NINE QUESTIONS FOR SARAWAK REPORT: CURRENT / SWITZERLAND'S FINMA LOOKING INTO POSSIBLE SWISS CONNECTION TO 1MDB

August 23, 2015

CURRENT / SWITZERLAND'S FINMA LOOKING INTO POSSIBLE SWISS CONNECTION TO 1MDB

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SWITZERLAND'S FINMA LOOKING INTO POSSIBLE SWISS CONNECTION TO 1MDB
REPORTED BY REUTERS

August 19, 2015–

Swiss financial regulator FINMA is checking with some of the country's banks on whether they carried out business with Malaysia's troubled state investment fund 1Malaysia Development Berhad (1MDB), a spokesman said on Wednesday.

1MDB, whose advisory board is chaired by Prime Minister Najib Razak, was the subject of a probe by Malaysia's central bank which was completed earlier this month. The fund has been dogged by controversy over its $11 billion debt and alleged financial mismanagement.

The Wall Street Journal reported in July that investigators looking into 1MDB had traced nearly $700 million that moved from an account at Swiss-based Falcon Private Bank in Singapore into accounts in Malaysia they believed belonged to the prime minister.

Falcon has said previously it was in contact with the Monetary Authority of Singapore (MAS) and would be fully transparent with the authorities.

"FINMA is in contact with several banks about this matter," the spokesman said. "In the framework of our supervisory role, we are clarifying whether and to what extent banks are involved and how the terms of Swiss regulatory law were implemented."

The regulator would not comment on the details of its supervisory activity or on individual names it was looking into, the spokesman added.

Earlier this year, MAS also said it was in touch with Malaysian regulators after Malaysia's government said 1MDB had redeemed $1.1 billion from the Cayman Islands and parked it in the Singapore unit of Swiss private bank BSI.

Representatives for Falcon and BSI did not immediately respond to requests for comment on the FINMA spokesman's remarks.

- Joshua Franklin, Author and David Holmes, Editor

('Switzerland's FINMA looking into possible Swiss connection to 1MDB.' - REUTERS, August 19, 2015)

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RELATED: SWISS LAUNCH CRIMINAL INQUIRY RELATED TO MALAYSIA'S 1MDB
REPORTED BY FINANCIAL TIMES
‘Two entities’ of state fund probed in case involving suspected corruption

Attempts by Najib Razak, Malaysia’s embattled prime minister, to contain a financial scandal have taken a knock after Swiss authorities said they had opened criminal proceedings related to the state development fund at the centre of the affair.

Switzerland’s Office of the Attorney-general said its case involved “suspected corruption of public foreign officials, dishonest management of public interests and money laundering”.

Its confirmation of proceedings involving 1Malaysia Development Berhad, or 1MDB, which has $11bn in debt, marks the potential internationalisation of a case that has so far received mainly domestic scrutiny. The fund, established in 2009 by Malaysia’s finance ministry, is supervised by an advisory board chaired by the prime minister.

The domestic investigation into allegations of mismanagement and corruption at 1MDB has slowed since Mr Najib removed Malaysia’s attorney-general on health grounds and promoted members of a task force that had been co-ordinating the investigation, ending their involvement in the probe. The task force has suspended its work while new members are appointed.

“Effectively all investigations have been stopped,” said Tony Pua, an opposition legislator. “It’s got too close for comfort so Najib has ended the pretence of an independent inquiry and cut everything off.” The prime minister’s office denies any attempt to block the investigation.

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[RELATED: CURRENT / MACC: INVESTIGATIONS INTO RM2.6 BILLION IN PM'S ACCOUNT STILL ON - "In this regard, MACC stresses that the investigation on the case of SRC International Sdn Bhd and the RM2.6 billion are still going on." - MACC - BERNAMA, August 23, 2015]

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Last month Mr Najib also fired Muhyiddin Yassin, the deputy prime minister, who had said the prime minister needed to provide an explanation about how nearly $700m found its way into his personal bank account.

In July, the Sarawak Report, a UK-based blog, and the Wall Street Journal published a report alleging that money in Mr Najib’s account had been moved by agencies, banks and companies linked to 1MDB. Mr Najib vigorously denies any 1MDB link to the money, saying it was a donation from an unnamed Middle Eastern benefactor. That claim was endorsed by Malaysia’s anti-corruption commission.

The Swiss attorney-general said it was investigating “two entities of 1MDB” and an “unknown person”. Two deposits into Mr Najib’s account, amounting to $681m, allegedly came via a Swiss bank from a company registered in the British Virgin Islands, according to documents prepared by Malaysian prosecutors and cited in the Wall Street Journal.

Finma, the Swiss financial regulator, said it was aware of the corruption allegations and was in contact with several Swiss banks about the issue.

Other critics of Mr Najib in Malaysia said they hoped the Swiss investigation would prompt US regulators to look into the issue. Last month Singapore froze two bank accounts in connection with investigations into 1MDB, and the Monetary Authority of Singapore said it would share information with Malaysian investigators. 1MDB said it had not been contacted by Swiss authorities but stood “ready to assist in any investigation . . . subject to advice from the appropriate Malaysian authorities”.

('Swiss launch criminal inquiry related to Malaysia’s 1MDB.' - Financial Times, August 19, 2015)

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RELATED: MALAYSIA'S DEBT-LADEN 1MDB SAYS NOT CONTACTED BY SWISS
REPORTED BY REUTERS

KUALA LUMPUR, August 23, 2015 –

Malaysia's debt-laden state fund 1Malaysia Development Bhd (1MDB) [TERRN.UL] said on Sunday it has not been contacted by Swiss authorities but is ready to assist in any investigation if approached.

Switzerland's Office of the Attorney General on Friday said it had opened criminal proceedings relating to 1MDB, which involved "suspected corruption of public foreign officials, dishonest management of public interests and money laundering".

"We remain committed to fully cooperate with all lawful authorities that are currently investigating 1MDB," 1MDB said in a short written statement.

1MDB, whose advisory board is chaired by Prime Minister Najib Razak, has been dogged by controversy over its $11 billion debt and is being examined by authorities investigating accusations of financial mismanagement and graft.

Najib is trying to reassert his leadership over his government and a stumbling economy following severe criticism after being embroiled in the 1MDB scandal.

In July, the Wall Street Journal reported that investigators looking into 1MDB found that nearly $700 million was deposited into Najib's private bank account. Reuters has not verified the report.

The anti-graft agency has since verified the funds were a donation from the Middle East. It said on August 3 that it would ask Najib to explain why the donation was deposited into his private account.