The global investigations related to 1MDB have ensnared a 143-year-old Swiss bank.
The Monetary Authority of Singapore have acted against BSI SA’s unit in the city-state by imposing fines ($13.3 million for 41 breaches) and revoking their merchant banking license. Already, six senior bank executives have been referred to the prosecutor to establish if they had committed criminal offenses.
Yeo Jiawei is the first banker to be slapped with a total of seven charges including that for money laundering, cheating involving millions of dollars, perverting the course of justice and forgery – allegedly linked to Malaysia's troubled 1MDB.
The second individual charged in connection with the same probe is Kelvin Ang. He was charged last month under the Prevention of Corruption Act for bribing a research analyst of an equity research company S$3,000 to "expedite the preparation of a favorable valuation report".
Amidst the unsettling news, the Malaysian state fund are still insisting their fund investments have not been impacted by MAS’s move against BSI Singapore. It looks like they are in denial.
Anyway, previous 1MDB announcements showed that BSI Singapore hold about $1.1 billion (RM4.5 billion) of their funds in the form of “units”. The amount was part of $2.3 billion that 1MDB had placed with a Cayman Islands fund manager in 2012. No specific mention of the funds was made by 1MDB.
The MAS directive came after serious shortcomings were detected in BSI Singapore over the course of five years. A more intrusive third inspection by MAS in 2015 revealed multiple infractions of anti-money laundering regulations and a pervasive pattern of non-compliance.
Almost at the same time, the Swiss attorney-general office’s launched a criminal inquiry into parent bank BSI SA – after an investigation by Finma (Financial Market Supervisory Authority) found the said bank to be also in “serious breach” of anti-money-laundering requirements. Yesterday, BSI SA group CEO Stefano Coduri stepped down.
Finma had said in the case of 1MDB, BSI Singapore had executed many large transactions with unclear purpose over several years and, despite clearly suspicious indications, did not clarify the background to these transactions. Among other measures, Finma had ordered the seizure of profits amounting to Sfr95 million (RM394.7 million) from BSI SA.
1MDB will continue to stay in the news. Until somebody in Malaysia gets charged and goes to jail.
On Tuesday, I was in Bukit Damansara, KL to attend the MII Toastmasters meeting. I volunteered to be the Toastmaster-of-the-Evening. I generously filled the meeting room with so much energy that I uplifted the participants. Really, I did just that!