has again rebuffed Switzerland’s request for legal assistance in probing suspected corruption linked to scandal-hit state fund 1MDB, the Swiss attorney general’s office said on Friday.

But it said Kuala Lumpur’s decision would not hinder the Swiss probe as it works with other countries on the case.

The Malaysian authorities remain free to use the information provided in Switzerland’s requests for assistance in their own investigations
Attorney General Michael Lauber

“We respect Malaysia’s independent decision on this matter. However, the Malaysian authorities remain free to use the information provided in Switzerland’s requests for assistance in their own investigations,” Attorney General Michael Lauber said, confirming a report by the Financial Times.

“What is certain is that our own criminal proceedings, which are about maintaining the integrity of the Swiss financial system, will continue. We will ask other jurisdictions for support - for example Singapore, with which we have worked very well, other European jurisdictions and the US.”

The FT cited the Malaysian attorney-general’s chambers as saying it was unable to accede to Switzerland’s requests because of a continuing criminal investigation by Malaysian police in relation to matters concerning 1MDB.

Malaysia was committed to co-operating with international partners and there was “no issue of Malaysia blocking the Swiss criminal inquiry”, it added, according to the FT.

A source familiar with the discussions told Reuters that while Swiss officials publicly allude to expectations that Malaysia will cooperate, privately the Malaysians have demanded that the Swiss drop their investigation. Malaysian officials were not immediately available to comment.

Lauber’s office said in January it suspected misappropriations from 1MDB totalled roughly US$4 billion and alleged last month that a Ponzi scheme may have been set up to conceal an alleged US$800 million fraud.

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Swiss federal prosecutors have opened criminal proceedings against two Swiss private banks and four unidentified people over their links to 1Malaysia Development Berhad.

Founded by Malaysian Prime Minister Najib Razak, who chaired its advisory board, 1MDB is the subject of money-laundering investigations in at least six countries including Switzerland, Singapore and the United States. Najib has denied any wrongdoing and said Malaysia will cooperate with the international investigations.

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At the same time, a Singapore court on Friday jailed a former banker who handled Swiss bank BSI’s relationship with 1MDB for 18 weeks for forgery and failure to disclose suspicious transactions.

Yak Yew Chee, who worked as a senior vice president at BSI Singapore, was also a private banker for Malaysian businessman Low Taek Jho, who was described by Singapore authorities as a key figure in the money laundering investigation linked to 1MDB.

Yak pleaded guilty to four of seven charges at Singapore’s state court. He was also fined S$24,000 (US$17,000). Two charges related to forging reference letters vouching for the Low family and two to turning a blind eye to hefty sums – allegedly proceeds from criminal conduct – coursing through BSI bank in Singapore.

Yak is now expected to assist the ongoing 1MDB money laundering investigation.

Singapore earlier this year shut down BSI and Falcon Private Bank in its biggest crackdown on alleged money laundering connected to 1MDB. In May, Singapore’s central bank referred Yak among six members of BSI Bank’s senior management and staff to the public prosecutor to evaluate if they had committed criminal offences in the wake of its money laundering investigation.

Yak earned S$27 million during about four years of work for BSI, including hefty bonuses, court documents showed.