29
May
16

Swiss approve dissolution of bank linked to 1MDB scandal

Najib Razak 1MDB scandal: Swiss approve dissolution of scandal-hit bank

Swiss financial regulators have approved the dissolution of Lugano-based BSI Bank over its links to a corruption scandal engulfing Malaysia’s Prime Minister Najib Razak.

Swiss supervisor FINMA accused BSI, a merchant bank, of “serious breaches” of money-laundering regulations in its dealings with the Malaysian sovereign wealth fund 1MDB, which is at the heart of the corruption allegations.

In the toughest punitive action yet announced in the affair, FINMA said it was approving the takeover of the merchant bank by Zurich-based private banking group EFG International on the condition that BSI is integrated “and thereafter dissolved” within 12 months.

It ordered the seizure of $US96 million of BSI’s “illegally generated” profits.

“In the case of 1MDB, the bank executed numerous large transactions with unclear purpose over a period of several years and, despite clearly suspicious indications, did not clarify the background to these transactions,” the Swiss regulator said.

FINMA also said it was investigating two former top managers to determine what they knew about the illegal activities, warning that it may launch further probes.

Earlier on Tuesday, the Swiss Attorney-General’s office said that it had opened criminal proceedings against parent firm BSI SA “based on information revealed by the criminal proceedings in the 1MDB case”.

In a statement noting the Swiss actions, 1MDB said “it has not been contacted by any foreign lawful authority on matters relating to the company”, and was prepared to cooperate with foreign investigators subject to guidance from Malaysia’s Government.

The fund’s investments had not been impacted by the Swiss announcements, the statement added.

On the same day, Singapore’s central bank said it was kicking out BSI, 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”.

In a statement, the Monetary Authority of Singapore (MAS) said it had also asked state prosecutors to investigate six senior executives of BSI Bank Limited, including its former chief executive for possible criminal offences.

Two Singaporean executives of the bank already face charges in the city-state.

…more
Najib Razak 1MDB scandal: Swiss approve dissolution of scandal-hit bank
24 May 2016 – ABC News

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