SINGAPORE (May 24): The Monetary Authority of Singapore (MAS) on Tuesday announced it is withdrawing BSI Bank’s status as a merchant bank in Singapore.
MAS said its decision to shut down BSI Bank in Singapore takes into account “serious breach of anti-money laundering requirements, poor management oversight of the bank’s operations, and gross misconduct by some of the bank’s staff”.
MAS also served BSI Bank notice to impose financial penalties amounting to $13.3 million for 41 breaches of MAS Notice 1014 - Prevention of Money Laundering and Countering the Financing of Terrorism.
The breaches include failure to perform enhanced customer due diligence on high risk accounts, and to monitor for suspicious customer transactions on an ongoing basis, MAS said.
MAS has also referred the names of six members of BSI Bank’s senior management and staff to the Public Prosecutor to evaluate whether they have committed criminal offences.
They are: Hans Peter Brunner, former CEO; Raj Sriram, former Deputy CEO; Kevin Michael Swampillai, Head of Wealth Management Services; Yak Yew Chee, former Senior Private Banker; Yeo Jiawei, former Wealth Planner; and Seah Yew Foong Yvonne, former Senior Private Banker.
“BSI Bank is the worst case of control lapses and gross misconduct that we have seen in the Singapore financial sector. It is a stark reminder to all financial institutions to take their anti-money laundering responsibilities seriously,” says MAS managing director Ravi Menon.
“MAS is absolutely committed to safeguarding the integrity and reputation of Singapore’s financial centre. On this, there can be no compromise,” he adds.
BSI, a wholly owned subsidiary of the 143-year-old BSI SA bank headquartered in Switzerland, has been operating as a merchant bank in Singapore since November 2005.
MAS said it is working closely with the Swiss Financial Market Supervisory Authority (FINMA), the home regulator of BSI SA, to oversee an orderly closure of BSI Bank in Singapore.
In a separate statement released today, the Office of the Attorney General of Switzerland (OAG) said it has opened criminal proceedings against the BSI SA bank “based on information revealed by the criminal proceedings in the 1MDB case”.
According to MAS, this is the first time that the regulatory body is withdrawing its approval for a merchant bank since 1984, when Jardine Fleming (Singapore) was shut down for serious lapses in its advisory work.