The Monetary Authority of Singapore (MAS) has completed on its two-year long review of banks from across the globe, involved in transactions related to the 1Malaysia Development Berhad case (1MDB), with Credit Suisse and United Overseas Bank (UOB) the latest to be fined.
In what has been dubbed Singapore’s most extensive anti-money laundering review to-date, MAS said that it has uncovered “a complex web of transactions”, involving numerous shell companies and individuals operating in multiple jurisdictions, including the United States, Switzerland, Hong Kong, Luxembourg and Malaysia.
In its latest regulatory actions, MAS said in a statement announcing the update, that it has imposed fresh financial penalties on Credit Suisse and United Overseas Bank (UOB), amounting to S$0.7m (US$0.5m) and S$0.9 million (US$0.65m) respectively for breaches of MAS Notice 626 – Prevention of Money Laundering and Countering the Financing of Terrorism.
It has also issued Prohibition Orders (POs) against three individuals and served notice of its intention to impose the same regulatory action on three others.
As a result of the investigations, MAS has already shut down two merchant banks, BSI Bank and Falcon Bank, imposed financial penalties of $S29.1m (US$21m) in total on eight banks (BSI Bank, Falcon Bank, DBS, UBS AG, Standard Chartered Bank, Coutts, Credit Suisse and UOB) for various breaches of anti-money laundering (AML) requirements.
Credit Suisse and UOB
MAS said that Credit Suisse and UOB had revealed “several breaches” of AML requirements and control lapses. “These include weaknesses in conducting due diligence on customers and inadequate scrutiny of customers’ transactions and activities,” the statement read. “MAS did not however detect pervasive control weaknesses within these banks.”
MAS added that it has directed the banks to appoint independent parties to assess and confirm to MAS that rectification measures have been effectively implemented. MAS has also instructed the management of Credit Suisse and UOB to take disciplinary measures, where appropriate, against errant staff.
The banks are currently taking measures to address the weaknesses identified and strengthen their AML controls.
As a result, MAS has enhanced its AML surveillance and taken unprecedented enforcement actions against “errant institutions and individuals” and financial institutions have increased their risk awareness and strengthened their AML controls.
“Our financial industry is in a better position today than it was when the abuses stemming from the 1MDB-related flows took place,” said Menon. “The price for keeping our financial centre clean as it grows in size and inter-connectedness is unstinting vigilance.”
Menon confirmed that MAS has also issued prohibition orders against four persons and notified three other individuals of similar actions. POs, ranging from 10 years to lifetime, have been issued against four former employees of financial institutions implicated in these transactions. MAS has notifed another three current and former employees of its intention to issue POs against them, ranging from 3 to 6 years.
Further to its announcement on 13 March, MAS said that has issued lifetime POs against Jens Fred Sturzenegger and Yak Yew Chee, as well as a 15-year PO against Ms Seah Mei Ying, with effect from 29 May.
…continues on page 2
Sturzenegger was the branch manager of Falcon Private Bank Ltd, Singapore branch (Falcon Bank), while Mr Yak and Ms Seah were employees of BSI Bank Limited (BSI Bank). Mr Sturzenegger has been convicted of financial crimes including providing false information to authorities in an attempt to cover up his knowledge of Falcon Bank’s relationship with Mr Low Taek Jho. Mr Yak and Ms Seah were convicted of multiple counts of failing to report suspicious transactions and of forging reference letters at BSI Bank on behalf of Mr Low.
All three individuals are prohibited from (i) providing any capital markets and financial advisory services; and (ii) taking part in the management of, acting as a director of, or becoming a substantial shareholder of any capital markets services or financial advisory firm in Singapore.
Kelvin Ang and NRA Capital Pte Ltd
MAS has served notice of its intention to issue a PO against Mr Ang Wee Keng Kelvin, a former representative of Maybank Kim Eng Securities Pte Ltd (MKES). MAS also served notice of its intention to issue POs against the chief executive of NRA Capital Pte Ltd (NRA), Kevin Scully, and its former head of research, Lee Chee Waiy.
Through Ang’s introduction, NRA was appointed to perform the valuation of PetroSaudi Oil Services Limited (PSOSL)4 On 24 May 2017, Ang was convicted of an offence under the Prevention of Corruption Act for bribing Mr Lee with S$3,000 to expedite the preparation of the valuation report on PSOSL, the MAS statement added..
Lee had been the primary person in NRA working on the valuation. Apart from accepting the bribe, he was also found to have applied inappropriate methodology and assumptions in the valuation of PSOSL. As CEO of NRA, Scully had failed to ensure that his analyst, Lee, had exercised sufficient care, judgment and objectivity in the valuation of PSOSL, MAS said.
The proposed POs will prohibit:
(a) Ang, for a period of 6 years, from (i) providing any capital markets and financial advisory services; and (ii) taking part in the management of, acting as a director of, or becoming a substantial shareholder of any capital market services and financial advisory firm in Singapore;
(b) Lee and Scully, for a period of 6 and 3 years respectively, from (i) providing any financial advisory services; and (ii) taking part in the management of, acting as a director of, or becoming a substantial shareholder of any financial advisory firm in Singapore.