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Compliance Corner: MAS, Singapore

Editorial Staff, 26 October 2020

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The latest compliance news: regulatory developments, punishments, guidance, permissions and new product and service offerings.

Monetary Authority of Singapore, BSI
The Monetary Authority of Singapore has imposed a lifetime ban against a former wealth services head of BSI Bank Limited, Singapore branch, for channelling fees to a client linked to Malaysia’s scandal-warped 1MDB.

The prohibition order was imposed on Kevin Michael Swampillai.

From 2012 to 2013, Swampillai and his subordinate, Yeo Jiawei, helped 1MDB to restructure several of its joint venture interests. In the course of doing so, the men channelled a portion of the fund management fees to an entity beneficially owned by Swampillai, without BSIS’ knowledge or authorisation, MAS said in a statement last Friday. (The Singapore regulator banned Yeo for life from the sector on 18 December 2017, following his conviction for charges ranging from money laundering to cheating, for which he was sentenced to 84 months’ imprisonment.)

In total, Swampillai received about $5 million in secret profits at the expense of and without the knowledge of BSIS, the Singapore regulator said. 

Swampillai also deliberately made misrepresentations to 1MDB’s auditors, KPMG Malaysia, in a bid to sway the outcome of an audit carried out by them on 1MDB’s fiduciary fund investments. He misrepresented that the assets held by PetroSaudi Oil Services Limited, one of 1MDB’s investments, were liquid in nature and mostly cash, even though he knew that PSOSL’s assets comprised two drill ships.

MAS said Swampillai’s actions made it think that he "will not carry out regulated activities honestly."

"On account of the severity of his misconduct, MAS has prohibited him permanently from performing any regulated activity under the Securities and Futures Act and providing any financial advisory service under the Financial Advisers Act. He is also permanently prohibited from taking part in the management, acting as a director, or becoming a substantial shareholder of any capital market and financial advisory services firm under the SFA and FAA,” the regulator said.

MAS withdrew BSIS’ merchant bank licence on 24 May 2016 and also imposed financial penalties amounting to S$13.3 million ($9.09 million) for breaches of anti-money laundering and counter-terrorist financing rules.

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