Most Read
Most Commented
Read more like this
story images
story images
mk-logo
News
Swiss regulator fines bank which handled Jho Low's Good Star account
Published:  Feb 2, 2017 8:10 PM
Updated: 3:37 PM

The Swiss Financial Market Supervisory Authority (Finma) has ordered Coutts & Co Ltd, which is owned by the Royal Bank of Scotland, to surrender 6.5 million francs (RM29.1 million) in illegal profits from transactions linked to 1MDB.

Finma, in a statement today, said Coutts seriously breached money-laundering regulations by failing to carry out adequate background checks into business relationships and transactions associated with 1MDB.

The Swiss regulator added that it was also considering enforcement proceedings against bank employees responsible for the transactions.

"The bank failed to adequately clarify the circumstances surrounding a number of business relationships and unusually large, high-risk transactions.

"In addition, it did not follow up on relevant internal information and, despite the existence of substantive evidence, failed to report any suspicions to the Swiss authorities until the spring of 2015.

"Given the inadequacy of the bank’s anti-money laundering controls in this particular case, Coutts was in serious breach of its duty to ensure proper business conduct," it said.

It noted that among the offending transactions was a US$700 million transfer from 1MDB to an account opened by a "young Malaysian businessman" in the autumn of 2009.

The transaction was detailed by the US Department of Justice in its 136-page filing which said the US$700 million was transferred to Good Star Limited, a company beneficially owned by Penang billionaire Jho Low, at Coutts.

The US filing, aimed at seizing assets acquired using allegedly stolen 1MDB funds, said the US$700 million was intended for a joint-venture between 1MDB and PetroSaudi but was diverted to the billionaire.

Unlocking Article
Unlocking Article
View Comments
ADS