The authorities in Singapore said on Thursday that they had identified significant lapses in anti-money laundering controls at three banks tied to a global investigation into money from a Malaysian sovereign wealth fund.
A joint announcement by Singapore's central bank, the city-state's police force and the attorney general's office cited the local branches of the banks - the local lender DBS Bank, Standard Chartered and UBS - for "lapses and weaknesses" in controls.
The findings by Singapore came a day after the United States Justice Department said it had frozen properties and other assets worth more than $1 billion that had been acquired with money stolen from the Malaysian fund - called 1Malaysia Development Berhad, or 1MDB - by people close to Malaysia's embattled prime minister, Najib Razak. As part of the American case, Swiss authorities are seizing several paintings, including one by Vincent van Gogh and two by Claude Monet. The Federal Office of Justice in Switzerland would not elaborate further, saying the operation was continuing.
The Singapore authorities opened their own investigation into 1MDB-related flows of money last year. On Thursday, the authorities said they had seized 240 million Singapore dollars, or $177 million, worth of bank accounts and properties. About half of that belonged to the financier Jho Low and his immediate family, according to the statement from Singapore. Low is a friend of Najib's stepson and was named on Wednesday in the Justice Department order, though he was not charged.
Regarding the role played by DBS, Standard Chartered and UBS, the Singapore authorities said they had found "control failings" at all three banks and, in some cases, "weaknesses in the processes for accepting clients and monitoring transactions."
The authorities also cited the banks for "undue delay in detecting and reporting suspicious transactions," though they added that they had not identified misconduct by members of staff.
In separate statements, the three lenders said that they took their compliance obligations seriously and had reported transactions to the authorities. They also said they were cooperating with the authorities.
In the American investigation, the forfeiture complaint announced on Wednesday was issued by a unit known as the Kleptocracy Asset Recovery Initiative and represents the largest such case brought by the Justice Department.
The targeted assets include a $30.6 million Manhattan penthouse and a mansion in Los Angeles, properties that were bought by Mr. Najib's stepson, close friends and other associates after they diverted more than $3 billion from the Malaysian sovereign wealth fund, according to the complaint. Other high-profile outlays in the United States included the financing of movies like "The Wolf of Wall Street" and the financing of purchases of paintings by Picasso and Monet.
Speaking to reporters on Thursday, Mr. Najib said his administration would "fully cooperate" with the American inquiry. "Allow the process to take its course, but I want to say categorically that we are serious about good governance," he said, according to The Associated Press.
Earlier on Thursday, the Malaysian attorney general's office said in a statement that there was " no evidence from any investigation conducted by any law enforcement agencies in various jurisdictions which shows that money has been misappropriated from 1MDB."
It also expressed "strong concerns at the insinuations and allegations that have been made against the Prime Minister of alleged criminal wrongdoing."
Source: Business Standard