Singapore orders BSI bank unit shut as 1MDB probe widens

Tue May 24, 2016 9:08am EDT
 
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By Anshuman Daga, Saeed Azhar and Joshua Franklin

SINGAPORE/ZURICH (Reuters) - Singapore closed down BSI's operations in the city-state, while Switzerland began criminal proceedings against the private bank, in the biggest international crackdown on financial entities dealing with a scandal-hit Malaysian government fund.

The Monetary Authority of Singapore (MAS) said on Tuesday it had withdrawn BSI Bank's status as a merchant bank in Singapore for serious breaches of anti-money laundering rules, the first time in 32 years it has taken such action against a bank.

In a statement that highlighted an "unacceptable risk culture," regulatory lapses and gross misconduct of some of BSI's staff, MAS said it was also reviewing transactions of other banks in Singapore. (ttp://bit.ly/1TtsyAw)

The central bank has referred five former executives of BSI Bank to the public prosecutor for possible criminal charges, including its previous Asia CEO, Hanspeter Brunner, and another suspended executive.

Brunner did not respond to a request for comment.

"BSI Bank is the worst case of control lapses and gross misconduct that we have seen in the Singapore financial sector," said Ravi Menon, managing director of MAS.

'STRONG SIGNAL'   Continued...

 
A security officer blocks a directory board showing Swiss bank BSI at their office building in Singapore May 24, 2016. REUTERS/Edgar Su