KUALA LUMPUR (May 24): The Monetary Authority of Singapore (MAS) has issued BSI Bank Ltd a notice of intention to withdraw its status as a merchant bank in Singapore for "serious breaches of anti-money laundering requirements, poor management oversight of the bank’s operations, and gross misconduct by some of the bank’s staff."

In a statement today, MAS said it had also referred to the public prosecutor, six members of BSI's senior management and staff to evaluate whether they had committed crime.

MAS managing director Ravi Menon said in the statement: “BSI Bank is the worst case of control lapses and gross misconduct that we have seen in the Singapore financial sector. It is a stark reminder to all financial institutions to take their anti-money laundering responsibilities seriously. Controls need to be robust, surveillance vigilant, and the management culture must emphasise professional integrity and risk consciousness.”

“MAS is absolutely committed to safeguarding the integrity and reputation of Singapore’s financial centre. On this, there can be no compromise,” Menon said.

According to MAS' statement, the six members of BSI Bank’s senior management and staff who have been referred to the public prosecutor, include BSI former CEO Hans Peter Brunner, former deputy CEO Raj Sriram and wealth management services head Kevin Michael Swampillai.

The list includes former senior private bankers Yak Yew Chee and Yvonne Seah Yew Foong, and ex wealth planner Yeo Jiawei.

"Mr Swampillai is currently suspended by the bank. Mr Yeo is currently in remand and has been charged by the public prosecutor for various offences.

"MAS is working closely with the Swiss Financial Market Supervisory Authority (FINMA), the home regulator of BSI SA, to oversee an orderly closure of BSI Bank in Singapore," MAS said.

MAS' statement today came amid investigations on 1Malaysia Development Bhd (1MDB), which is wholly-owned by the Malaysian Government.

Bloomberg, quoting sources, reported last month that global investigations into troubled Malaysian state investment fund 1MDB had cast a deepening shadow over one of the fund’s Swiss bankers, BSI SA.

It was reported that several senior employees had left BSI’s Singapore office in recent months or were leaving, including the three members of the bank committee that vetted major new clients at a time when money flowed in from 1MDB and related entities.