By P. Gunasegaram
Probably not, considering that the AmBank group has had to make a payment of nearly RM54 million for non-compliance of certain regulations. Tiger takes a dive into what these mean.
Earlier this year, the Wall Street Journal reported that the equivalent of some RM2.6 billion was deposited into the accounts of Prime Minister Najib Abdul Razak at AmBank and AmIslamic Bank (see chart below).
After some hemming and hawing, it eventually came to pass that the transfers were admitted and they were termed as “political donations” by an unnamed person from the Middle East, by which token they have been justified by many top politicians in and out of the government.
The Wall Street Journal had reported these transfers of US$700 million into the accounts, most of which came from a single transfer from Falcon Private Bank of Singapore.
Falcon’s website says that since 2009, the Swiss-based private bank, founded in Zurich in 1965 as Ueberseebank and renamed as AIG Private Bank in 1998, is owned by the International Petroleum Investment Co, an arm of the Abu Dhabi government.
Interestingly, at a news conference in August, Bank Negara governor Zeti Akhtar Aziz had said that Bank Negara had passed matters related to the RM2.6 billion political donation to the relevant agencies responsible, presumably the Malaysian Anti-Corruption Commission (MACC). She took pains to explain that banks are required to inform the central bank of any suspicious transfers.
Presumably, the investigating authority to which the information has been passed is the MACC. Under the MACC Act, all monies paid to public officials, including donations, are considered to be gratification unless proven otherwise. One awaits the outcome of these investigations too.
At that time, the question that was being asked was whether Bank Negara knew about these transfers into the prime minister’s account. The latest sanction against the AmBank group would clearly indicate that it was not.
AmBank is paying a penalty of RM53.7 million to Bank Negara Malaysia over non-compliance with “certain regulations” and is setting aside RM100 million over four years to improve its processes and governance. This may well be unprecedented in the Malaysian banking sector.
The penalty is in relation to the central bank’s action pursuant to Section 234 of the Financial Services Act 2013 and Section 245 of the Islamic Financial Services Act 2013. Each section empowers Bank Negara to take action, including the power to impose monetary penalty, if it finds non-compliance with the respective Acts and associated regulations.
The clear implication from these chain of events is that Bank Negara was not aware of the flow of money into the accounts of the prime minister. That may well indicate an attempt to cover up the entire event.
It will be interesting to see what else Bank Negara might be able to do with the limited arsenal available to it under the Financial Services Act and its Islamic counterpart.
GRRRRR!!!
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