1MDB scandal: PIO banker banned for not reporting suspicious transactions

SINGAPORE: An Indian-origin banker has been issued a 10-year prohibition order and a 24-month conditional warning by Singapore’s top banking regulator for his role in the 1Malaysia Development Berhad (1MDB) scandal, involving former Malaysian Prime Minister Najib Razak.

Raj Sriram, former deputy chief executive and head of private banking at BSI Bank’s Singapore branch (BSIS), was banned by the Monetary Authority of Singapore (MAS) from providing any financial advisory services for a 10-year period starting from Monday, The Straits Times reported.

Najib Razak, who was Malaysia’s prime minister from 2009 to 2018, and is serving a 12-year jail term, co-founded 1MDB and chaired its advisory board until 2016. The MAS order follows a 24-month conditional warning issued to Sriram in September 2021 by the Commercial Affairs Department (CAD), which investigates financial crimes.

CAD’s probe found that there were reasonable grounds for BSIS to file suspicious transaction reports regarding 1MDB’s transactions with its subsidiaries and with a purported subsidiary of the Abu Dhabi-based Aabar Investments. It said that BSIS did not file the reports due to Sriram’s neglect.

“BSIS, of which Sriram was deputy-CEO and head of private banking, was a key conduit for tainted funds in the 1MDB debacle,” Ho Hern Shin, MAS deputy managing director for financial supervision, was quoted as saying in media reports.

Under the conditional warning, Sriram paid $150,000 to the Singapore Government’s Consolidated Fund, which is analogous to a bank account held by the Government, The Straits Times report said. According to CAD, Sriram will also continue to cooperate in 1MDB-related investigations and will not accept any directorship positions for a period of four years from September 6 last year.

BSI Bank’s Singapore unit was shut in 2016 for its role in the scandal, and the Swiss bank paid a composition penalty of $13.3 million. 1MDB raised billions of dollars in bonds for use in investment projects and joint ventures between 2009 and 2013.

The US Department of Justice said $4.5 billion was diverted to offshore bank accounts and shell companies, many linked to Malaysian financier Jho Low, who helped set up 1MDB in 2009.