Yahoo – AFP,
Elizabeth Law, 24 May 2016
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Singapore's
central bank has ordered the closure of the local branch of Swiss bank
BSI,
which has been linked to a scandal at Malaysia's troubled state fund 1MDB
(AFP
Photo/Manan Vatsyayana)
|
Singapore
(AFP) - 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.
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Swiss bank
BSI has been linked to a global money-laundering scandal at
Malaysia's state
fund 1MDB (AFP Photo/Roslan Rahman)
|
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.
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Malaysian PM Najib Razak has been under fire over allegations that billions of dollars
were stolen from a state firm he founded, and his own admitted acceptance of a
murky $681 million overseas "donation" (AFP Photo/Mohd Rasfan)
|
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