Singapore’s financial regulator will conduct an on-site inspection of Credit Suisse Group AG after at least one of its customers was charged for money laundering in a scandal that has rocked the city-state.
The local unit of Credit Suisse will be among banks the Monetary Authority of Singapore plans to examine to determine whether they properly handled the monitoring of wealthy clients, according to people familiar with the matter. Officials from the regulator are set to interview personnel and review documents within weeks, the people said, asking not to be identified as the information isn’t public.
The planned inspection underscores the seriousness of the scandal that has ensnared at least 10 domestic and international banks in the Asian financial hub. More than $2.8 billion of assets from cash to jewellery have been seized from a group of alleged money launderers with Chinese origin.
The MAS’s upcoming visit would be outside its regular engagements with banks, and signals potential issues with the lenders’ sizable exposure to the suspects and overall handling of client vetting, the people said. Credit Suisse is among the banks that have relationships with either the accused, or their companies. One of the suspects, Vang Shuiming, held $92 million at the Swiss lender, the biggest known account so far in the case.
Credit Suisse declined to comment. An MAS spokesperson referred Bloomberg News to comments made in parliament this month by Minister of State Alvin Tan, who said the regulator is conducting supervisory reviews and inspections of the banks with “a major nexus” to the case. Tan also said it was concerning that financial assets made up the vast bulk of what was seized so far.
For Credit Suisse, the review is but one of many headaches its new parent UBS Group AG will have to deal with as it focuses on integrating thousands of employees from its former rival across the world. The MAS did a similar inspection on Credit Suisse in 2017 for its role in the 1MDB saga, Malaysia’s biggest corruption case, and consequently the bank was fined $700,000. The amount was the smallest penalty the regulator imposed on banks in Singapore at the time.
See also: Singapore seizures rise to $3 bil in money laundering case
With 1MDB, MAS’ actions in the aftermath of the scandal also included banning financiers over breaches and shuttering the local units of two Swiss banks.
Besides Credit Suisse, Vang also had bank accounts with others including Bank Julius Baer where he had $33 million as well as United Overseas Bank U11 Ltd. and RHB Bank Bhd.’s local unit, according to police affidavits. Vang’s other charges include forgery of a bank document to trick Citibank Singapore Ltd.
Another suspect, Wang Dehai, stashed millions at UBS, Industrial & Commercial Bank of China Ltd and Bank of China Ltd. in Hong Kong, according to a police affidavit seen by Bloomberg News after a court hearing Wednesday. Wang has been wanted in China for alleged illegal online gambling activities since 2017, according to the document, which referred to UBS as Union Bank of Switzerland.
See also: Singapore director of 980 firms jailed for fraud neglect
It is not clear which other banks will be subject to the MAS inspection, which could look into what red flags were raised internally and when so-called suspicious transaction reports were filed, the people added.
After the case erupted in August, banks in the city-state have further stepped up existing scrutiny on clients especially those of Chinese origins with multiple passports, Bloomberg reported last month. The authorities are also looking into how one or more of the accused may have been linked to single family offices with incentives, and will tighten the rules where necessary.
Investigations of the money-laundering ring date back to 2021 after banks and companies filed suspicious transaction reports, communications minister Josephine Teo told parliament. The MAS earlier said these reports had alerted authorities to suspicious activities attempted through the country’s financial system.
