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Banker to Jho Low, 1MDB units seeks to unfreeze US$10m in S'pore
AS the multiple probes into Malaysia's troubled 1Malaysia Development Berhad appear to switch into high gear, particularly abroad, the first legal case linked to the high-profile scandal is set to take place right here in Singapore.
In a move that may lift the veil on what has mostly been a confidential probe by the Singapore authorities into possible money laundering offences, a senior private banker at BSI Singapore has filed a criminal motion in the High Court seeking the release of his frozen bank accounts that hold some S$10 million.
The Business Times understands that the accounts of Yak Yew Chee, the banking executive who is the relationship manager of Malaysian tycoon Low Taek Jho or better known as Jho Low and several key entities linked to 1MDB, were frozen last September amid the probe by the Monetary Authority of Singapore (MAS) and the Commercial Affairs Department (CAD). The 1MDB entities that Mr Yak had serviced as clients, sources said, include 1MDB Global Investments Ltd, Aabar Investment PJS Limited and SRC International Sdn Bhd.
SRC, a firm once wholly-owned by 1MDB but now under the Ministry of Finance, had transferred funds totalling over RM40 million to Malaysian Prime Minister Najib Razak's bank accounts. Last week, the country's Attorney-General had cleared the leader of any criminal wrongdoing in the matter.
Sources say that Mr Yak is seeking to release some of his bank accounts to pay taxes, legal fees and basic expenses.
According to the Supreme Court schedule for the week, the criminal motion will be heard on Friday morning. The respondent in the hearing is the public prosecutor. Mr Yak, who was understood to be on long leave last year, will be represented by senior counsel Roderick Martin of Martin & Partners.
"This is an extraordinary step," said a lawyer. "In most cases, generally speaking, the person would want to get his or her money back but very few actually go to court and would choose instead to wait for the process to be completed."
That Mr Yak is believed to be the private banker for 34-year-old Mr Low as well as 1MDB-linked entities also brings to light for the first time an indication of a possible connection between the Penang-born tycoon and the scandal-torn state-owned company.
BSI Singapore, the local branch of the Swiss private bank which is owned by Brazilian investment bank BTG Pactual, is where 1MDB had said early last year that its wholly-owned Brazen Sky was keeping US$1.103 billion cash that was part of the US$2.3 billion redeemed from its controversial investments in Cayman Islands funds. 1MDB later clarified that the US$1.103 billion was in "units", confounding observers.
In the past, Mr Low has consistently denied any involvement in 1MDB except for providing early advice during its inception in 2009. Last December, the Malaysian Anti-Corruption Commission said that its officers had travelled overseas to record statements from Mr Low and directors of SRC International in a seven-month probe into the transfer of huge amounts of funds into Mr Najib's accounts.
The report was handed over to Attorney-General Mohamed Apandi Ali, who last week cleared Mr Najib of US$681 million graft allegations and shut down MACC's probe without elaborating on his decision, sparking public obloquy. It also raised deep concerns over the standard of governance in the country's top institutions.
Days later, the Swiss Attorney-General's Office issued a statement that its criminal investigation involving the 1MDB money trail had unearthed "serious indications" of misappropriation involving a whopping US$4 billion.
This was followed by a joint statement by CAD and MAS on Monday that they have been "actively investigating" possible money laundering and other offences carried out in Singapore involving 1MDB.
They also revealed that they had seized a "large number" of bank accounts and were continuing to seek information from several financial institutions while interviewing various individuals and were cooperating closely with relevant authorities in Malaysia, Switzerland and the United States.
The events over the past week led prominent Malaysian banker Nazir Razak, Mr Najib's brother, to liken the unfolding of the protracted 1MDB saga to the popular HBO series Game of Thrones in an Instagram post, where he said that the future "terrifies" him as he can't see "how our institutions can recover" and the "political atmosphere can become less toxic".
Indeed, the toxicity of the controversy has rubbed off on the country's currency which fell 1.5 per cent to 4.2157 against the US dollar on Tuesday.
"It appears that the dust is being kicked up on 1MDB all over again," said Vishnu Varathan, a Singapore-based economist at Mizuho Bank Ltd in a Bloomberg report. "Downside pressures for the ringgit could re-emerge."