One day after U.S. officials moved to seize assets linked to scandal-hit 1MDB, Singaporean authorities named and shamed banks that allegedly helped the Malaysian fund to divert state money into private hands. Several Swiss banks are singled out.
Authorities in Singapore said on Thursday that they have been investigating various funds linked to 1MDB which flowed through the city-state for possible money laundering, securities fraud, cheating, and other offenses, as finews.ch reported exclusively last week.
«Singapore’s investigations began in March 2015 and are still in progress,» according to a joint statement by the Attorney-General’s Chambers Singapore (AGC), the Commercial Affairs Department, (CAD) the Singapore Police Force and the Monetary Authority of Singapore (MAS).
The case's complexity is highlighted by a web of international financial transactions used to filter 1MDB funds through various opaque entities in several offshore centers, intended to disguise owners and beneficiaries.
Swiss Banks
Switzerland's banks bear much of the blame: half the firms named in the statement are Swiss. Banca della Svizzera Italiana, or BSI, already lost its license to operate in Singapore due to its dealings with 1MDB and management's failure to spot them, and gross staff misconduct.
Singapore authorities also identified «control failings» at UBS, Singapore's DBS and U.K.-based Standard Chartered as well as weaknesses in accepting clients and overseeing transactions, and an «undue delay in detecting and reporting suspicious transactions.
Falcon Ongoing
Falcon Private Bank was found to have breached money-laundering regulations, but Singapore's investigation into the Swiss bank continues based on material from Switzerland, where the bank handled some key Asian clients.
Singapore said Raffles Money Change, a licensed money changer and remittance agent, was found have had weak management oversight, inadequate risk management practices and internal controls.
Specifically, RMC failed to identify beneficial owners, verify authenticity of remittance instructions, and assess if a customer’s remittance activities are consistent with the profile of the customer.
Seychelles, British Virgin Islands
The fund flows being investigated include those connected with Good Star Limited (Seychelles), Aabar Investments PJS Limited (BVI), Aabar Investments PJS Limited (Seychelles), and Tanore Finance Corp. (BVI).
The criminal investigations by Singapore's Commercial Affairs Department looks at who is suspected of wrong-doing in connection with 1MDB money. MAS' role is to probe the financial firms which handled 1MDB funds for possible regulatory breaches and control lapses.
$S240 Milllion Seized
Authorities said they seized bank accounts as part of the investigation, and some property dealings had been curtailed. Assets seized totalled S$240 million. Of these bank accounts and properties, about S$120 million belong to Low Taek Jho and his immediate family, authorities said.
Singapore said it has made several requests for information from other countries, and that it had equally been asked to provide assistance on questionable fund flows suspected to have originated from 1MDB. Singapore said it has agreed to those requests.
Singapore's Tough Talk
Authorities said in Singapore left little doubt of how it would proceed: «Appropriate actions will be brought against those who have broken Singapore’s laws,» according to the joint statement.
To date, two individuals – Yeo Jiawei and Kelvin Ang – have been charged for various offences. Several other individuals are still being questioned or investigated.
More Firms Probed
Banks in Singapore served as conduits into the complex 1MDB financial web. Singapore's regulator, which is under pressure to adopt a hard line and set an example in the case, said it will be taking action against UBS, DBS, Standard Chartered, Falcon Private Bank and RMC, without elaborating.
The regulator also said it is examining certain, other unnamed financial firms as part of its probe into 1MDB.
