It takes a Najib Razak to sink a 143-year old Swiss Bank


May 26, 2016

Malaysia Boleh: It takes a Najib Razak to sink a 143-year old Swiss Bank

http://www.malaysiakini.com

KINIGUIDE: The 1MDB saga has left a trail destruction across three continents, with key corporate and banking figures having to resign, bankers charged and accounts frozen.

However, the biggest casualty to date is BSI Bank, which faces criminal proceedings for, among others, failing to adhere to anti-money-laundering regulations in handling transfers linked to 1MDB. An international investigation, primarily led by Swiss and Singaporean authorities, has unravelled the 143-year-old bank.

Malaysiakini looks at the significance of these developments and BSI’s role in the 1MDB saga.

About BSI

Banca della Swizzera Italiana, or BSI, was founded in 1873.It began an international expansion in 1969 and spread its wings to Hong Kong in 1981 and later Singapore in 2005.

According to BSI’s 2015 annual report, it had 1,256 employees in Switzerland and 656 employees outside the country, with 310 in Asia.

It is currently owned by Grupo BTG Pactual but is in the process of being acquired by EFG International for 1.33 billion Swiss franc. The amount is expected to be lesser following regulators’ action against BSI.

The unmaking of BSI

Even before Swiss and Singapore authorities hammered the nail into BSI’s coffin, the bank was already disintegrating as the 1MDB probe gained momentum.

Last month, Bloomberg reported that several senior employees had left BSI Singapore, including committee members who vetted major clients during 1MDB’s time as well as its head of compliance.

The chief operating officer for BSI’s Asia operations, Gary Tucker, had also left the bank, while BSI’s head of Asia operations, Hanspeter Brunner, announced his retirement. But the most devastating blow came when Singapore on Tuesday ordered BSI Bank in the city state to be shut down.

It was the first such action by Singapore authorities in 32 years.Switzerland’s financial regulator, the Swiss Financial Market Supervisory Authority (Finma) also ordered similar action, approving EFG International’s complete takeover of BSI. This was on condition that BSI will be dissolved within 12 months through its integration into EFG International.

What did BSI do wrong?

Both Switzerland and Singapore authorities have released general statements on BSI’s offences, which have been short on specifics.In Switzerland, Finma concluded that BSI was in serious breach of the statutory due diligence requirements in relation to money laundering and serious violations of the principles of adequate risk management and appropriate organisation.

In Singapore, authorities found BSI to be in “serious breaches of anti-money-laundering requirements, poor management oversight of the bank’s operations and gross misconduct by some of the bank’s staff.” These were in context of investigations linked to 1MDB.

Connecting the dots

Prior to the investigations initiated by Swiss and Singapore authorities, whistleblower portal Sarawak Report had highlighted the role of BSI in the diversion of 1MDB’s funds.It started with the US$1.83 billion which 1MDB had channelled overseas for its joint-venture activities with PetroSaudi International between 2009 and 2011.

This is the same amount that Bank Negara later ordered 1MDB to repatriate, which the Malaysian fund had failed to do and for which it was fined. Of this sum, US$1.03 billion did not go to the joint-venture. It was instead diverted to Good Star Limited’s account at RBS Coutts in Zurich, whose beneficiary owner is Penang-born billionaire Jho Low.

Here is where BSI comes in.More than half of the diverted sum, or US$529 million, was transferred to Abu Dhabi Kuwait Malaysia Investment Corporation’s (BVI) account at BSI Singapore between June 28, 2011 and September 4, 2013. The beneficiary owner was also Jho Low.

Sarawak Report, based on leaked Singapore investigation papers, had as early as April last year reported that Jho Low controlled at least 45 bank accounts at BSI under various company names.

These revelations appeared consistent with the findings of Finma which noted: “In the context of the 1MDB case, the bank (BSI) failed to adequately monitor relationships with a client group with around 100 accounts at the bank.”

It said funds were moved within these accounts without proper justification. Coincidentally, 1MDB’s subsidiary Brazen Sky Limited also banked with BSI where its US$1.1 billion in ‘fund units’ was held.

Furthermore, Singapore court proceedings showed that SRC International, a former subsidiary of 1MDB, also had its accounts at BSI. BSI banker Yeo Jiawei was charged for allegedly signing a fraudulent reference letter in the name of BSI to Citigroup Inc’s head of anti-money laundering to facilitate the transfer of US$11.95 million from SRC International to Equity International Partners Limited.

The beneficiary owner of Equity International Partners Limited was Tan Kim Loong, an associate of Jho Low and also the original beneficiary of Tanore Finance that funnelled US$681 million to Prime Minister Najib Abdul Razak’s personal bank accounts.

Singapore prosecutors described this component as a “new front” in its investigation but it is unclear how it is linked to Jho Low’s movement of US$529 million into, within and out of BSI.

Information disclosed to the public is likely just a small portion of the investigations but more details are expected as court proceedings in Switzerland and Singapore commence.

Is this the end of the 1MDB saga? On the contrary, it is just the beginning. Sarawak Report claimed that the US$529 million in Jho Low’s account in BSI was cleared out of BSI Singapore and was believed to have been moved to Hong Kong.

It is unclear which financial institution it went to. Hong Kong authorities have acknowledged an investigation but little information has been provided so far.Finma is also reportedly looking into RBS Coutts, from which the US$529 million came from before it entered BSI’s system.

Furthermore, other banking institutions are also expected to be in the line of fire.One key institution is Falcon Private Banking, which Tanore Finance used to transfer US$681 million (often referred to as RM2.6 billion) into Najib’s AmBank account.

Sarawak Report claimed that US$650 million of this money was transferred back to Tanore Finance’s account at Falcon Private Banking in Singapore on Aug 30, 2013.

Interestingly, EFG International, which is set to take over BSI, had also acquired Falcon Private Bank’s Hong Kong arm for 800 million Swiss francs from Aabar Investments PJS in 2014.

This KiniGuide was produced by Nigel Aw.

Chris Hedges: America 2016


May 23, 2016

Chris Hedges:  America 2016

Erudite “ChrisHedges  is an American journalist, activist, author, and Presbyterian minister. Hedges is also known as the best-selling author of several books including War Is a Force That Gives Us Meaning (2002)—a finalist for the National Book Critics Circle Award for NonfictionEmpire of Illusion: The End of Literacy and the Triumph of Spectacle (2009), Death of the Liberal Class (2010), the New York Times best seller, written with cartoonist Joe Sacco, Days of Destruction, Days of Revolt (2012), and his most recent Wages of Rebellion: The Moral Imperative of Revolt (2015). http://www.wikipedia.org.

I like his views about government-big business– big bank partnerships.  His comments also seem to resonate well, especially among young American voters since The Bern (Bernie Sanders) has been making headlines in the US  primaries by giving Hillary Clinton a run for her money. So I thought I should share them with you on my Double 7 Day. And of course, I expect responses from all of you.–Din Merican

 

 

 

Malaysia’s Aurat Air–Regulatory Incompetence


May 23, 2016

Malaysia’s Aurat Air:  Regulatory Incompetence

by Mariam Mokhtar

Did the government simply rubber-stamp Rayani Air’s license to operate, without conducting detailed checks, including its cash-flow analysis and break-even point?

Mr. A A Kaprawi

The statement by  Deputy Transport Minister Dato Abdul Aziz Kaprawi that the government will “be more stringent and impose a stricter standard operating procedure on all airlines” should set alarm bells ringing. It suggests that the government acted with haste and was extremely complacent.

So, how deeply committed is our government to safety and good management practices? Rayani Air is Malaysia’s first syariah compliant airline, but like any other airline, it must comply with rules and regulations.

Starting an airline is not merely about buying or leasing aeroplanes, then painting them in the new livery. Nor is it about finding the pilots, ground and cabin crew, engineers, and other personnel, to operate an airline.

Providing halal food, prayers before take-off and on landing, not serving alcohol, and staff who cover their aurat will not make an airline popular. Good and reliable service, efficient and friendly staff, well maintained planes, popular routes and accessible airports are part and parcel of a good airline experience.

Like any other business, Rayani Air’s owners would need funding and would have provided a business plan, to satisfy its backers or the bank. Did Rayani Air not do enough homework with regards to long-term funding? It cannot run Rayani Air for a few months, and hope that revenue from sales will enable it to continue. Even a simple home-based business does not operate like that.

When Rayani Air soared above Kuala Lumpur, in December, many people were sceptical because few people choose a certain airline, because it serves halal food. They base their judgement on the price, good safety record and reliability.

The Con-Artists of Aurat Air

Within months, the airline was dogged with delays, cancellations, a cracked cockpit windscreen and maintenance issues. Amongst other things, passengers were furious that their boarding passes were not printed.

Passengers were forced to travel on a coach service provided by the airline, although they would have preferred to be put on a later flight. Delays were common and stories about 485 employees not being paid, were leaked to the press.

Things came to a head on April 11, when Rayani Air’s Air Operation Certificate (AOC) was suspended, for three months, after it temporarily halted its operations following a pilot strike. The airline had failed to seek the Department of Civil Aviation’s (DCA) permission before ceasing operations.

Instead of dealing with the criticism of the passengers and staff, Rayani Air’s Chief Executive Officer, Ravi Alagendrran, said that the cracked windscreen was due to sabotage. He did not bother to wait for the results of an investigation. His statement attracted bad publicity, because it suggested that the airline had enemies.

He later retracted this statement, but he had introduced doubt in people’s minds about safety and security. The shattered windscreen was spotted by pilots, before the flight took off. Passengers may have wondered whether the alleged saboteur had damaged a vital piece of equipment, in a hidden part of the aeroplane and the fault was not detected in time.

The CEO’s statement about sabotage, probably infuriated the people managing Langkawi airport, as passengers wondered if security in the airport was lax.

According to The Malay Mail Online, pilots had refused to fly because the company’s two aircraft had structural faults. The airframe, which is the aircraft’s mechanical structure, that  includes its fuselage, wings and undercarriage, was unsafe.

Perhaps, the blame should not rest solely with the airline bosses. The government and the DCA are also to blame. They gave Rayani Air the go-ahead. They rubber-stamped the permit to fly, without checking the safety and viability of the aeroplanes, and funding to operate, for more than three months.

The government must tell would be business owners not to commercialise Islam. The government must stop deluding itself and thinking that a syariah compliant service need not follow normal business guidelines. It is not God’s will that makes an airline safe, but man’s endeavour. –

http://www.theheatmalaysia.com/

 

Toward a Dystopian Malaysia:All Politics


May 17, 2016

Toward a Dystopian  Malaysia:All Politics

by Steven Sim

http://www.freemalaysiatoday.com

My  friend treated me to a stand-up comedy performance last Friday which was my birthday. The show featured four highly acclaimed comedians and everyone in the audience had a good laugh. What were we laughing at? Mostly jokes about sex, and very oddly, ourselves, about our silliness and stupidity.

One of the acts even had a female member of the audience come up the stage to spell “Laughs” with her derriere. She was a big woman, quite clumsy I must say but very sporting. The comedian kept making fun of the poor lady. And as can be expected, her antics elicited laughter from the audience.

The liberal, tolerant society

We cannot talk about race. The N-word must never be uttered. Here in Malaysia, the M-word cannot be spoken. It is sensitive. And then we are told we also cannot talk about religion. We may offend followers of a particular religion and they may turn violent towards us. It is sensitive.

Calling on Inspector Singh to help–Jaga Najib Depan Belakang, Kiri dan Kanan

So, instead of having laws to stop criminals like we used to, now we have laws to stop us from provoking would-be criminals. We’ve got laws that prevent us from commenting about race and religion. It is almost the same as legislating how women should dress so as not to “invite” rape.

Then it came to a point where we were not allowed to call one another “stupid”. We cannot ridicule or question someone else’s politics, for example. Look at all the “righteous” social media posts telling, even scolding us, not to call anyone stupid after the Sarawak election.

Because it is sensitive. As if our brain now is a big phallus ever-reacting to the slightest of stimulations. Perhaps one day not too far away, we will all not be allowed to call each other ugly or fat. These are sensitive remarks too.

We are not allowed to make each other angry anymore. Come to think of it, we actually have an Act of Parliament against making people angry. Section 3(1)(e) of the Sedition Act defines “seditious tendency” as promoting “feelings of ill will, hostility and hatred between different races or classes of the population of Malaysia”, and with the 2015 amendment, Section 3(1)(e) was created to include the promotion of “feelings of ill will, hostility and hatred between persons or groups of persons on the grounds of religion…”

What have we become? A nation legislated against making each other angry? Whatever happened to equanimity, forbearance, moderation, restraint, reticence, self-control, and sobriety?

It is easy to imagine the logical conclusion to this; I cannot comment on who you are, what you do, how you think, and vice versa, finally I, we, cannot say anything at all.

Because we are told, we need to respect the other person. The liberals’ idea of “multicultural tolerance”, my favourite living philosopher, Slavoj Žižek, used to say. As if respect now means, “shut up.”

There are two kinds of “respect” by the way:

The first kind is like when the white men came (sorry, did I make anyone angry with that label?) and they said to each other: “Let us respect the natives…even though they are stupid. Even though they bury their daughters alive. Even though they burn their widows along with the deceased husbands. Even though they bind-up a woman’s feet so small she can barely walk.” And then there is the other kind of respect, one where I assume you are more or less the same level as me and are expected to possess a certain degree of similarity in strength and wit. When you fall short, I call you stupid. Maybe I’m rude – but which one is respect, which one is patronising?

Comedians come to politics

Now, let’s go back to that stand-up comedy performance. Oddly enough, someone told me, now the only way you can make jokes about people and their stupidity and not get yourself into trouble is: quit politics and be a comedian.

I find the thought quite enlightening to be honest. We watch stand-up comedians quite a bit, and boy, how they “hentam” our stupidity as individuals and as a society. And we all laugh and laugh, gladly paying good money for being denigrated by them.

But what’s scarier.One day, just one fine day. Imagine if one of these comedians decided to run for office. He will tell us bluntly, “the truth”. He will say it to our faces, “this or that fellow is stupid, we should block them”. He will tell us he is here to protect us from stupidity. He will tell us he has a great plan to build a huge wall, to segregate between us and the stupids. (For the uninitiated, google: “Trump AND wall”.)

We are going bongkers-from Football to Doa

We, who are used to being “rational” – or are we? – we will then be shocked that many people are impressed by that comedian and want to hand over power to him.

The bar to be a hero suddenly becomes so low: one just needs to be brave to call another person stupid in his face. Because earlier no one was allowed to call anyone stupid or to say anything at all due to everything being “sensitive”. Everyone had to shut up on the pretext of being tolerant. The guy who finally said, “hey, stupid” is now the courageous leader who dared say the truth. Alas, the pent-up emotions of a society, who was stopped from making one another angry, finally rebels, resulting in the rise of fascism.

We need intolerance, not tolerance

The unfortunate thing is, we have substituted being political with being politically correct. The political problem of inequality now becomes the cultural problem of intolerance.

Because of the general disregard of politics, the problem of economic and political inequality inevitably becomes the problem of race and culture. One is rich or poor or powerful or weak not because of some systemic injustice but because of one’s race, or religion. The solution then, we are told, is to understand and tolerate one another: the other race is lazier, smarter, more scheming, less materialistic or more savvy, but let’s try to live with one another peacefully. The classic example here is once again national slogans encouraging us to see ourselves as one country, one nation, one people – 1Malaysia.

These are  UMNO Political Jokers

We are then misled to think that solving the world’s problems is not through political action, not through the institutionalisation of good governance and justice, but rather through respect and tolerance for those who are different from us. Hence, the oft quoted reminder to “jaga sensitiviti.”

How then should we move forward?

The first step is to realise that our problem is not mainly intolerance but rather injustice. Do not fall for this tolerance nonsense. It is about politics not political correctness. We need to move from subjective multicultural tolerance to the objective universal intolerance against human sufferings and oppression.

Recall the big woman who had to spell “Laughs” with her derriere. It was so painful, and yet hilarious watching her. The audience was enthusiastically cheering at her clumsy act and she eventually won the prize for her comedy: a large screen TV. And then she did the unexpected, grabbing the emcee’s microphone, she said: “I’m gonna give this to an orphanage in Kulim.” The hall erupted into huge applause, this time without laughter but with no less happiness. There was no mistake there, no one was confused or did not understand what was happening: we were united by our antagonism against human sufferings. It was a universal thing.

And we have seen this at work many times, even at a larger scale. Žižek provided an anecdotal example of this sort of solidarity; speaking of the 2011 protest at Tahrir Square, Egypt, he observed: “Here we have direct proof that freedom is universal and proof against that cynical idea that somehow Muslim crowds prefer some kind of religious fundamentalist dictatorship….The moment we fight tyranny, we are solidary. No clash of civilisations. We all know what we mean. No miscommunication here.”

We share the same antagonism towards human sufferings and oppression and the same anger against the stupidity which supports them. There is no mistake about it, there is no two ways about it – there’s nothing subjective about it. There is nothing to respect when people continue to support corruption and tyranny whether under duress or not.

Think about it. Here is Malaysia, think about the Bersih demonstrations. Malaysians of all races and religions, male and female, of all ages, went to the streets. And for those who could not attend in the national capital, especially from Sabah and Sarawak, they organised their own local Bersih gatherings. Once again, there was no miscommunication. There was solidarity among Malaysians, and even across the South China Sea, to demand for a free and fair election. We shared the same antagonism, we were united not by subjective tolerance of each other but by our objective intolerance against corruption and injustice.This is what we really need again.

Please do not make our society into one where no one is allowed by law to make another person angry because of some tolerance nonsense we mistake for real respect. The consequences of such a move is scary to say the least – it is the kind of material for novels about some dystopian society somewhere. There is no such human rights as the right not be angered. You reserve the right to call me stupid, and I, too, the same right. Because at times, being humans, we do stupid things and must be chastised.

Steven Sim is the Member of Parliament for Bukit Mertajam.

 

 

Malaysian Leader Najib’s Stepson Allegedly Funded U.S. Property Deals With 1MDB Money – WSJ


May 14, 2016

Malaysian Leader Najib’s Stepson Allegedly Funded U.S. Property Deals With 1MDB Money WSJ

by Bradley Hope and Tom Wright

The Panama Papers– Watch Video


 

May 11, 2016

The Panana Papers– Watch Video

Staggering  amounts of dubious/illicit money are involved. No small wonder the rich are getting richer and the gap between the filthy rich and the miserable poor is widening. The rest of us in between are suffering suckers who are made to bear the burden of heavy taxes.

It makes me wonder what central bankers and monetary and fiscal authorities around the world are doing to keep the financial system honest.–Din Merican