The Marina Bay Sands hotel and casino in Singapore. — Bloomberg
Singapore: In a Singapore courtroom last Friday, the last of those arrested for their involvement in the island nation’s biggest laundering case pleaded guilty, paving the way for the next steps in the S$3bil scandal.
The city-state must now decide what to do with a fortune in forfeited assets, from luxury properties to collectible ornamental bears and luxury handbags.
There’s also several hundred million dollars of local and foreign currencies in accounts at some of the world’s top wealth managers.
Credit Suisse – now owned by UBS Group AG, and Citigroup Inc held the largest amounts on deposit so far for the convicted, according to court filings reviewed by Bloomberg.
Others with significant exposure include the country’s three largest banks – DBS Group Holdings Ltd, Oversea-Chinese Banking Corp and United Overseas Bank Ltd.
For decades, Singapore has taken steps to attract the uber rich, spawning a finance industry that’s made it one of the wealthiest countries.
The surprise sting operation to take down the online gambling ring last year prompted a rethink, amid signs dirty money is joining legitimate businesses.
The China-born individuals and their close associates, together with companies they controlled, held more than S$370mil in total at over a dozen financial institutions, court records compiled by Bloomberg show.
That’s not all, however. Singapore’s top local banks as well as international lenders also made significant loans that were not reflected in the seized assets.
DBS for example, said previously it has about S$100mil of exposure to the scandal, mainly from financing properties.
Singapore’s police force meanwhile, has said that there are 17 other people under investigation whose assets have been seized or frozen, whose tally is not included in the documents.
Spokespeople for banks that held assets of the launderers – Standard Chartered Plc, DBS, UBS, RHB Bank Bhd, Julius Baer Group Ltd, Malayan Banking Bhd
, LGT Bank AG and CIMB Group Holdings Bhd declined to comment.
OCBC, which also owns Bank of Singapore, a private bank, said it had nothing further to add to past comments on the case. Citi said it’s committed to ensuring its staff are informed of emerging risks and potential issues related to money laundering to better inform clients. UOB said it remains vigilant to money laundering risks and continually ensures that its due diligence checks are robust.
HSBC Holdings Plc, Industrial and Commercial Bank of China Ltd and UOB-Kay Hian Holdings Ltd did not respond to requests for comment.
Also on authorities’ to-do list is how to handle the tens of properties confiscated from the money launderers.
These range from centuries-old shophouses and prime office space to bungalows on Sentosa, an island enclave that’s home to many of the country’s super-rich.
Making the task more complicated is a downturn in Singapore’s luxury property market due to hefty levies on foreign purchases and high interest rates.
Early attempts by banks to offload these assets have not always been successful. OCBC, for example, has made two attempts to auction a seized bungalow. The latest last month attracted no bids for an asking price of S$26.5mil.
While authorities have committed to auctioning the assets, they will have to time it right to avoid flooding the market. If they don’t sell immediately, it also costs money. Singapore has already incurred more than S$640,000 in expenses as of March to maintain the seized assets. — Bloomberg
