In a written response to parliament, the MAS confirms that the family offices identified were linked to individuals convicted related to the wide-ranging money laundering case.
When it rains, it pours might be an apt phrase for the money laundering scandal currently embroiling the city-state.
finews.asia (see links above) has amply reported on the matter since it first broke in 2023, and it continues to pose large-scale ramifications for the once touted family office space in Singapore, as a written response by the Monetary Authority of Singapore (MAS) to the city parliament on Tuesday makes clear.
Clawbacks or Not
Member of Parliament Usha Chandradas asked how many family offices had been granted tax benefits that were subsequently linked to those accused in the money laundering case, wanting to know whether the benefits would be clawed back or not.
The answer was penned by none other than Deputy Prime Minister and MAS Chairman Gan Kim Yong, who identified that a total of six single-family office funds given tax incentives were identified to be linked to individuals or their spouses who had been convicted.
Benefits Withdrawn
Accordingly, the government withdrew the tax benefits starting from this financial year but it would not be clawing them back from prior years unless it saw evidence there were breaches of the incentive awards at that time.
«In addition, as part of enforcement actions in this case, assets have been forfeited from the convicted individuals. The total value of assets forfeited from convicted individuals with links to SFO funds that were awarded tax incentives far exceeds any tax benefits accorded to the SFO funds,» the statement maintained.
Prolonged Scrutiny
As the case continues to make waves, it is sure to keep sustained and prolonged regulatory scrutiny in the family office space in Singapore, something that had been in the offing since early last year, before the scandal broke, when investment requirements were tightened.
Moreover, at the same time, Hong Kong is trying to compete as a family office hub, touting the speed and clarity of its processes although authorities have taken pains to state that any capital was welcome «as long as lawful and rule-compliant», drawing clear links to the recent saga of an ostensible nephew of the Dubai ruling family potentially interested in opening an office in the city.
Looking for Clean Assets
Speed and clarity may even end up being a double-edged sword given the challenge for all family office hubs, in Hong Kong and elsewhere, is how to do a better job figuring out what incoming assets are clean, particularly given family offices cannot open in any jurisdiction and sit there in isolation.
They need local banking relationships, which means that any institution they work with will have to ask for watertight identification and documentation of family relationships, sources of wealth, and sources of funds. Even in the age of fintech, blockchain, and generative AI, that kind of thing still happens at a snail’s pace regardless of the location they choose.
