Singapore's central bank on Tuesday said it was kicking out
Switzerland's BSI Bank, which has been linked to a global
money-laundering scandal that has embroiled neighbouring Malaysia's
Prime Minister Najib Razak.
In the toughest legal action so far in the crisis rocking
Malaysian state fund 1MDB, Switzerland also disclosed it had
launched criminal proceedings against the parent firm BSI SA for
"deficiencies" in its internal organisation.
"BSI Bank is the worst case of control lapses and gross
misconduct that we have seen in the Singapore financial sector,"
Ravi Menon, managing director of the Monetary Authority of
Singapore (MAS), said in a statement.
MAS said it had asked state prosecutors to investigate six
senior executives of BSI Bank for possible criminal offences and
fined it Sg$ 13.3 million ($9.6 million) for 41 breaches of
Singapore's laws against money laundering.
Among those facing investigation is former chief executive Hans
Peter Brunner.
Two Singaporean executives of the bank are already facing
criminal proceedings in the city-state, which is Southeast Asia's
financial hub and hosts more than 200 banks.
BSI has been operating as a merchant bank in Singapore since
November 2005, offering private banking services to wealthy
individuals.
The last time Singapore stripped a merchant bank of its status
was in 1984, when the local branch of Jardine Fleming was shut down
for "serious lapses" in its advisory work.
Najib, who founded 1Malaysia Development Berhad (1MDB) in 2009,
has battled allegations that billions were looted from the
investment vehicle in a vast campaign of fraud and embezzlement
stretching from the Middle East to the Caymans.
- Denials -
The fund, which ran up more than $11 billion in debt in a series
of much-questioned investments, has steadfastly denied money was
stolen or that it was in financial trouble.
Najib also faced questions after the Wall Street Journal
revealed $681 million in transfers to his personal bank
accounts.
But since the scandal erupted last year, Najib has weathered the
allegations by curbing scrutiny by authorities, purging officials
demanding accountability, and stifling media reporting.
He insists the $681 million was a gift from the Saudi royal
family, most of which he returned. A Saudi official in April said
that was true, but only after weeks of silence that cast doubt on
the claim.
In a series of more recent reports, however, the newspaper said
Malaysian investigation documents indicated more than $1 billion in
1MDB-linked money had been funnelled to Najib.
Najib and 1MDB vehemently deny that claim.
Najib has faced calls to resign but has tightened his grip on
the ruling party and thwarted domestic investigations. His position
is not seen as under imminent threat.
Singapore's MAS said it was "working closely" with the Swiss
Financial Market Supervisory Authority (FINMA), which has already
approved the sale of the BSI parent firm to another Swiss-based
bank, EFG International.
The Office of the Attorney General of Switzerland said Tuesday
that it had opened criminal proceedings against BSI SA "based on
information revealed by the criminal proceedings in the 1MDB
case".
In Singapore, former BSI Bank relationship manager Yak Yew Chee
is undergoing a criminal investigation for his dealings with a unit
of 1MDB. His bank deposits have been frozen.
Separately, former BSI Bank wealth planner Yeo Jiawei, also a
Singaporean, faces seven charges including forgery, money
laundering, cheating and perverting the course of justice. He is in
police custody and scheduled to appear in court Tuesday.
-- Yahoo! SG