Singapore’s banking giants embroiled in billion-dollar money laundering case

SINGAPORE - Some of the biggest local and international banks in Singapore are becoming embroiled in one of the country’s largest money laundering cases.

DBS Group Holdings, Singapore’s largest lender, and Bank of Singapore, the private banking arm of OCBC Bank, are creditors to investment companies linked to individuals arrested and charged earlier in August in a

major money laundering scandal involving over $1 billion of assets

, according to business filings seen by Bloomberg News.

One of the accused also tried to cheat Standard Chartered Bank with fake documents, according to a court hearing in Singapore on Wednesday. 

The banks join a list of financial institutions – including Malaysia’s CIMB Bank, Citigroup’s local subsidiary and Deutsche Bank – to be linked to the suspects in the alleged money laundering ring.

Prosecutors have said that they are seeking documents from at least 10 financial institutions in relation to the case, although they were not named. 

Beyond the banks, property agents, precious metals dealers and golf clubs in Singapore have also been drawn into the scandal. This has raised questions about guard rails against illicit money flowing into the financial hub.

Bank links

In a filing, DBS registered four charges – generally referring to a form of security interest usually taken by a lender to secure repayment of a loan – on Aug 18, 2021 for Aiqinhai Investment.

The company’s director and sole shareholder Su Haijin is

among the 10 individuals who have been indicted in a Singapore court

for offences including money laundering and forgery.

Bank of Singapore registered a charge on Jan 7, 2022 for Xinbao Investment Holdings. One of the company’s two directors is Su Baolin, who is also among the individuals charged.

A spokesman for DBS said the lender will continue its work “to make Singapore a place where criminals cannot find harbour”, though there was no comment on specific names.

OCBC declined to comment, while StanChart, which Su Baolin allegedly tried to cheat, did not immediately respond to a request for comment.

Both the investment companies linked to DBS and OCBC have listed office addresses in the business district, while the two accused directors have upscale residential addresses.

The banks’ facilities are secured against “all monies” at the companies, according to the filings, which did not specify the size of the exposures. 

Before this case, Singapore was rocked by scandals involving huge money flows in Malaysia’s state fund 1Malaysia Development Berhad and German payments company Wirecard. These blow-ups have led to financiers being banned, people being jailed or banks getting slapped with fines for inadequate controls.

Singapore has been moving to try to curb illicit flows as the country gains in stature as a key financial and wealth hub. In May, Parliament passed a Bill that paved the way for banks to share information on potentially risky clients.

The Monetary Authority of Singapore, when asked by Bloomberg News for comment, referred to its earlier statement where it said the regulator is undertaking supervisory engagements with financial companies where potentially tainted funds have been identified. And it will take “firm action” against those found to have breached anti-money laundering and related rules.

More charges

Some of the 10 individuals were on Wednesday charged with more offences in court, where hearings were ongoing throughout the day for all of them.

The additional charges are related to money laundering and forgery. Prosecutors said the accused are wealthy and have overseas assets. BLOOMBERG