SINGAPORE (May 30): The Monetary Authority of Singapore (MAS) is imposing a total of $1.6 million in financial penalties on Credit Suisse and United Overseas Bank (UOB), having completed its two-year review of banks involved in the transactions related to 1Malaysia Development Berhad (1MDB).

Credit Suisse faces financial penalties amounting to $0.7 million, while $0.9 million of financial penalties have been imposed on UOB.

In a Tuesday statement, MAS says its latest inspections of the two banks revealed several breaches of anti-money laundering (AML) requirements and control lapses, including weaknesses in conducting due diligence on customers and inadequate scrutiny of customers’ transactions and activities.

The central bank however adds that it did not detect pervasive control weaknesses within these banks, which will be appointing independent parties to assess and confirm to MAS that the rectification measures have been effectively implemented.

“[We have] also instructed the management of Credit Suisse and UOB to take disciplinary measures, where appropriate, against errant staff. The banks are currently taking measures to address the weaknesses identified and strengthen their AML controls,” says MAS.

POs against convicted bank employees
Additionally, MAS has issued lifetime prohibition orders (POs) against former Falcon Private Bank manager Jens Fred Sturzenegger and former BSI Bank employee Yak Yew Chee, while a 15-year PO has been issued against Seah Mei Ying – another former BSI Bank employee who worked with Yak who was formerly known as Yvonne Seah Yew Foong – with effect from May 29.

Yak and Seah were convicted of multiple counts of failing to report suspicious transactions and of forging reference letters at BSI Bank on behalf of financier Low Taek Jho, the alleged mastermind behind the 1MDB global financial scandal.  

Under the POs, Jens, Yak and Seah will be prohibited from providing any capital markets and financial advisory services, as well as from taking part in the management of, acting as a director of, or becoming a substantial shareholder of any capital markets services or financial advisory firm in Singapore.

Other POs to be issued
The central bank has further served notice of its intention to issue POs against:  Kelvin Ang Keng Wee, a former representative of Maybank Kim Eng Securities; Kevin Scully, CEO of NRA Capital, as well as NRA’s former head of research, Lee Chee Waiy.

The proposed POs will prohibit Ang from providing any capital markets and financial advisory services, or taking part in the management of, acting as a director of, or becoming a substantial shareholder of any capital market services and financial advisory firm in Singapore.

On the other hand, the POs against Lee and Scully will prevent them, for a period of six and three years respectively, from providing any financial advisory services or taking part in the management of, acting as a director of, or becoming a substantial shareholder of any financial advisory firm in Singapore.

Through Ang’s introduction, NRA was appointed to perform the valuation of PetroSaudi Oil Services Limited (PSOSL).

(See also: PetroSaudi Oil Services valuation comes to light following 1MDB-linked conviction)

Ang on May 24 was convicted of an offence under the Prevention of Corruption Act for bribing Lee with $3,000 to expedite the preparation of the valuation report on PSOSL.

Apart from accepting the bribe, Lee was also found to have applied inappropriate methodology and assumptions in the valuation of PSOSL, says MAS. It adds that as CEO of NRA, Scully had failed to ensure that his analyst, Lee, had exercised sufficient care, judgment and objectivity in PSOSL's valuation.

Most extensive review to date
MAS’ supervisory review of financial institutions (FIs) involved in 1MDB-related flows is the most extensive it has ever taken, says the central bank.

The review included detailed onsite inspections, offsite examination and analysis of information obtained from the FIs and foreign regulators, and close co-ordination with the Attorney-General Chambers and the Commercial Affairs Department – and uncovered a complex web of transactions involving numerous shell companies and individuals operating in multiple jurisdictions, including the United States, Switzerland, Hong Kong, Luxembourg and Malaysia.

To date, MAS has imposed financial penalties amounting to $29.1 million in aggregate on eight banks for various breaches of AML requirements. The banks are namely: BSI Bank, Falcon Bank, DBS, UBS AG, Standard Chartered Bank, Coutts, Credit Suisse and UOB.

Separately, UOB and Credit Suisse have announced that the profits associated with their lapses found in the 1MDB-linked transactions will be donated to charity and "a worthy cause in support of [Singapore's] community", respectively.