KUALA LUMPUR: A former Singaporean banker told the High Court that there were obvious red flags in relation to 1Malaysia Development Berhad (1MDB) transactions in BSI Bank, but the bank never filed any suspicious transaction reports (STR) to the Monetary Authority of Singapore (MAS).
Kevin Micheal Swampillai, 59, who worked with BSI Bank Singapore from 2010 to 2016, said any bank has a duty and is legally bound to file the STR with law enforcement once any red flags are spotted to alarm the authorities.
“Obvious red flags here mean that these were politically exposed person (PEP) type of accounts. In this case, the Government of Malaysia’s entity (1MDB) is opening accounts with a relatively small and private bank, where typically the accounts’ signatory would be a single individual.
“The transactions (in the bank) were approved by that single signatory without board minutes or the use of obscure fiduciary fund structures. All of these are examples of massive red flags. I would imagine a bigger bank had stepped in and stopped these transactions.”
He said this during cross-examination by Datuk Seri Najib Razak’s counsel, Tan Sri Muhammad Shafee Abdullah, at Najib’s trial involving the misappropriation of RM2.3bil from 1MDB funds.
The 44th prosecution witness also agreed to Muhammad Shafee’s suggestion that the STR in relation to 1MDB transactions was not filed to balance the commercial interests of the bank.
Muhammad Shafee: Can you tell us what will happen if an STR is lodged?
Kevin: The fact that the bank would file an STR regarding one of its clients, typically, would be a prelude to an account closure. It is an indication that it (the bank) has already made a decision to terminate the relationship with that client.
Kevin added that filing an STR also means that the bank is prepared to go legal and is ready to cooperate with the authorities in terms of providing information as well as transactions that were undertaken through a specific client’s account.
“There were severe penalties for the bank for not hearing these provisions, as what happens in the case of BSI Bank in terms of its licence being pulled and terminated,” he said.
Further questioned by Muhammad Shafee, Kevin said BSI Bank made around US$250mil (RM1.1bil) in fees from 1MDB and its related companies as they were the single largest client in terms of transaction volume and revenue.
Meanwhile, Kevin also recalled the one time he had been on a teleconference call with Najib and BSI’s then-relationship manager, Yak Yew Chee, where the former premier was asking about the valuation of a Bridge Global Absolute Return Fund investment.
“He (Najib) ended the call by asking for documentation that would attest to the value of the fund. My impression was that he was concerned, and this was communicated to Yak. The nature of the concerns I was not privy to, but they were on the value of the fund where 1MDB monies ended up,” he said.
The trial before Justice Datuk Collin Lawrence Sequerah continues today. — Bernama
