SINGAPORE: The Monetary Authority of Singapore (MAS) has issued lifetime prohibitions orders against a former banker for his role in the 1MDB scandal that saw him receive US$5 million (S$6.8 million) in “secret profits”, said the authority early on Friday morning (Oct 23).
Mr Kevin Michael Swampillai, a former representative and head of the Wealth Management Services Department of BSI Bank Limited, Singapore branch (BSIS), was issued the bans at the conclusion of an investigation by the authority.
They came into effect on Thursday.
From 2012 to 2013, Mr Swampillai and his then subordinate Yeo Jiawei, helped the Malaysian state-owned strategic development company 1Malaysia Development Berhad (1MDB) to “restructure several of its joint venture interests”.
In the course of assisting 1MDB, Mr Swampillai and Yeo channelled a portion of the fund management fees to an entity beneficially owned by Mr Swampillai. This was done without BSIS’ knowledge and authorisation.
“In total, Mr Swampillai received about US$5 million in secret profits at the expense of and without the knowledge of BSIS,” said MAS.
The former BSI head also “deliberately” made misrepresentations to 1MDB’s auditors KPMG Malaysia, in an attempt to “improperly influence” the outcome of an audit that was carried out on 1MDB’s fiduciary fund investments.
MAS said Mr Swampillai misrepresented that the assets held by one of 1MDB’s investments, PetroSaudi Oil Services, were liquid in nature and mostly cash, “even though he knew that PetroSaudi Oil Services’ assets comprised two drill ships”.
“Mr Swampillai’s actions have given MAS reason to believe that he will not carry out regulated activities honestly,” the authority said.
He has been banned permanently from performing any regulated activity under the Securities and Futures Act and from providing any financial advisory service under the Financial Advisers Act.
He is also banned 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 both Acts.
MAS withdrew BSIS’ merchant bank licence in May 2016 and also imposed financial penalties of S$13.3 million for breaching a MAS notice that prevents money laundering and countering the financing of terrorism.
In Jul 2017, Yeo was sentenced to four-and-a-half years' jail for money laundering and cheating.
He had set up multiple suspicious transactions involving 1MDB and admitted he secretly profited at least US$3.5 million from the illicit transactions. He laundered a portion of the money by transferring at least US$500,000 into his parents' bank account.
The former wealth planner had already been serving a 30-month sentence on charges of perverting the course of justice by tampering with key witnesses in order to frustrate the Commercial Affairs Department’s (CAD) investigation into his involvement.
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