25
May
16

Swiss Open Criminal Proceedings Against BSI Over Malaysia Fund Allegations – NY Times

Swiss Open Criminal Proceedings Against BSI Over Malaysia Fund Allegations

GENEVA — The authorities in Switzerland said on Tuesday that they had begun criminal proceedings against one of the country’s oldest banks, BSI, after allegations that it had laundered huge sums for “politically exposed” individuals linked to a scandal-plagued Malaysian state investment fund.

The Swiss attorney general’s office said in a statement that it suspected “deficiencies in the internal organization of the BSI S.A. bank” and believed “that due to these deficiencies, the bank was unable to prevent the commission of offenses currently under investigation in the criminal proceedings relating to” the investment fund, 1Malaysia Development Berhad.

The prosecution arose from an investigation that Switzerland started last year into suspected misappropriation of billions of dollars from the Malaysian fund, also known as 1MDB, and that it has pursued in cooperation with the authorities in Luxembourg, Singapore and the United States.

The investigation has strained relations with Malaysia and embarrassed its prime minister, Najib Razak, who is fighting a scandal that has roiled Malaysian politics involving allegations that $681 million was paid into his bank accounts.

The Monetary Authority of Singapore announced separately on Tuesday that it was withdrawing the license of BSI’s Singapore branch “for serious breaches of anti-money laundering requirements, poor management oversight of the bank’s operations, and gross misconduct by some of the bank’s staff.”

The authority said it had considerable evidence of “gross dereliction” of duty by BSI management and had sent prosecutors the names of six senior managers to investigate whether they had committed criminal offenses.

The Swiss attorney general’s office said that it had started proceedings against BSI, the oldest bank in the Swiss canton of Ticino, as a result of its own investigations into transactions linked to 1MDB and on the basis of an investigation by the Swiss Financial Market Supervisory Authority.

In a separate statement on Tuesday, the financial market authority said that “through business relationships and transactions linked to the corruption scandals surrounding the Malaysian sovereign wealth fund 1MDB,” BSI had “committed serious breaches of money laundering regulations.”

…more
Swiss Open Criminal Proceedings Against BSI Over Malaysia Fund Allegations
By NICK CUMMING-BRUCE
MAY 24, 2016 – NY Times

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