DBS, OCBC, Citibank and Swiss Life fined a total of $3.8m for breaches linked to Wirecard saga: MAS
Three lenders - DBS, OCBC and Citibank Singapore - and insurer Swiss Life Singapore have been fined $3.8 million for breaching anti-money laundering and anti-terrorism financing rules, in a matter related to the Wirecard scandal.
The Monetary Authority of Singapore (MAS) on Wednesday said the breaches were identified when it examined the four entities following news of irregularities in Wirecard AG’s financial statements, as well as the alleged involvement of Singapore-based individuals and entities in the matter.
The four financial institutions were found to have inadequate controls in place.
Breaches include failure to inquire into the background and purpose of transactions, failure to maintain relevant and up-to-date customer due diligence information relating to customers’ beneficial ownership, as well as failure to adequately establish the source of wealth of higher-risk customers and their beneficial owners.
“Although the breaches were serious, MAS did not find wilful misconduct by any staff of these financial institutions,” the regulator said.
Of the four entities, DBS was fined $2.6 million for breaches between July 2015 to February 2020 relating to accounts maintained by 11 corporate customers.
OCBC was fined $600,000 for breaches between June 2015 and January 2016 relating to accounts maintained by one corporate customer.
Citibank was fined $400,000 for breaches between September 2019 and June 2020 relating to accounts maintained by two corporate customers, while Swiss Life was fined $200,000 for breaches in May 2017 relating to an investment-linked life insurance policy it had underwritten.
MAS said that the financial institutions have taken “prompt remedial actions” to address the deficiencies that were identified. These include enhancements to their procedures and processes, and training to improve staff’s vigilance in detecting and escalating risk concerns.
It added that MAS has completed its investigation into business administration firm Citadelle for suspected contravention of the Trust Companies Act (TCA) by carrying on a trust business without a licence.
The investigation did not reveal any breaches of the TCA by Citadelle and no further action against the firm will be taken, MAS said.
The penalty comes a day after two former employees of Wirecard Asia were jailed on Tuesday for helping their superior embezzle funds from the subsidiary of the German-registered international payment services company.
This makes it the first Wirecard-related conviction in the world.
The alleged mastermind, Wirecard Asia vice-president of controlling and international finance Edo Kurniawan, escaped Singapore before he could be nabbed. There is an Interpol red notice issued against him.
Payments firm Wirecard was a darling of Germany’s tech industry until it collapsed spectacularly in 2020 after acknowledging that billions of assets it listed on its books did not exist.
The accounting scandal shocked the world and prosecutors are still pursuing those involved in the fraud scheme.