Thursday, May 26, 2016

Will BNM follow the footsteps of Swiss and Singaporean authorities in investigating the suspected money-laundering related to 1MDB and Dato' Seri Najib Razak?

Switzerland's Office of the Attorney General (OAG) has commenced criminal proceedings against BSI SA Bank for facilitating the offences of money laundering and bribery of foreign public officials in relation to 1MDB.

Simultaneously, the Monetary Authority of Singapore shut down BSI Bank operations in the island-state. The grounds provided include "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 contrast, what has Bank Negara done to protect the integrity of our financial system? Despite the fact that Malaysia is being ridiculed globally and cited as an example of a rogue state run by kleptocrats, Bank Negara has barely bared its purportedly powerful fangs to indict those who have been responsible.

Despite being arguably the most “aggressive” regulatory agency to investigate 1MDB in Malaysia, Bank Negara barely scratched the surface of the entire scandal.

The central bank had made hue and cry over how 1MDB illegally transferred US$1.83 billion overseas, and the demands that 1MDB return the funds immediately.  But it all ended with a whimper when Bank Negara agreed to close the chapter by slapping 1MDB on the wrist with a compound. 1MDB proudly issued a statement that it has paid the fine yesterday.

To rub salt on Malaysians’ wounds, the quantum of the fine was undisclosed, so it could be a pitiful RM4,000 for all we know.

Hence instead of becoming the agency which acts without fear or favour that Malaysians are proud of, Bank Negara has blemished it’s much-vaulted reputation and brought shame to the country.

Instead today, Bank Negara allowed itself to be used by the alleged money-laundering suspects to acquit themselves.

Department of Special Affairs (Jasa) director-general and an UMNO warlord, Mohd Puad Zarkashi when explaining Dato’ Seri Najib Razak’s “donation” scandal, told students in Australia that the Prime Minister had discussed the matter with then Bank Negara governor Zeti Akthar Aziz and even received the central bank's approval to bring in the money.

Dato’ Seri Najib Razak has been accused of receiving more than US$1 billion (RM4.1 billion) in his personal account with AmBank Bhd, a sum which he had not denied.

Hence the question for Bank Negara is, did Dato’ Seri Najib Razak indeed obtained approval from Bank Negara and has the information on the source of funds been diligently verified since it has brought disrepute to the country?

Segambut Member of Parliament, Lim Lip Eng had already submitted a letter on 5 August 2015 asking the central bank to clarify if the transaction complied with the Anti-Money Laundering and Anti-Terrorism Financing Act 2013 (“AMLA”).

Under Section 4 of the Act, any person is deemed to have committed an offence if he or she:

a)  engages, directly or indirectly, in a transaction that involves proceeds of an unlawful activity or     instrumentalities of an offence;
b)  acquires, receives, possesses, disguises, transfers, converts, exchanges, carries, disposes of or uses proceeds of an unlawful activity or instrumentalities of an offence;
c)   removes from or brings into Malaysia, proceeds of an unlawful activity or instrumentalities of an offence; or
d)  conceals, disguises or impedes the establishment of the true nature, origin, location, movement, disposition, title of, rights with respect to, or ownership of, proceeds of an unlawful activity or instrumentalities of an offence,

Dato’ Seri Najib Razak and his UMNO cheerleaders have insisted that the incredibly large sums the Prime Minister received were “donations” from an unnamed Middle-Eastern individual.  However, that excuse, even if it were unbelievably true, does not absolve the Prime Minster from the purview of AMLA.  That is because even a “donation” could have originated from illegal and illicit sources via complex money-laundering mechanisms.

Bank Negara Malaysia, as the “competent authority” under the AMLA, must confirm if the Prime Minister has been investigated under the law and if he has been cleared.  Silence from Bank Negara is not an option.

The failure to investigate or confirm the above would only mean that the central bank has abdicated its powers and severely neglected its responsibility to protect the integrity of our financial system, especially when compared to the actions of foreign central banks to date.
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