Obvious red flags but bank never lodged suspicious transaction report - witness
17 Apr 2023 07:57pm
Kevin Michael Swampillai - Bernama Pix
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Kevin Micheal Swampillai, 59, who worked with BSI Bank Singapore from 2010 to 2016 said any bank has a duty and is legally bound to file the STR with law enforcement once any red flag is spotted to alarm the authorities.
"Obvious red flags here means that these were politically exposed person (PEP) type of accounts. In this case, the Government of Malaysia’s entity (1MDB) is opening accounts with a relatively small and private bank, where typically the accounts’ signatory would be a single individual.
"The transactions (in the bank) were approved by that single signatory without board minutes and the use of obscure fiduciary funds structures. All of these are examples of massive red flags. I would imagine a bigger bank had stepped in and stopped these transactions.”
He said this during cross-examination by Datuk Seri Najib Tun Razak’s counsel, Tan Sri Muhammad Shafee Abdullah at Najib’s trial involving the misappropriation of RM2.3 billion from 1MDB funds.
The 44th prosecution witness also agreed to Muhammad Shafee’s suggestion that the STR in relation to 1MDB transactions was not filed to balance the commercial interest of the bank.
Muhammad Shafee: Can you tell us what will happen if STR was lodged?
Kevin: The fact that the bank would file an STR regarding one of its clients, typically it would be a prelude to an account closure. It is an indication that it (the bank) already made a decision to terminate the relationship with that client.
Kevin added that filing an STR also means that the bank is prepared to go legal and ready to cooperate with the authorities in terms of providing information as well as transactions that were undertaken through a specific client’s account.
"There were severe penalties for the bank for not hearing these provisions as what happens in the case of BSI Bank in terms of its license being pulled and terminated,” he said.
Further questioned by Muhammad Shafee, Kevin said BSI Bank made around US$250 million in fees from 1MDB and its related companies as they were the single largest client in terms of transaction volume and revenue.
Meanwhile, Kevin also recalled the one time he had been on a teleconference call together with Najib and BSI’s then-relationship manager Yak Yew Chee where the former premier was asking about the valuation of a Bridge Global Absolute Return Fund investments.
"He (Najib) ended the call by asking for documentation that would attest to the value of the fund. My impression was that he was concerned and this was communicated to Yak. The nature of the concerns I was not privy to, but it was on the value of the fund where 1MDB monies ended up,” he said.
The trial before Justice Datuk Collin Lawrence Sequerah continues tomorrow.
Najib, 70, is facing four charges of using his position to obtain bribes totalling RM2.3 billion from 1MDB funds and 21 charges of money laundering involving the same amount. - BERNAMA
