1MDB ‘gave false bank statements on subsidiary’s accounts’

KUALA LUMPUR — A whistleblower website has claimed that debt-ridden state investment vehicle 1Malaysia Development Berhad (1MDB) gave false bank statements pertaining to its subsidiary’s accounts to the Singapore branch of BSI Bank.

1MDB CEO Arul Kanda supplied documents to various authorities to show how a sum of US$1.103 billion (S$1.455 billion) has been redeemed in cash from 1MDB subsidiary Brazen Sky’s offshore fund in the Cayman Islands and stored in US currency in BSI.

However, the Swiss private bank subsequently told the Singaporean authorities that the documents, which included November bank accounts of Brazen Sky, did not originate from them and does not represent a true account of the assets of Brazen Sky, revealed the whistleblower website Sarawak Report.

Responding to TODAY’s queries, a Monetary Authority of Singapore (MAS) spokesperson said that the Singaporean authorities are in touch with their Malaysian counterparts.

“We are committed to assist within the full ambit of our laws. As there are ongoing investigations in Malaysia, it is not appropriate to provide more details,” said the spokesperson.

The spokesperson pointed out that as an international financial centre, Singapore has put in place a robust regime to protect the integrity of its financial system. Financial institutions in Singapore are required to conduct rigorous customer due diligence, regular account reviews, and to monitor for and report any suspicious transactions. In fact, MAS has been engaging the relevant financial institutions in Singapore.

“As a matter of policy, MAS does not comment on its supervisory dealings with specific financial institutions. Due to confidentiality considerations, we are unable to comment on individual banking relationships,” added the spokesperson.

Last month, Prime Minister and Finance Minister Najib Razak, told parliament that the US$1.103 billion has been redeemed from Brazen Sky and deposited in BSI.

The Malaysian Finance Ministry has justified the move as helping to facilitate easier withdrawals since regulations set by the Malaysian central bank mean that the latter’s approval was needed for transactions above RM50 million (S$18.6 million).

Sarawak Report said separate insider information obtained in Singapore had corroborated that there was no actual cash in the relevant Brazan Sky’s account.

Mr Najib last month ordered the Auditor-General and Public Accounts Committee to investigate 1MDB, amid growing demands for explanations over the firm’s allegedly opaque investment decisions and over its amassing a reported RM42 billion debt pile. Mr Najib has been roundly criticised by former Prime Minister Dr Mahathir Mohamad and opposition lawmakers for the alleged failures of 1MDB.

Sarawak Report said it also learnt through separate sources that another major private and corporate customer of BSI Singapore was none other than businessman Low Taek Jho, who is commonly known as Jho Low.

Mr Low has allegedly diverted US$700 million from 1MDB, but declares he is not involved and has been made the fall guy for 1MDB’s failures.

The Sarawak Report also called for a “thorough investigation” by the Singapore authorities on the relationship between Mr Low, BSI and 1MDB.

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