Malaysia scandal snares Australian banks
The Australian March 31, 2016 12:00am
Ben Butler
Two of Australia’s biggest banks, ANZ and NAB, have been drawn into a Singaporean money laundering investigation into the 1MDB scandal, in which the Prime Minister of neighbouring Malaysia, Najib Razak, has been accused of stealing $US1bn from the country’s sovereign wealth fund.
ANZ already has a starring role in the 1MDB saga, which has sparked investigations in three countries and has been linked to three murders, thanks to its quarter stake in Malaysian bank AmBank, where Mr Najib held an account swelled by allegedly unexplained wealth.
The Prime Minister’s office said yesterday there had been “exhaustive investigations” into $US680 mil¬lion transferred into his account from Singapore and the British Virgin Islands just before¬ the country’s elections in 2013, and “the funds were a donatio¬n from the royal family of Saudi Arabia”.
It is believed that the Monetary Authority of Singapore has asked close to 40 banks with a presence in the city-state to provide information about money flows from entities linked to 1MDB. Flows into accounts at ANZ and NAB are believed to be among those queried but it is not known whether the MAS questioned the Australian banks or the banks providing the funds.
Transfers of as little as $50,000 are believed to be under scrutiny by the MAS, which is investigating whether the haul was split into small bundles in a bid to escape notice. ANZ and NAB decline¬d to comment.
Each bank queried in the probe has been asked to explain why specific accounts were set up, why transactions occurred, where the money went, what intern¬al processes it had in place to catch suspicious flows and why those processes did not work in this instance.
The MAS regularly asks banks about transactions and it is believed the queries in this case fall short of a more serious formal direction compelling them to provide information.
It is not clear how much money in total the MAS has under scrutiny, but in March last year the Singapore Police told Malaysia’s central bank, Bank Negara Malaysia, that $US529m had flowed through accounts held at Swiss bank BSI’s Singaporean branch by financier and Najib assoc-iate Jho Low.
Last month, the MAS and Singapore Police’s Commercial Affairs Department confirmed they had “seized a large number of bank accounts” allegedly involve¬d in laundering money defrauded from 1MDB.