Prosecutors: 1MDB Money Laundering Probe Largest Ever in Singapore
May 27 2016 - 2:30PM
Dow Jones News
SINGAPORE—A cross-border investigation involving embattled
Malaysian state investment fund 1MDB is the largest money
laundering probe ever undertaken in Singapore, state prosecutors
said Friday.
The prosecutors' statements were made in support of the state's
application to deny bail to Yeo Jiawei, a former wealth manager at
Swiss private bank BSI SA's Singapore branch, who has been charged
with money laundering in relation to the 1MDB investigation. The
High Court overturned a prior decision from Singapore's State Court
to grant Mr. Yeo bail, on the grounds there could be a risk he
would interfere with witnesses.
An investigation led by the Singapore police force's Commercial
Affairs Department focuses on money alleged to have originated at
1MDB and passed through BSI's Singapore branch, according to
documents viewed by The Wall Street Journal.
The prosecutors' comments highlight the scope of alleged
misappropriation of funds at the Malaysian state fund, also known
as 1Malaysia Development Bhd., which is being investigated in at
least six foreign countries including Singapore. Swiss prosecutors
said earlier this year they believe as much as $6 billion has gone
missing from 1MDB.
1MDB has repeatedly denied wrongdoing and said it has cooperated
when contacted by investigators.
Opposition lawmaker Tony Pua, meanwhile, said in a statement
this month that Malaysia's auditor general reported to parliament's
Public Accounts Committee that $7 billion of 1MDB assets and
transactions overseas "cannot be verified or traced."
Malaysia's Prime Minister Najib Razak said Friday that
Malaysia's central bank had filed a police complaint against The
Wall Street Journal for publishing a letter that he says was
classified under the country's Official Secrets Act and which The
Wall Street Journal reported was sent from the central bank to the
Malaysian parliament's Public Accounts Committee.
"This is very serious, publishing a confidential document under
the OSA is a very serious action on their part," Mr. Najib told
reporters in Kuala Lumpur Friday. "They must be able to provide us
with the answers."
Mr. Najib has said he has done nothing wrong in regard to 1MDB.
He has said he cooperated with probes into the fund. Malaysia's
attorney general has cleared Mr. Najib of any wrongdoing.
The letter published by the Journal stated that $1 billion of
1MDB funds sent offshore were transferred into a company called
Good Star, controlled by Low Taek Jho, a Malaysian financier. Mr.
Low helped run 1MDB from behind the scenes and managed Mr. Najib's
bank accounts, the Journal reported in April. Mr. Low has
previously said he was only an occasional and unofficial adviser to
1MDB.
The letter from the central bank appeared to contradict a letter
sent by PetroSaudi International Ltd. to 1MDB, which named the
Saudi oil company as the owner of Good Star and stated that the
money was intended for a joint venture investment. A lawyer for
PetroSaudi said the company stands by the contents of its letter to
1MDB.
A spokeswoman for Dow Jones & Co., publisher of The Wall
Street Journal, said, "We stand behind The Wall Street Journal's
coverage, which has been responsible, appropriate, and in the
public interest."
"We remain committed to providing robust, evenhanded coverage of
events in Malaysia," the spokeswoman said.
In written submissions to the High Court in Singapore, state
prosecutors said Friday that the city's white collar police were
investigating "the most complex and largest money laundering case
ever to have taken place in Singapore." In oral statements,
prosecutors added that the investigations centered on what is
globally "one of the largest money laundering cases ever."
A supporting affidavit from Singapore's police said its
investigation was into "complex, cross-border transactions,
involving staggering sums of moneys."
Mr. Yeo's lawyer said in court that he has been unable to get
clear instructions from his client on whether or not he disputes
the charges, and said that his access had not been sufficient while
his client is in custody. Singapore prosecutors dispute the
contention from Mr. Yeo's lawyer.
Another lawyer for Mr. Yeo said previously that his client
intended to fight the nine charges against him, which include
attempting to pervert the course of justice and money
laundering.
Attempts to reach Mr. Yeo for comment have been
unsuccessful.
Mr. Yeo, appeared in court Friday dressed in purple prison
clothing. He remained silent, and shook his head in disagreement
when the prosecutor accused him of tampering with witnesses and
suggested Mr. Yeo might do it again if released on bail.
Mr. Yeo's previous employer, the Singapore branch of BSI, was
ordered this week to shut down its operations and fined $9.7
million after Singapore's central bank found it had breached money
laundering regulations. Six senior employees of BSI including a
former chief executive and Mr. Yeo were referred by the central
bank to Singapore's attorney general for possible criminal
offenses. On the same day, authorities in Switzerland said they had
opened a criminal investigation into the Swiss parent company for
allegedly failing to prevent suspected money laundering and bribery
relating to its dealings with 1MDB.
BSI said in a statement immediately after the announcements that
its group chief executive officer Stefano Coduri would step down
with immediate effect and that it has cooperated fully with
investigations by regulators in both Switzerland and Singapore.
Write to Jake Maxwell Watts at jake.watts@wsj.com
(END) Dow Jones Newswires
May 27, 2016 15:15 ET (19:15 GMT)
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