Luxembourg launches money laundering inquiry into Malaysian state fund

BRUSSELS/KUALA LUMPUR: Luxembourg’s state prosecutor
launched a judicial inquiry into allegations of money laundering,
covering payments totalling hundreds of millions of dollars, against
Malaysia’s sovereign wealth fund 1Malaysia Development Bhd (1MDB).

The
prosecutor said the inquiry followed evidence that funds held by the
Malaysian government in offshore accounts in Singapore, Switzerland and
Luxembourg had been misused.

“The investigation aims to trace the
origin of four transfers in 2012 and one in at the start of 2013 for a
total of several hundreds of millions of dollars,” the statement said.

The allegations concerned in particular the sums paid upon the issuance of two bonds in May and October 2012.

1MDB,
whose advisory board is chaired by Malaysian Prime Minister Najib
Razak, has been the subject of multiple investigations over the last
year by authorities in Malaysia, Switzerland, Singapore and the United
States following accusations of financial mismanagement and graft.

In
a statement issued late on Thursday, 1MDB said it has not been
contacted by any foreign legal authorities on matters related to the
company. 

“However, we remain committed to fully cooperating with
any lawful authority and investigation, subject to advice from the
relevant domestic lawful authorities, and in accordance with
international protocols governing such matters,” it said. 

Switzerland’s
chief prosecutor said in January that a criminal investigation into
1MDB had showed about US$4 billion (£2.7 billion) appeared to have been
misappropriated from Malaysian state companies.

SINGAPORE REVIEWING VARIOUS TRANSACTIONS, FUND FLOWS: MAS
Australian
broadsheet The Australian on Wednesday stated that the Monetary
Authority of Singapore (MAS) has asked “close to 40 banks with a
presence in the city-state to provide information about money flows from
entities linked to 1MDB”. 

The report alleged that MAS had
scrutinised transfers of “as little as A$50,000 (US$38,481)”, and added
that the queries in this case are believed to “fall short of a more
serious formal direction compelling them to provide information”.

In
response to media queries, MAS said it has been conducting a “thorough
review of various transactions as well as fund flows” through its
banking system as part of investigations into “possible money-laundering
and other offences in Singapore”. 
It added that it is working
closely with and seeking clarifications from authorities in other
financial centres “given the cross-border nature of these fund flows”. 

“MAS
has requested a number of financial institutions to furnish information
relating to the review,” its spokesperson said on Thursday. 

“Besides
any enforcement actions by the relevant authorities in Singapore for
possible violations of our laws, MAS will not hesitate to take
regulatory actions against financial institutions should they be found
to have breached our banking rules,” its spokesperson added. 

In February, Singapore’s Commercial Affairs Department as well as MAS had seized a “large number” of bank accounts in relation to a probe into 1MDB.

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