Sat. Nov 28th, 2020

Regulation HK

Financial Regulator

MAS Bans Former BSI Banker Over 1MDB ‘Secret Profits’

2 min read

The former banker received about $5mn in fund management fees in an entity he beneficially owned, at the expense of and without the knowledge of BSI Bank.

MAS (Monetary Authority of Singapore) has issued lifetime prohibition orders against the former head of wealth management services at the Singapore branch of BSI Bank.

BSI Bank’s merchant bank licence was withdrawn by MAS in May 2016 and financial penalties amounting to SGD 13.3 million were imposed against the bank for breaches of Notice 1014 on AML/CFT.

From 2012 to 2013, BSI Bank’s Kevin Michael Swampillai and his then subordinate, Yeo Jiawei, had assisted 1MDB in restructuring several of its joint venture interests.

In the course of doing so, Swampillai and Yeo channelled a portion of the fund management fees to an entity beneficially owned by Swampillai, without BSI Bank’s knowledge and authorisation. In total, Swampillai received about USD 5 million in secret profits at the expense of and without the knowledge of the bank, MAS said.

Swampillai is also said to have deliberately made misrepresentations to 1MDB’s auditors at KPMG Malaysia in an attempt to improperly influence the outcome of an audit of 1MDB’s fiduciary fund investments.

In addition, Swampillai misrepresented that the assets held by PetroSaudi Oil Services Limited, one of 1MDB’s investments, were liquid in nature and mostly cash, though he knew that the company’s assets comprised two drill ships.

“Swampillai’s actions have given MAS reason to believe that he will not carry out regulated activities honestly,” the regulator said, imposing a permanently ban prohibiting him from performing any regulated activity under the Securities and Futures Act and providing any financial advisory service under the Financial Advisers Act.

Swampillai is also permanently prohibited from taking part in the management, acting as a director, or becoming a substantial shareholder of any capital market and financial advisory services firm under the SFA and FAA.

A lifetime prohibition order was also issued to Yeo Jiawei in December 2017, following his conviction for charges ranging from money laundering to cheating Yeo was sentenced to 84 months’ imprisonment.

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