5 December 2016
Last week Monetary Authority of Singapore fined two branches of British banks. Standard Chartered Bank was fined $3.65 million, while Coutts bank was fined $ 1.66 million. Coutts is a private bank and wealth manager, founded in 1692. It is the seventh oldest bank in the world. In 2015, Coutts was sold to Union Bancaire Privee of Switzerland.
MAS said that the fines were imposed for breaches in anti-money laundering regulations in 1MDB-linked transactions.
1MDB scandal involves Malaysian Prime Minister Najib Razak, who had set it up. While Najib continues to deny any wrongdoing, he demands absolute support of UMNO party members in the upcoming general elections in Malaysia.
MAS revealed that there were “significant lapses” in due diligence measures in the Standard Chartered Bank. It also said that that some staff were unaware of money laundering risks. It added that it “did not find pervasive control weakness or wilful misconduct” at the bank.
Coutts was fined for a lack of due diligence on customers deemed “politically exposed persons”, a term referring to people with close government or political connections. In this instance, it refers to Malaysian Prime Minister Najib Razak and his 1MDB.
Understandably, it is painful for Singapore government to take drastic actions which would jeopardize the healthy relationship with its neighbour. But in the 1MDB case Singapore is collaborating with Switzerland and the United States in the investigations.
Earlier on MAS closed Singapore branches of BSI and Falcon, two Swiss-based private banks. Yak Yew Chee, a former Coutts private banker who later became BSI Managing Director was sentenced last month for 18 weeks’ jail and fined S$24,000. Yak was also a private banker for Malaysian financier Low Taek Jho, who had helped the Malaysian Prime Minister set up 1MDB. Low is a close family friend of Najib. Low had set up the company in such a way that it would be easy to swindle money from it. Here we can see the PM Naib’s connection to the fraud in 1MDB.
US authorities have frozen more than US$1 billion in assets of Low, PM Najib’s stepson Mr Riza Aziz and Mr Mohamed Badawy al-Husseiny, a former official at a government fund in Abu Dhabi, United Arab Emirates, that participated in deals with Malaysia’s fund.
MAS also banned former Goldman Sachs director Tim Leissner from working in the Singapore finance industry for 10 years. Tim, a friend of Najib’s and Jho Low. Tim fixed up all the dodgy 1MDB bond deals totalling $6.5 billion in collaboration with two Abu Dhabi fund managers.