Singapore fines banks for 1MDB Fund links

Singapore fines banks for 1MDB Fund links

Singapore, a regional financial hub, past year launched a probe into alleged unlawful fund flows linked to 1MDB.

The Monetary Authority of Singapore said it meant to issue a prohibition order against former Goldman director Tim Leissner for allegedly making false statements on behalf of the investment bank without its knowledge of consent.

The inspection at Standard Chartered "revealed significant lapses in the bank's customer due diligence measures and controls for ongoing monitoring", the Monetary Authority of Singapore said.

Lapses stemmed from inadequacies in policies and procedures, insufficient independent oversight of front office staff, and a lack of awareness of money laundering risks among some bank staff, said the MAS.

MAS notes that the bank has proactively taken measures to address the weaknesses identified and strengthen its controls.

Singapore's financial regulator said Friday it has fined two British banks and barred a former Goldman Sachs banker in a widening crackdown on money laundering linked to Malaysian state fund 1MDB. The bank has since become embroiled in a scandal over allegations of grand corruption relating to 1MDB.

Regulators also fined the Singapore branch of private bank Coutts 2.4 million Singapore dollars ($1.7 million) for inadequate customer due diligence on "politically exposed persons". The relationships for these PEP customer accounts were established between 2003 and 2009.

Yak Yew Chee, a former Coutts private banker who had joined BSI, was last month jailed in Singapore on fraud charges related to the multi-billion dollar scandal.

Coutts International, which was sold by the Royal Bank of Scotland to Union Bancaire Privee in 2015, is in the process of winding down its Singapore operations.

MAS said in the statement that it had "served notice of its intention to issue a prohibition order" against Mr Leissner.

The order would prohibit Leissner from taking part in the management of any capital market services in Singapore for 10 years. However, he maintained his representative status with GS Singapore till his resignation from Goldman Sachs in February 2016 and was therefore subject to MAS' requirements to being fit and proper to carry out regulated activities.

"The letter stated that Goldman Sachs had conducted due diligence on Mr Low Taek Jho and his family, and had not detected any money laundering concerns with respect to Mr Low or his family".

MAS added these statements were untrue and were made by Leissner without Goldman's knowledge. A team comprising Goldman Sachs staff mainly from Hong Kong, but also from Singapore, Malaysia and the United Arab Emirates, arranged these bond issues, and they were fully underwritten by London-based Goldman Sachs International.

Goldman is not accused of any wrongdoing by the Singapore authority, but the regulator confirmed that it was working with foreign counterparts on an examination of the bank's role in the 1MDB bond transactions.

Singapore's central bank said it was nearing the end of its 1MDB-related investigations and will provide a final update early next year.

"Prior to today, Mr Leissner had not heard of any contemplated regulatory action by the MAS and had not been contacted by the MAS or given any opportunity to respond to the MAS regarding the allegations raised", the lawyer's statement said. "These actions send a strong signal that we will not tolerate the abuse of Singapore's financial system for illicit purposes".