The last year saw two banks closed down in Singapore and numerous regulatory actions against some of the worlds biggest names in wealth management. Now halfway through 2017 the fall-out from the tainted Malaysian wealth fund goes on.
In their latest move, The Monetary Authority of Singapore (MAS) – who must be commended for their tenacious persistence – has fined a local and an international bank and imposed Prohibition Orders on bankers connected with the affair.
Credit Suisse and the local lender United Overseas Bank (UOB) joined a long list of banking heavyweights who have been sullied by the sordid episode.
The Banks and 1MDB
Their names join Falcon Private Bank and the now deceased Banca della Svizzera Italiana (BSI) as banks associated with 1 Malaysia Development Berhad (1MDB) and join DBS, UBS, Standard Chartered and Coutts.
The latest MAS statement said «MAS’ supervisory review of financial institutions (FIs) involved in 1MDB-related flows had been the most extensive it has ever taken». The review included detailed onsite inspections, offsite examination and analysis of information obtained from the FIs and foreign regulators, and close co-ordination with the Attorney-General Chambers and the Commercial Affairs Department.
The review uncovered a complex web of transactions involving numerous shell companies and individuals operating in multiple jurisdictions, including the United States, Switzerland, Hong Kong, Luxembourg and Malaysia.
The Bankers and 1MDB
The regulator has not named the parties but ominously it has said it has notified three current and former employees of its intention to issue Prohibition Orders (PO's) against them, ranging from 3 to 6 years.
Meanwhile those already in the public domain have received further penalties for their involvement with the case. MAS has issued lifetime POs against Jens Sturzenegger and Yak Yew Chee, as well as a 15-year PO against Seah Mei Ying, (formerly known as Yvonne Seah Yew Foong) with effect from 29 May 2017.
PO's have also been issued against Ang Wee Keng Kelvin, a former representative of Maybank Kim Eng Securities and MAS also served notice of its intention to issue POs against the Chief Executive Officer of NRA Capital Kevin Scully, and its former Head of Research Lee Chee Waiy.
Keeping Singapore Clean
Ravi Menon, Managing Director, MAS, said, «The two-year long 1MDB-related review holds key lessons for both MAS and financial institutions in Singapore. MAS has enhanced its AML surveillance and taken unprecedented enforcement actions against errant institutions and individuals.»
«Financial institutions have increased their risk awareness and strengthened their AML controls. Our financial industry is in a better position today than it was when the abuses stemming from the 1MDB-related flows took place. The price for keeping our financial centre clean as it grows in size and inter-connectedness is unstinting vigilance,» Menon added.
