SINGAPORE: DBS Bank had conducted due diligence on fund flows connected with 1Malaysia Development Bhd (1MDB).
It picked up on the accounts and fund flows linked to 1MDB, but it had believed there were no illicit activities involved, according to a report in The Straits Times.
DBS was one of the banks named by the Monetary Authority of Singapore over “instances of control failings” and “weaknesses in the processes for accepting clients and monitoring transactions” related to 1MDB.
The report quoted DBS Chief Executive Officer Piyush Gupta as saying: “A lot of questions were asked, a lot of due diligence done, but our teams on the business were satisfied.”
“In hindsight, were the accounts part of a complex (network)? Probably. Could we have done better in figuring it out? Of course we could have.”
These lapses happened mainly three years ago, and since then, standards at DBS “have gone to a different level”.
“We already tightened up a lot compared with 2013, partly because the MAS (Monetary Authority of Singapore) has also been tightening the standards over the last two to three years,” Gupta was quoted as saying.
“Last time, we would look at transactions and find them reasonable. Now, we ask two more questions. But there is still work to do.”
The 1MDB investigations are ongoing, and it was unclear if DBS would be hit with a fine, The Straits Times quoted Gupta as saying.
Bloomberg had reported last month that MAS had uncovered “instances of control failings” in UBS Group AG’s Singapore branch, Standard Chartered Plc’s local unit and DBS Group Holdings Ltd, as well as “substantial breaches” of anti-money laundering regulations at Falcon Private Bank Ltd in the city-state.
MAS vowed to take action against the four banks for the lapses.
1MDB and 1MDB-related transactions are being investigated by several countries such as Singapore, Abu Dhabi, Switzerland, Hong Kong and the US.
Last month, the US Justice Department said more than USD3.5 billion had been misappropriated from 1MDB, and that it was seeking to seize about USD1 billion of assets it claimed had been laundered through the US banking system.