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Report: UK authorities face calls to get tougher on 1MDB matter

Malaysiakini  |  Published:  |  Modified:

International watchdog Global Witness has been putting pressure on UK financial regulators to take tougher action in the 1MDB matter, according to the Financial Times.

Specifically, Global Witness wants the UK Financial Conduct Authority (FCA) to investigate the Royal Bank of Scotland
and Standard Chartered, both UK-based banks, for handling more than US$2 billion funds allegedly embezzled from 1MDB.

Both banks were fined by Swiss and Singaporean regulators in relation to the 1MDB matter while US authorities are still
investigating the entities.

“Just because foreign regulators have investigated it doesn’t let the FCA off the hook,” Global Witness senior campaigner on banks and corruption Murray Worthy was quoted as saying.

Worthy also authored a 26-page report on the 1MDB matter in which he noted there was "a clear failure" by the banks for ignoring "the rules, turned a blind eye, kept profitable clients and continued handling billions of dollars of dirty money despite clear warning signs".

According to Financial Times, UK regulators may decide not to investigate British institutions for wrongdoing if there were no British assets or clients involved.

"In these cases, it often relies on foreign regulators to take enforcement action and follows up with supervisory action to remedy failings where needed, said a person briefed on the matter," said the report.

Malaysiakini is unable to independently verify the Financial Times report.

Meanwhile, adding to Global Witness' voice was UK Labour MP and anti-corruption campaigner Margaret Hodge.

"It is time for the FCA to take firm action to hold banks that handle dirty money to account (and to) explain its apparent inaction over this case when other countries completed their investigations over a year ago," she was quoted as saying.

The US Department of Justice (DOJ) believed at least US$4.5 billion in funds was allegedly misappropriated from 1MDB and laundered through the US financial system to acquire various assets.

The DOJ has sought to seize around US$1.7 billion in assets allegedly acquired using the stolen money.

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