Tuesday, May 24, 2016

BSI Bank directed to shut down in Singapore due to offences linked to 1MDB, but what will happen to the purported US$940 million worth of "units" parked there?

Dato’ Seri Najib Razak’s brainchild, 1Malaysia Development Bhd (1MDB) continued its giant-slaying run after it directly caused the collapse of BSI Bank.

Switzerland's Office of the Attorney General (OAG) has commenced criminal proceedings against BSI SA Bank for allegedly failing to prevent offences linked to 1MDB.

"The criminal proceedings opened on May 23 against BSI SA are based on information revealed by the criminal proceedings related to 1MDB and on issues raised in the Swiss Financial Market Supervisory Authority (Finma) of May 23.  The information suggests that the offences of money laundering and bribery of foreign public officials currently under investigation in the context of the 1MDB case could have been prevented had BSI SA been adequately organised," it said.

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".

This is perhaps 1MDB’s most notable achievement to date because such action has not been taken by the Singapore authorities in the last 32 years.

It is unfortunate that while foreign regulatory authorities are taking stern and punitive actions against individuals, organisations and financial institutions to protect the integrity and reputation of their financial systems and the rule of law, the corresponding Malaysian institutions are trying their best skirt around the massive crime against the state.

While Bank Negara Malaysia was deemed the most “aggressive” institution to investigate and penalise 1MDB and the banks under its purview, at the end of the day 1MDB was barely slapped on the wrist with a compound of an undisclosed sum.  The crooks behind the multi-billion dollar scandal were perhaps properly tickled.

The closure of BSI Bank, Singapore however, piled additional pressure on 1MDB to prove its holdings in the Bank. 1MDB President Arul Kanda has testified to the Parliamentary Public Accounts Committee (PAC) in January this year that US$940 million (RM3.8 billion) worth of mysterious “units” remained safely parked in BSI Bank, Singapore.

With the closure of the Bank, will these assets evaporate together with the Bank?

Otherwise, 1MDB must now “move” this purported “units” to another financial institution.  We call upon 1MDB and the Minister of Finance, Dato’ Seri Najib Razak to explain the steps which will be taken to withdraw the US$940 million worth of assets from BSI Bank and which Bank will they move these assets to.

Better still, 1MDB should liquidate and repatriate the entire sum back to Malaysia to fund its local projects in Bandar Malaysia and Tun Razak Exchange which are in desperate need for financial support.

It should be noted that despite repeated requests by both the Auditor-General and the PAC, 1MDB has adamantly refused to provide bank statements and supporting documents in relation to the above US$940 million of “units” to justify its existence and worth.  The US$940 million forms part of the US$7 billion worth of cash, assets and transactions which could not be verified by the Auditor-General.

Dato’ Seri Najib Razak and Arul Kanda both fail to explain what will happen to the RM940 million “units” from BSI Bank. If not, they have been caught with their pants down lying outright to the Parliament and to the Malaysian public once again.  Malaysians can hence safely conclude that the RM940 million of “units” never existed and the monies have been lost or stolen by the powers that be.

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