Singapore police freeze two bank accounts linked to 1MDB probe

By: | Published: July 22, 2015 2:53 PM

Police in Singapore said on Wednesday that they have frozen two bank accounts in connection with a probe into alleged financial mismanagement and graft at Malaysia's troubled state fund 1MDB.

Police in Singapore said on Wednesday that they have frozen two bank accounts in connection with a probe into alleged financial mismanagement and graft at Malaysia’s troubled state fund 1MDB.

The move is the first time accounts outside of Malaysia have been frozen in connection with the investigation, which has left Malaysian Prime Minister Najib Razak facing his biggest crisis since he took office in 2009.

“On 15 July 2015, we issued orders under the Criminal Procedure Code to prohibit any dealings in respect of money in two bank accounts that are relevant to the investigation,” Singapore police said in a statement on Wednesday.

It did not identify the banks or the accounts in question because the investigation is continuing.

A 1MDB spokesman declined to comment.

1MDB, a property-to-energy group whose advisory board is chaired by Najib, is facing criticism over its debt of nearly 42 billion ringgit ($11.09 billion) and alleged mishandling of its finances.

The freezing of the Singapore bank accounts follows a similar move in Malaysia where a task force investigating 1MDB said earlier this month that it had frozen half a dozen bank accounts following a media report that millions of dollars had been transferred to accounts belonging to Najib.

The Wall Street Journal reported on July 3 that investigators looking into 1MDB had traced close to $700 million of deposits moving through Falcon Bank in Singapore into the personal account of Najib in Malaysia.

Reuters has not verified the WSJ report.

Najib has denied taking any money for personal gain and said the corruption allegations are part of a malicious campaign to force him out of office.

A 14-day notice period given to Dow Jones & Co, which publishes the Journal, to respond to a letter from Najib’s lawyers seeking clarification, ended on Tuesday.

Singapore’s central bank has also said it is in contact with financial institutions in relation to the 1MDB probe and Falcon Bank has said it is co-operating with them on their enquiries.

On Tuesday, the Monetary Authority of Singapore said it is looking into whether banks followed rules on properly identifying customers and their sources of funds and on reporting suspicious transactions.

“We’re actually looking back to see if they have done all these things,” MAS managing director Ravi Menon told a news conference following the release of the bank’s annual report.

In Malaysia, two people have been arrested this week as part of the 1MDB investigation.

The managing director of a company was arrested on Tuesday and remanded in custody, the state news agency Bernama said on Wednesday.

This follows the arrest of the director of a construction company at Kuala Lumpur’s international airport on Monday. The authorities did not reveal the identities of those arrested.

The task force looking into 1MDB comprises the police, the Attorney-General, the central bank and the Malaysian Anti-Corruption Commission. ($1 = 3.7870 ringgit)

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