Three Swiss banks as well as a Singapore firm are reportedly being scrutinized for their dealings with Malaysian state fund 1MDB after Banca della Svizzera Italiana, or BSI, was shut down in Singapore.
UBS, Falcon Private Bank, and Coutts International are being reviewed by financial regulator The Monetary Authority of Singapore, «Reuters» reported, citing anonymous. Domestic bank DBS is also among the banks to be evaluated for its dealings with associates of 1MDB, which is suspected of funneling hundreds of millions from state coffers to private banks through a complex web of opaque offshore entities, the newswire reported.
finews.ch had previously reported that UBS reported transactions with 1MDB to Singapore authorities, according to a personal familiar with the matter.
BSI was shut down in the city-state by Singapore and Swiss regulators in May; the bank is in the process of being sold to Swiss bank EFG International.
Fines, Sanctions
The widened probe into 1MDB, which is suspected of using state money for luxury goods, a reelection campaign, and Hollywood blockbuster «The Wolf of Wall Street», could lead to fines and other sanctions, «Reuters» reported, citing sources.
Falcon Private Bank was bought by Abu Dhabi's sovereign wealth fund in 2009. UBS, Coutts, and DBS all declined to comment to Reuters. Falcon repeated past comments that it is in contact and cooperating with Singaporean authorities.
MAS reiterated past statements that is is conducting a review of various transactions and flows of funds through Singapore's banking system.
Singapore Test
1MDB represents a first test for Singapore as a relatively young financial center. The regulator is expected to exert a show of force not just against BSI itself but also against individual bankers like Yeo Jiawei, who is expected to stand trial in the coming months.
The state fund's financial dealings have prompted authorities to look into suspicious transactions in Switzerland, Singapore, the U.S. and elsewhere as part of corruption and money-laundering allegations. Malaysia's own probe into 1MDB has been criticized as flimsy and inadequate by opposition politicians. Prime Minister Najib Razak has repeatedly denied wrong-doing.
