Last Update 17:9
Monday, 21 October 2019

Swiss approve dissolution of scandal-hit bank BSI

AFP , Tuesday 24 May 2016
BSI
The logo of Swiss private bank BSI is seen at a branch office in Zurich March 31, 2015 (Reuters)
Share/Bookmark
Views: 901
Share/Bookmark
Views: 901

Swiss financial regulators approved Tuesday the dissolution of Lugano-based BSI Bank over its links to a corruption scandal engulfing Malaysia's Prime Minister Najib Razak.

Swiss supervisor FINMA accused BSI, a merchant bank, of "serious breaches" of money-laundering regulations in its dealings with the Malaysian sovereign wealth fund 1MDB, which is at the heart of the corruption allegations.

In the toughest punitive action yet announced in the affair, FINMA said in a statement it was approving the takeover of the merchant bank by Zurich-based private banking group

EFG International on the condition that BSI is integrated "and thereafter dissolved" within 12 months.

It ordered the seizure of 95 million Swiss francs (86 million euros/$96 million) of BSI's "illegally generated" profits.

FINA said it was investigating two former top managers to determine what they knew about the illegal activities, warning that it may launch further probes.

"In the case of 1MDB, the bank executed numerous large transactions with unclear purpose over a period of several years and, despite clearly suspicious indications, did not clarify the background to these transactions," the Swiss regulator said.

The Office of the Attorney General of Switzerland said earlier in the day that it had opened criminal proceedings against BSI "based on information revealed by the criminal proceedings in the 1MDB case".

Malaysia's prime minister, who founded 1Malaysia Development Berhad (1MDB) in 2009, has battled allegations that billions were looted from the investment vehicle in a vast campaign of fraud and embezzlement stretching from the Middle East to the Caymans.

The fund, which ran up more than $11 billion in debt in a series of much-questioned investments, has steadfastly denied money was stolen or that it was in financial trouble.

Najib also faced questions after the Wall Street Journal revealed $681 million in transfers to his personal bank accounts. But since the scandal erupted last year, Najib has weathered the allegations by curbing scrutiny by authorities, purging officials demanding accountability, and stifling media reporting.

He insists the $681 million was a gift from the Saudi royal family, most of which he returned. A Saudi official in April said that was true, but only after weeks of silence that cast doubt on the claim.

Singapore's central bank, which is working with the Swiss authorities in its investigations, said Tuesday that it was kicking out BSI.

Ravi Menon, managing director of the Monetary Authority of Singapore, described the wrongdoing as the "worst case of control lapses and gross misconduct that we have seen in the Singapore financial sector".

The Singapore central bank said it had asked state prosecutors to investigate six senior executives of BSI Bank for possible criminal offences and fined it Sg$ 13.3 million ($9.6 million) for 41 breaches of Singapore's laws against money laundering.

Among those facing investigation is former chief executive Hans Peter Brunner.

Search Keywords:
Short link:

 

Email
 
Name
 
Comment's
Title
 
Comment
Ahram Online welcomes readers' comments on all issues covered by the site, along with any criticisms and/or corrections. Readers are asked to limit their feedback to a maximum of 1000 characters (roughly 200 words). All comments/criticisms will, however, be subject to the following code
  • We will not publish comments which contain rude or abusive language, libelous statements, slander and personal attacks against any person/s.
  • We will not publish comments which contain racist remarks or any kind of racial or religious incitement against any group of people, in Egypt or outside it.
  • We welcome criticism of our reports and articles but we will not publish personal attacks, slander or fabrications directed against our reporters and contributing writers.
  • We reserve the right to correct, when at all possible, obvious errors in spelling and grammar. However, due to time and staffing constraints such corrections will not be made across the board or on a regular basis.
Latest

© 2010 Ahram Online.