Friday 29 Mar 2024
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KUALA LUMPUR: Singapore authorities will support the probe into troubled 1Malaysia Development Bhd (1MDB) by providing assistance within the full ambit of its laws, a business daily reported yesterday.

The Business Times, quoting a spokesman from the Monetary Authority of Singapore (MAS), said cooperation between authorities in Singapore and Malaysia may have already begun as the Singaporean authorities are already in contact with their Malaysian counterparts.

“The Singapore authorities are in touch with their Malaysian counterparts. We are committed to assist within the full ambit of our laws,” the spokesman was quoted as saying.

The spokesman, however, stopped short of revealing further details, saying it would be inappropriate to ongoing investigations in Malaysia.

The Business Times’ report stated that MAS has also been engaging with relevant financial institutions in Singapore and does not comment on its “supervisory dealings with specific financial institutions”.

The spokesman also reportedly said MAS was unable to comment on individual banking relationships due to “confidentiality considerations”.

“Financial institutions here are required to conduct rigorous customer due diligence, regular account reviews, and to monitor for and report any suspicious transactions,” the business daily’s report said.

Singapore’s financial regulator was responding to queries from the daily on whether the Malaysian authorities had approached MAS for assistance in the 1MDB probe.

This followed a revelation that a Singapore branch of a Swiss wealth manager, BSI Singapore, had custody of US$1.103 billion (RM4.059 billion) of 1MDB funds redeemed from investments parked in the Cayman Islands.

On Monday, Bank Negara Malaysia Governor Tan Sri Dr Zeti Akhtar Aziz was reported as saying that the central bank will “uphold areas under its purview and legislation that it operates in” with regards to the audit and investigation being carried out on 1MDB.

“As the central bank, we will uphold whatever that is under our purview under the legislation that we operate, and this is important. We are accountable for it,” she said in an exclusive interview with CNBC.

On March 9, Inspector-General of Police Tan Sri Khalid Abu Bakar had confirmed that the police are investigating the state-owned strategic investment company and had formed a task force comprising the Attorney-General’s Chambers, the Malaysian Anti-Corruption Commission and the police.

Prime Minister and Finance Minister Datuk Seri Najib Razak, who chairs 1MDB’s advisory board, had earlier called on Auditor-General (A-G) Tan Sri Ambrin Buang to audit the debt-laden entity.

The audit by the A-G’s Department will be passed to Parliament’s Public Accounts Committee (PAC) for further inspection.

1MDB has come under scrutiny over its financial management after racking up RM42 billion in debt since 2009, raising fears of a downgrade in the sovereign rating should it fail to repay its loans. On March 12, Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah formally acknowledged that 1MDB’s financial position was “unsustainable” with a “cash flow problem and a high net gearing of 17 times”.

The Finance Ministry had also confirmed that the Cabinet approved a RM950 million standing credit to 1MDB, which the opposition had deemed a bailout. Najib had later confirmed that the government had also issued a “letter of support” to IMDB Global Investments Ltd, a wholly-owned unit of 1MDB, to borrow US$3 billion to repay its debt.

The prime minister had said the letter of support meant that the government will repay the debt if 1MDB Global Investments fails to do so.

 

This article first appeared in The Edge Financial Daily, on March 25, 2015.

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