Posted: 18 Jul 2016 04:15 AM PDT
BY A ANANTHALAKSHMI AND SAEED AZHAR (BUSINESSDAY)
18 JULY 2016
SINGAPORE — Singapore's central bank was scrutinising several banks, including UBS and DBS Group Holdings, to see if they broke rules against money laundering in handling transactions linked to scandal-hit Malaysian state fund 1MDB, three people with knowledge of the matter said.
The Monetary Authority of Singapore was looking at several aspects of the banks' operations, sources said.
Switzerland's Falcon Private Bank and Coutts International, which is owned by Geneva-based Union Bancaire Privee, were also under review, they said.
Malaysian companies and banks linked to 1MDB are at the centre of corruption and money laundering probes that have led investigators to look at transactions and financial relationships across the globe — from Malaysia to Singapore and the Seychelles, from Abu Dhabi to offshore companies in the Caribbean, and from the US to Switzerland. A Malaysian parliamentary investigation found that $4.2bn of 1MDB's money was unaccounted for or went to overseas bank accounts whose owners could not be ascertained.
UBS, Coutts and DBS, which is Singapore's top lender, all declined to comment.
A Zurich-based spokesman for Falcon said: “We have transparently shared our view and have nothing to add.”
Falcon, owned by one of the world's leading sovereign wealth funds, Abu Dhabi's International Petroleum Investment Company, has previously said it was in contact with Singapore's central bank and was co-operating.
The Monetary Authority of Singapore was in talks with several banks and would make an announcement on any punitive action against them after the review was completed, sources said. The full details are not known at this stage.
“It is important for Singapore to be seen to be taking action against any abuse of its private banking sector for money laundering,” said Nizam Ismail, Singapore-based partner at RHTLaw Taylor Wessing, where he advises on financial services, regulation and compliance.
A spokeswoman for the authority referred Reuters to its statement in March, when it said that “as part of its investigations into possible money laundering and other offences in Singapore, it has been conducting a thorough review of various transactions as well as fund flows through our banking system”.
1MDB referred Reuters to its earlier statements. In May, it said it had not been contacted by any foreign lawful authority on matters relating to the company and that it would co-operate fully with the authorities.
The latest probes follow the authority's decision in late May to close down the operations of Swiss private bank BSI in Singapore for serious breaches of antimoney laundering rules, the first time in 32 years it has taken such action against a bank.
The authority did not specifically say this related to 1MDB-related transactions, though the Swiss Financial Market Supervisory Authority said at the time that BSI had committed serious breaches of money laundering regulations through business relationships and transactions linked to the corruption scandal surrounding 1MDB.
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