Singapore's financial regulator has pledged tough action if banks here linked to Malaysia's scandal-hit state investment firm 1Malaysia Development Berhad (1MDB) breached its rules seriously. The Singapore police also confirmed yesterday that they issued orders on July 15 to freeze two bank accounts as part of "an investigation into possible money-laundering offences".
The Monetary Authority of Singapore (MAS) reiterated that it is in close contact with the relevant financial institutions related to the 1MDB probe.
One of them, Falcon Bank, has said it is in contact with MAS and is cooperating with the authorities.
MAS managing director Ravi Menon said its main interest is in the supervision of the banks which may have been "a party to these flows".
The Wall Street Journal reported on July 3 that investigators of 1MDB had traced close to US$700 million (S$960 million) of deposits moving through Falcon Bank in Singapore into the personal account of Malaysian Prime Minister Najib Razak in Malaysia.
"Our main concern is (whether) they have adhered to the high standards that we expect of them in anti- money laundering and countering terrorism financing. Our focus is on whether they've exercised sufficient diligence and prudence with respect to these flows," Mr Menon said at a news conference on MAS' annual report on Tuesday.
MAS' actions include the issue of reprimands and warnings, imposing restrictions on business operations as well as financial penalties.
MAS is looking into whether the banks have followed rules on customer identification, verification of the sources of funds, accounts monitoring and the reporting of any suspicious transactions.
"We've been looking back to see if they have done all of these," Mr Menon said. "If they've been found wanting, we will take quiet actions against them and these are not small actions. If the breach is a serious one, the action taken will be a serious one."
This week, Malaysian police also arrested two men linked to 1MDB and slapped a travel ban on opposition lawmaker Tony Pua, in moves seen as a clampdown on key players in the saga.
The latest move by the Singapore police is the first time accounts outside Malaysia have been frozen in the probe into 1MDB.
Earlier this month, a special Malaysian task force set up to probe the 1MDB money transfers froze six bank accounts in Malaysia.
The Singapore police did not disclose further details of the bank accounts yesterday, adding that it is inappropriate to comment further as investigations are ongoing.
"We understand that the Malaysian authorities have launched investigations into certain matters related to 1MDB. Singapore will continue to provide our full assistance and share information with the relevant authorities in Malaysia, within the ambit of our laws and international obligations."