Regulators say Falcon persistently flouted money laundering controls, while DBS and UBS received fines for separate lapses that were not ‘pervasive’
Najib Razak, the Malaysian prime minister, has denied wrongdoing in the 1MDB financial scandal. Photograph By Mohd Rasfan, AFP, Getty Images
Singapore’s central bank has shut down a second Swiss bank under investigation for alleged money laundering activities linked to the Malaysian state fund 1MDB.
The Monetary Authority of Singapore (MAS) said it had ordered Falcon Bank to cease its operations in the city-state because of a “persisistent and severe lack of understanding” of Singapore’s money laundering controls.
The MAS announced it had also fined DBS and UBS for similar violations.
“The control lapses observed in DBS and UBS relate to specific bank officers who failed to carry out their duties effectively,” the MAS said, adding that it did not find “pervasive control weaknesses” in these banks.
DBS was ordered to pay Sg$1m (£593,000/US$730,000) for 10 violations while UBS was ordered to pay Sg$1.3m for 13 violations.
The regulator in May kicked out Swiss bank BSI for similar violations – the first time it ordered a bank to shut in 32 years.
Singapore, a regional financial hub, launched a probe into fund flows linked to 1MDB in 2015.
The Malaysian prime minister, Najib Razak, who founded 1MDB, has been heavily embroiled in the scandal but has strongly denied any wrongdoing.
A Malaysian cabinet minister has said Prime Minister Najib Razak was the mysterious unnamed official who the US Justice Department said took part in rampant looting of state funds.
The comment follows widespread suspicions that Najib was “Malaysian Official 1” mentioned in a Justice Department lawsuit filed in July.
The lawsuit – part of US moves to seize more than $1bn in allegedly ill-gotten assets – repeatedly alleged the official was someone conspiring to divert vast sums from state investment fund 1MDB.
Najib, who launched a crackdown last year to contain the spiralling scandal, has so far not commented on the identity of the unnamed official.
But in an interview with the BBC that aired late on Thursday, Abdul Rahman Dahlan, the minister of urban wellbeing, housing and local government, said it was Najib.
“It’s obvious that the so-called ‘Malaysian Official 1’ referred to by the US Justice Department is our prime minister,” he said in a subsequent clarifying statement.
Rahman Dahlan, who also is communications director for Najib’s ruling coalition, did not address whether Najib committed wrongdoing. But he insisted Najib was not a target of the US lawsuit.
His comments, however, will add fuel to persistent calls for Najib to step down.
Tens of thousands of people paralysed the capital, Kuala Lumpur, in August 2015 with two days of protest over the scandal.
Last weekend, several hundred protesters demonstrated, demanding “Malaysian Official 1” be identified and arrested.
Najib, however, has shut down Malaysian investigations, clamped down on media reporting of the affair, and purged critics from his ruling party.
1MDB, or 1Malaysia Development Berhad, was launched by Najib in 2009 and closely overseen by him.
Allegations of a vast international scheme of embezzlement and money-laundering involving billions of dollars of 1MDB money began to emerge two years ago.
1MDB: Malaysia’s PM “Caught Red Handed” — Says He’s Serious About Good Governance — About $1.3 billion of the missing 1MDB $3.5 billion allegedly used to buy assets in the U.S. by people close to Najib
Prosecutors: 1MDB Money Laundering Probe Largest Ever in Singapore (Contains links to many previous 1MDB articles)
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