Switzerland has opened criminal proceedings against the BSI bank, linked to the ongoing case involving Malaysia's troubled state investment fund. Singapore's central bank has also shut down BSI's operations.
The Office of the Attorney General of Switzerland confirmed on Tuesday that it has opened criminal proceedings against the Lugano-based bank BSI. The probe is linked to the ongoing case involving Malaysia's troubled state investment fund 1Malaysia Development Berhad (1MDB).
The prosecutor's office suspects deficiences in the internal organisation of the bank. “It is believed that due to these deficiencies, the bank was unable to prevent the commission of offences currently under investigation in the criminal proceedings relating to 1MDB,” it said in a statement.
The Swiss statement went on to say: "The information suggests that the offences of money laundering and bribery of foreign public officials currently under investigation in the context of the 1MDB case could have been prevented had BSI SA been adequately organised."
1MDB is at the heart of a growing number of investigations over allegations the development fund was used to funnel money to individuals including Malaysian Prime Minister Najib Razak, who heads the fund’s advisory board.
The Swiss opened criminal proceedings against 1MDB last August concerning "suspected corruption of public foreign officials, dishonest management of public interests and money laundering."
Also on Tuesday, the Monetary Authority of Singapore said it had withdrawn the BSI's status as a merchant bank in Singapore. It directed the bank to shut down its operations because of serious breaches of anti-money laundering requirements and other lapses.
In a statement on Tuesday, BSI said that its group CEO Stefano Coduri would step down. It has undertaken steps to strengthen management, including the introduction of a new chief risk officer and the appointment of a new group legal counsel.
In February 2016, EFG International agreed to buy BSI from Brazil’s Grupo BTG Pactual SA, in a transaction which would create Switzerland’s fifth-largest private bank.
jh/jm (AP, Reuters, AFP)