1MDB SCANDAL

US seeks three banks' records on 1MDB

JPMorgan Chase is one of the banks asked by US authorities to retain and turn over records that may be related to improper transfers from Malaysia's 1MDB.
JPMorgan Chase is one of the banks asked by US authorities to retain and turn over records that may be related to improper transfers from Malaysia's 1MDB. PHOTO: REUTERS

JPMorgan Chase, Deutsche Bank, Wells Fargo asked to keep, hand over relevant papers

KUALA LUMPUR • JPMorgan Chase, Deutsche Bank and Wells Fargo have been asked by the United States authorities to retain and turn over records that may be related to improper transfers from an embattled Malaysian state fund, said people familiar with the matter.

The banks are not targets of the investigation and have not been accused by authorities of wrongdoing. As some of the biggest conduits of the global financial system, they join other institutions that have said they are working with US officials examining money flows connected with 1Malaysia Development Bhd (1MDB).

Goldman Sachs Group, which underwrote US$6.5 billion (S$8.8 billion) in bond deals for 1MDB, is cooperating with Justice Department efforts to gather information, people familiar with the matter have said, adding there was no indication that Goldman engaged in any wrongdoing. The bank declined to comment.

BSI, a Swiss private bank whose Singapore unit handled accounts for 1MDB and related entities, has also said it is cooperating with international regulators.

BSI chief executive officer Stefano Coduri told investors on Thursday that in the context of issues surrounding 1MDB, the bank had exited its Malaysia business. He declined to comment further, saying "there are official investigations".

One bank received an instruction from the Justice Department not to destroy related documents dating back to 2009, the year 1MDB was created, according to a person familiar with the matter.

JPMorgan, Deutsche and Wells Fargo facilitated transfers for 1MDB and related entities, according to the people familiar with the matter. Representatives for the banks declined to comment.

One bank received an instruction from the Justice Department not to destroy related documents dating back to 2009, the year 1MDB was created, according to a person familiar with the matter, who asked not to be identified because the information is confidential.

Authorities from around the world - including in the US, Luxembourg, Switzerland and Singapore - are trying to piece together evidence to determine if some of the billions of dollars that 1MDB raised since 2009 were siphoned out of its coffers and into the personal accounts of politically connected individuals.

The fund, under the direction of Malaysian Prime Minister Najib Razak, has been criticised by his political opponents for ballooning debt levels, a near-miss on a loan payment and accusations of financial mismanagement, prompting former premier and political rival Mahathir Mohamad to call for his resignation. Both 1MDB and Datuk Seri Najib have denied wrongdoing.

1MDB has denied transferring funds to Mr Najib's accounts.

Some accounts for 1MDB and related entities were handled by BSI's Singapore unit, according to documents entered into a Singapore court as part of efforts by a former BSI private banker to access funds frozen by the city-state's central bank.

On Thursday, the Monetary Authority of Singapore (MAS) said that as part of its investigations into 1MDB-related fund flows, it has been conducting a "thorough review of various transactions" through the country's banking system. Singapore is working closely with authorities in other financial centres, MAS added.

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A version of this article appeared in the print edition of The Straits Times on April 02, 2016, with the headline 'US seeks three banks' records on 1MDB'. Print Edition | Subscribe