Singapore shuts down bank involved in 1MDB scandal

..The Monetary Authority of Singapore said it will withdraw BSI Bank Ltd.’s status as a merchant bank for breaches of money laundering rules as the Swiss Attorney General said it was taking legal action based on information from criminal probes into 1Malaysia Development Bhd, or 1MDB. EFG International AG said it received approval on Tuesday from the Swiss authorities to take over BSI and still expects the transaction to be completed, although at a reduced price.

“BSI Bank is the worst case of control lapses and gross misconduct that we have seen in the Singapore financial sector,” Ravi Menon, managing director of MAS, said in the statement. “It is a stark reminder to all financial institutions to take their anti-money laundering responsibilities seriously.”

...The actions are part of the global money laundering and embezzlement investigations surrounding 1MDB. A Malaysian parliamentary committee identified at least $4.2 billion of irregular transactions by the state fund, and recommended the advisory board headed by Prime Minister Najib Razak be disbanded. BSI’s Group CEO Stefano Coduri resigned as the Swiss regulator said it will seize 95 million Swiss francs ($96 million) from the firm and start enforcement procedures against two former bank employees.

1MDB didn’t immediately reply to a request for comment on its links to BSI. Both 1MDB and Najib have consistently denied wrongdoing. BSI said Tuesday that it has cooperated fully with the investigations into 1MDB by the Singapore and Swiss authorities. BSI remains well capitalized, it said.

source: Bloomberg

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