You are here

BSI said to probe bank employees on 1MDB-related dealings

1mdb170516.jpg
BSI SA, the Swiss bank embroiled in global probes into 1Malaysia Development Bhd, is said to be investigating employees and their dealings related to the embattled Malaysian state investment fund, according to people familiar with the matter.

[SINGAPORE] BSI SA, the Swiss bank embroiled in global probes into 1Malaysia Development Bhd, is said to be investigating employees and their dealings related to the embattled Malaysian state investment fund, according to people familiar with the matter.

One of the employees the private bank is investigating in Singapore is Kevin Swampillai, the manager of the first banker to be charged in the country amid investigations stemming from 1MDB, according to the people.

Mr Swampillai, the managing director of wealth management services, has been suspended pending investigation, the people said, declining to be named because of the matter's sensitivity. He hasn't been accused of any wrongdoing by Singapore authorities.

BSI's ongoing inquiry comes as authorities across the globe examine claims that 1MDB was used to funnel money to politically-connected individuals. The Swiss bank had introduced 1MDB to a Cayman Islands fund which received a US$2.32 billion investment, according to a report from a Malaysian parliamentary hearing.

That investment and transactions related to it is the subject of criminal probes, including those conducted in Singapore.

BSI has kept the Monetary Authority of Singapore informed of the progress of its inquiry, the people said. Mr Swampillai's lawyer Kenneth Pereira declined to comment.

BSI, speaking through its external public relations representative in Singapore, said Monday it had no comment to make on the matter.

Yeo Jiawei, a former BSI wealth planner, became the first banker to be charged a month ago amid investigations into the Malaysian fund. Mr Yeo was said to have proposed investment products to 1MDB while at the bank.

Mr Swampillai was one of two men mentioned in one of the obstruction-of-justice charges against Mr Yeo. A third man was mentioned in a separate charge. The other two men were not from BSI.

Mr Yeo, 33, was accused of asking Mr Swampillai in March to falsely inform the police that sums transferred to an entity beneficially owned by Mr Yeo was another man's investments.

Prosecutors in Singapore have described Mr Yeo as having a key role in moving "staggering" amounts of money. He has been accused of money laundering and cheating BSI by hiding a US$1.6 million annual payment he would receive, which was alleged to be a portion of the management fee paid by 1MDB subsidiary Brazen Sky to the manager of the Cayman fund.

Mr Yeo's lawyer Philip Fong has said in court that other employees and ex-employees of BSI are in a similar position to explain some of the transactions under investigation, and that some of the charges against his client didn't pertain to the case on 1MDB.

A Malaysian parliamentary committee has identified at least US$4.2 billion of irregular transactions by 1MDB, and recommended the advisory board headed by Prime Minister Najib Razak be disbanded. Both 1MDB and Mr Najib have consistently denied wrongdoing.

BSI has seen several senior employees leave or who are in the process of departing, including three members of the bank committee that vetted major new clients at a time when money flowed in from 1MDB and related entities, according to people familiar with the matter.

EFG International AG, which is in the midst of taking over BSI, didn't immediately reply to an e-mail.

BLOOMBERG