The former BSI wealth planner who faces allegations of facilitating illicit transactions involving scandal- hit state fund 1Malaysia Development Berhad was granted bail of $600,000 yesterday.
But Yeo Jiawei, who has been in remand for 41 days, must remain in custody as the prosecution said it will challenge the bail order in the High Court.
District Judge Christopher Goh ordered a stay of the bail order pending that hearing.
In addition, Yeo was ordered to not approach or speak to any of the prosecution witnesses directly or indirectly, and to report to the investigation officer when required. His passport will remain with the Commercial Affairs Department (CAD).
Second Solicitor-General Kwek Mean Luck told the court yesterday that bail should be denied, given Yeo's "deplorable conduct in tampering with witnesses".
Mr Kwek said the risk of Yeo obstructing justice is deemed "so high" that the prosecution is prepared to work around the clock to expedite the matter for early trial of some of the nine charges against Yeo in two weeks.
"Given the extensiveness, intensity and deceptiveness with which he went about interfering with the administration of justice, there is an immediate and palpable risk to the public interest if he is released from custody.
"This is a risk that cannot be mitigated by bail conditions, especially when (Yeo) already breached earlier police bail conditions and demonstrated a willingness to take active steps to mask the hiding of evidence," Mr Kwek said.
Yeo was arrested on March 17 for alleged violations of securities laws and released on bail the next day.
But the prosecution alleged on Tuesday that he violated bail conditions on March 27 when he met Mr Kevin Swampillai, BSI's head of wealth management services, and Mr Samuel Goh, and told them "the time had come to 'collaborate' stories to provide a 'consistent response' to CAD if questioned" on funds that went to Bridgerock Investment, a firm Yeo controlled.
Mr Kwek noted that Yeo had contacted at least five different witnesses on five occasions between February and April.
"Moreover, the evidence of Yeo contacting witnesses comes not from one source or one person... (but) from multiple sources, Swampillai, Goh, Kelvin Ang, Yak Yew Chee, and another witness who informed CAD that he was told to destroy evidence," Mr Kwek said. "Each piece of independent evidence further reinforces the fact that Yeo was actively intervening with witnesses."
Ang, the second person charged with corrupt transactions in this case, was released from remand this month on bail of $100,000.
Yeo's lawyer, Senior Counsel Harry Elias, had suggested that bail of between $200,000 and $400,000 be set.
He also asked for "unhindered, free access" to Yeo and "an atmosphere where I can work with (Yeo) properly".
Mr Elias added: "The way we have seen our client in the last 40 days is appalling."
In granting bail, Judge Goh noted that "even if there had been a breach or there may be an anticipated breach of a bail condition, as (Yeo) has already been remanded for 41 days, the court has to ensure that a proper balance is to be struck in order to balance the interest of (Yeo) and that of society".
He said: "The deprivation of a person's liberty prior to his determination of guilt should never be taken lightly. All considered, I determine that, at this present juncture, I see no reason to deny (Yeo) bail."