In a shocking revelation, some of Singapore’s prominent local and international banks have found themselves entangled in one of the city-state’s largest money laundering scandals. Among the financial institutions involved are DBS Group Holdings Ltd, the country’s largest bank, and Bank of Singapore Ltd., the private-banking arm of Oversea-Chinese Banking Corp. This case, involving over S$1 billion ($740 million) of illicit assets, sheds light on the vulnerabilities in Singapore’s financial system and raises concerns about the flow of illegal funds into one of the world’s most crucial financial hubs.
The Extent of Involvement:
According to business filings seen by Bloomberg News, DBS and Bank of Singapore are creditors to investment firms associated with individuals recently arrested and charged in connection with the money laundering case. These two banks join a growing list of financial institutions, including CIMB Bank Bhd, Citigroup Inc.’s local subsidiary, and Deutsche Bank AG, that have been linked to suspects within this alleged money laundering ring. Additionally, real estate agents, precious metals dealers, and even golf clubs in Singapore have also become entwined in this scandal, underscoring the urgent need for stronger measures against such illicit money activities.
Previous Scandals and Regulatory Responses:
This latest case follows earlier high-profile scandals involving massive money flows from Malaysia’s state fund 1MDB and German firm Wirecard AG, which resulted in severe consequences for those involved. These incidents have led to individuals being banned from the financial sector, imprisonment, and hefty fines imposed on banks due to inadequate controls. In response, lawmakers in Singapore passed a bill in May, enabling banks to share information about potentially risky clients. Despite these measures, the recent money laundering case indicates the need for further improvements in Singapore’s financial transparency and due diligence practices.
Bank Involvement and Legal Proceedings:
In the filings, DBS registered several charges on August 18, 2021, related to Aiqinhai Investment Pte, an investment firm whose director and sole shareholder, Su Haijin, is among the individuals indicted for offenses including money laundering and forgery. Similarly, Bank of Singapore registered a charge on January 7, 2022, for Xinbao Investment Holdings Pte, an investment firm affiliated with indicted director Su Baolin. While DBS expressed its commitment to combat money laundering, including making Singapore an inhospitable place for criminals, OCBC refrained from commenting. Standard Chartered, alleged to be deceived by Su Baolin, has yet to respond to inquiries.
Legal Proceedings and Future Action:
The two implicated directors, Su Haijin and Su Baolin, are currently in remand. Their legal representatives have either declined to comment or not yet responded to requests seeking clarification. Both investment firms associated with DBS and Bank of Singapore are located in Singapore’s business district, while the accused directors reside in upscale residential areas. The banks’ facilities are secured against the companies’ “all monies,” as specified in the filings. Prosecutors have indicated their intention to obtain documents from at least ten financial institutions, although they have refrained from naming them explicitly.
Regulatory Response and Commitments:
When approached for comment, the Monetary Authority of Singapore referred to a previous statement, underscoring its commitment to conduct supervisory engagements with financial entities facing potential exposure to tainted funds. The regulatory body also emphasized its readiness to take firm action against those found to have violated anti-money laundering and related regulations. The local police have yet to respond to inquiries seeking clarification.
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