06
Nov
16

Behind the 1MDB scandal – Part 6

Behind the 1MDB scandal: How banks missed clues and bowed to pressure

The 1MDB fund approached Goldman again in 2013 to sell $US3 billion of bonds, asking for the money to be deposited in an account at BSI AG, a small private bank based in an Italian-speaking region of Switzerland. BSI was looking to build its business in Asia through a new office in Singapore.

Clients involved with 1MDB had around 100 accounts at BSI, Swiss regulators say. They include Mr Low, who opened 18 accounts in Singapore in one day in October 2014. Hundreds of millions of dollars of 1MDB money moved through BSI accounts controlled by Mr Low and others, according to the Justice Department and banking documents reviewed by the Journal.

Mr Low’s main contact at BSI was Singapore banker Yak Yew Chee, who brought in the 1MDB-related business, according to a person who worked at the bank. Singapore’s central bank in May asked state prosecutors to investigate six former BSI executives, including Mr Yak, for possible criminal offences. A lawyer for Mr Yak, who has left the bank, declined to comment, citing the investigation.

One former BSI banker, Yeo Jiawei, has been charged in Singapore with money laundering in relation to the 1MDB affair. His lawyer says he intends to contest the charges.

About half the Goldman bond proceeds wound up in offshore companies controlled byEric Tan, an associate of Mr Low, according to the Justice Department. He used the money to buy more than $US100 million of art on Mr Low’s behalf, including a Vincent van Gogh pen-and-ink drawing, the complaint says.

He told the auctioneer, Christie’s International PLC “please do not have Mr Low in any document,” according to emails cited in the US filings. When Mr Tan later transferred ownership of works to Mr Low, there were letters that described them as gifts, the complaint says.

The art works “should not in any event be construed as an act of corruption,” the letters said, echoing phrasing from earlier letters. Mr Tan couldn’t be reached for comment.

Christie’s has said it has a rigorous anti-money-laundering program and stopped doing business with Mr Low after learning he was under investigation.

By the spring of 2014, Mr Low valued his art collection at $US350 million and wanted to use that as collateral for a loan, according to emails cited by the Justice Department.

In emails to an employee of SNS Fine Arts, a New York dealer, he asked for advice on possible lenders. He said he was searching for one that wouldn’t follow know-your-customer rules too closely. “Speed is the most important and one with a fairly quick and relaxed kyc process,” he wrote. SNS declined to comment.

Sotheby’s Financial Services, part of the Sotheby’s auction house, agreed to lend $US107 million to a Cayman Islands company owned by Mr Low. Sotheby’s said it is co-operating with government investigations. A spokeswoman said: “Sotheby’s, like many other entities, including prominent law firms, major banks, real-estate companies and corporations in other industries, fell victim to ‘a complex web of transactions’ designed to hide and disguise the alleged illegal source of funds.”

…more
Behind the 1MDB scandal: How banks missed clues and bowed to pressure
Tom Wright, Bradley Hope
Wall Street Journal
September 6, 2016 – The Australian


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REJECT such a leader!
We cannot afford ridiculously expensive RM55 Billion ECRL!
All that is necessary
for the triumph of evil
is for good men
to do nothing.

- Edmund Burke
When the people
fears their government,
there is TYRANNY;
when the government
fears the people,
there is LIBERTY.

- Thomas Jefferson
Do you hear the people sing?

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