There is no evidence showing Labuan International Business and Financial Centre (Labuan IBFC) as a hub for receiving illegal deposits in the Asian region, the Dewan Rakyat was informed today.

Deputy Finance Minister Awang Adek Hussein said Labuan IBFC had a

comprehensive legal structure that prevented such incidents.

"Labuan IBFC is also the sole international financial centre that prohibits the use of cash in business transactions by any financial institutions to prevent the use and clearing of illegal currencies in the institutions," he said in his reply to a question from Jeff Ooi Chuan Aun (DAP-Jelutong) at the Dewan Rakyat sitting today.

Ooi wanted to know if the centre had now become a regional centre for unauthorised funds and deposits colection which is an offence under the Labuan Financial Service and Securities Act (LFFSA) 2010.

He also wanted to know the action taken against Saradunia Investments (L) Ltd, Saradunia Capital Sdn Bhd, Royal Pacific Investment (Labuan) Ltd, Asia Bancorp (L) Ltd, Asia Bancorp Bhd, Nur Cahaya Ilham Consultant and Matrik Unggul Sdn Bhd which were investigated by the Labuan Financial Services Authority.

Hope in security walls

Awang Adek said initial investigations into the six companies have found elements of fraud and criminal breach of trust.

He added that since the companies were still under the investigation of Labuan FSA, Bank Negara and the police, further information could not be disclosed as it could hamper investigations.

Awang Adek also said Labuan FSA's scope of power was wide and comprehensive, enabling it to counter any attempts to carry out illegal activities in Labuan IBFC.

However, Labuan FSA will not be able to stop the flow of illegal money if it is done through the banking and financial systems of other countries including the UK, Singapore and the US, he said.

"We hope the world financial systems especially those in the developed countries have the security walls to filter illegal monies."

- Bernama