Senior staff exit bank mired in 1MDB turmoil

Recent departures from BSI Bank Singapore have included the head of compliance and an executive in its wealth management unit, said people familiar with the matter. The exits come on top of the pending retirement of the bank's Asia CEO, and the depar
Recent departures from BSI Bank Singapore have included the head of compliance and an executive in its wealth management unit, said people familiar with the matter. The exits come on top of the pending retirement of the bank's Asia CEO, and the departure of a private banker linked to 1MDB.ST FILE PHOTO

Global investigations into a troubled Malaysian state investment fund have cast a deepening shadow over one of the fund's Swiss bankers, BSI.

Several senior employees have left BSI's Singapore office in recent months or are leaving, including the three members of the bank committee that vetted major new clients at the time when money flowed in from 1Malaysia Development Berhad (1MDB) and related entities, according to people familiar with matter. None of the three has been accused of wrongdoing.

Separately, BSI's parent company, Grupo BTG Pactual, said on Tuesday that it has asked the bank's previous owner, Assicurazioni Generali, to be indemnified for potential losses tied to BSI's dealings with the Malaysian fund.

The turmoil surrounding BSI comes as the authorities in Singapore, Luxembourg and Switzerland are trying to determine if some of the billions of dollars raised since 2009 by 1MDB were siphoned into the personal accounts of politically connected individuals.

The United States Justice Department has asked global banks to retain records about 1MDB-related funds they may have handled, people familiar with the probe have said. As more international banks field regulators' questions, Switzerland-based BSI and its Singapore arm have emerged as some of the most intertwined with 1MDB.

One of the bank's former employees was named in a Singapore court proceeding in connection to the investigations, with documents from that case showing that the bank handled accounts for 1MDB and several related parties.

Neither BSI nor its staff have been charged by the regulators in Singapore.

The bank has not been accused of wrongdoing and has said it will cooperate with the authorities.

It is also not clear whether the staff exits were related to the bank's dealings with 1MDB.

Recent departures from BSI Bank Singapore have included the unit's head of compliance and an executive in its wealth management unit, said the people familiar with the matter.

The chief operating officer for the bank's Asia operations, Mr Gary Tucker, has decided to leave BSI and return with his family to Europe, according to Mr Luciano Crobu, a Lugano-based spokesman for the bank.

Mr Tucker did not reply to e-mail messages seeking comment or return calls through BSI's main switchboard.

Those exits come on top of the previously reported pending retirement of the bank's Asia chief executive officer and the departure of a private banker who, according to court documents, was the primary relationship manager for 1MDB.

Mr Crobu declined to comment on staff matters beyond Mr Tucker's, saying the bank does not comment on staff movements, or potential or ongoing investigations on principle.

With BSI in the middle of a sale that would transfer it from Brazilian to Swiss ownership, questions have lingered about which of the bank's recent string of owners may be on the hook if regulators conclude that improprieties occurred.

BSI Singapore managed accounts for 1MDB and the fund's Brazen Sky subsidiary, according to Singapore court documents .

It also did business with Abu Dhabi's Aabar Investments PJSC, an entity with which 1MDB did business, as well as Malaysian financier Low Taek Jho, said the documents.

Those Singapore papers emerged when a one-time BSI private banker, Mr Yak Yew Chee, went to court in Singapore to attempt to access funds that had been frozen by the local authorities investigating fund flows related to 1MDB.

Mr Yak left the bank in February, according to a spokesman. He has not been charged and said in court documents that he has not done anything wrong.

BSI said last month that chief executive officer Hanspeter Brunner, 64, would retire in the coming weeks.

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A version of this article appeared in the print edition of The Straits Times on April 07, 2016, with the headline 'Senior staff exit bank mired in 1MDB turmoil'. Print Edition | Subscribe