Crisis-hit Falcon Private Bank's revamp continues, with owner Abu Dhabi suddenly replacing two board members with another representative. The move fulfils sanctions following the 1MDB scandal.

Nothing is as consistent as change at Zurich-based and Abu Dhabi-owned Falcon Private Bank, after its involvement in billion-dollar 1MDB graft scandal emerged.

The Swiss private bank revamped its board in March after regulators found that previous overseers had repeatedly ignored warnings, including from its rank and file.

Now, two more Abu Dhabi representatives, Murtadha M. Al Hashmi and H.E. Khaled Balama AlTameemi, are leaving Falcon's board following a special shareholder meeting, Falcon said in a statement.

Exit After Reelection

Falcon gave no reason for the departures of Al Hashmi, who had been vice-chairman, and AlTameemi, who were both reelected in March. The move comes shortly after Abu Dhabi, which is not part of a U.S.-led investigation into alleged corruption at 1MDB, reportedly buried a billion-dollar spat with the Malaysian state fund.

Abu Dhabi owns Falcon through investment firm Aabar Investments PJS, which will send Cyril Latroche (pictured) to sit on the board.

Cyril Latroche

Latroche has only been with Aabar since 2016 as a member of the firm's investment team. Previously, he was at Mubadala GE Capital a joint venture of GE Capital and Mubadala Development Company, Abu Dhabi's newly-merged sovereign wealth fund.

More Board Independence

Falcon chairman Christian Wenger is quoted in the statement saying Latroche will contribute valuable industry knowledge, particularly of investments. The bank's board is currently made up of Wenger, who is a lawyer, Latroche, Marc Bernegger, Martin Keller and Dominik Schaerer.

The revamp disclosed two months ago was the result of an order by Swiss financial regulator Finma, who insisted on more independent board members. With Latroche's appointment, Falcon now fulfills the requirement better than it did with the March revamp.

Swiss Investigation

Prosecutors and regulators allege that Abu Dhabi representatives in previous years used their position on Falcon's board to enable 1MDB to conduct unlawful business. Swiss prosecutors are looking into the two, Khadem al-Qubaisi and Mohamed Badawy al-Husseiny, who are reported to be in prison back home.

Falcon also lost its license to operate in Singapore, which means it is out of the promising Asian wealth market. In Switzerland, the bank is in the process of fulfilling a series of compliance and risk management requirements, after paying a 2.5 million Swiss franc profit clawback penalty.

The 1MDB scandal was also costly for Falcon in another way: its managed assets collapsed to 11.6 billion francs, and the emirate was forced to inject capital after a major loss.