KUALA LUMPUR (Nov 14): The Australia and New Zealand Banking Group Ltd (ANZ) has reportedly admitted to its inability to stop the misappropriation of funds through AMMB Holdings Bhd (AmBank), its Malaysian affiliate, in relation to the controversy surrounding 1Malaysia Development Bhd (1MDB).

The bank said it was unsure whether it can prevent similar scandals in the future, with ANZ chief executive Shayne Elliot saying the bank had limited scrutiny over AmBank’s actions, despite its 24% stake in the bank and the nomination of two of its directors to its board.

“Boards don’t review account opening documents and look at suspicious transaction reporting, obviously, so there was nothing that I saw,” said Elliot, as quoted by the Financial Times. 

“Of course we are nervous about it. But again there is a limit, we just can’t turn up and demand things,” he added. Elliot was on AmBank’s board between June 2013 and October 2015.

To recap, U.S. prosecutors alleged that US$681 million was transferred to an AmBank account registered to a Malaysian public official, whose description matches Prime Minister Datuk Seri Najib Razak.

Elliot — who was not on the board at the time the alleged transactions took place — said there were “clear breakdowns in compliance”, according to the report.

“We wrote to them [AmBank] formally as a shareholder and lobbied or suggested clearly that they act quickly to change their processes, as you would imagine,” he said. 

“I’m confident they have improved. Because we don’t run the place, I can’t tell you with any certainty that they have improved enough,” added Elliot.