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Malaysia 1MDB scandal

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

DBS Bank, Standard Chartered and UBS AG were among conduits for 1MDB transactions, say Singapore authorities

PUBLISHED : Thursday, 21 July, 2016, 2:38pm
UPDATED : Thursday, 21 July, 2016, 2:38pm

The Monetary Authority of Singapore said Thursday that some financial institutions in the major financial centre were used to facilitate dubious financial dealings linked to scandal-hit Malaysian state investment fund, 1MDB.

“Certain financial institutions in Singapore were among those used as conduits for these transactions,” it said, just a day after the US government moved to seize more than US$1 billion in assets it believes to have been bought with money stolen from 1MDB.

The MAS named Singapore’s DBS Bank and the Singapore branches of Standard Chartered Bank and UBS AG as those in which it has found “serious” lapses.

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It said its overall investigations into the 1MDB case have revealed a “complex international web of transactions involving multiple entities and individuals operating in several jurisdictions.”

There was “extensive layering of transactions and subterfuge aimed at disguising the nature of certain activities and fund flows.”

“In some instances, shell or unauthorised companies domiciled in various jurisdictions were used to conceal the true beneficiaries of the funds,” it added.

The MAS said it also found substantial breaches at Falcon Private Bank in April 2016 and a Singapore remittance firm.

Meanwhile, a separate joint statement from Singapore’s Attorney General’s Chambers, the Commercial Affairs Department, the Singapore Police Force, and the Monetary Authority of Singapore said the city-state’s authorities have so far seized bank accounts belonging to various individuals representing assets amounting to S$240 million (US$176.80 million) in their investigations into possible money-laundering, securities fraud and other offences linked to 1MDB fund flows through Singapore.

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Of these bank accounts and properties, about S$120 million belong to Malaysian financier Jho Low, a longtime friend of Malaysian Prime Minister Najib Razak’s son.

The fund flows being investigated include those connected with Good Star Limited (Seychelles), which belongs to Low, Aabar Investments PJS Limited, Aabar Investments PJS Limited (Seychelles), and Tanore Finance Corp.

In May this year, the MAS withdrew the merchant banking license of Switzerland’s BSI Bank due to serious breaches of anti-money-laundering regulations at the bank’s branch in Singapore. It marked the first time in over 30 years for a merchant bank in Singapore to be ordered to shut down.