SINGAPORE: Singapore's central bank on Tuesday said it was kicking out Switzerland's BSI Bank, which has been linked to a global money-laundering scandal that has embroiled neighbouring Malaysia's Prime Minister Najib Razak.
In the toughest legal action so far in the crisis rocking Malaysian state fund 1MDB, Switzerland also disclosed it had launched criminal proceedings against the parent firm BSI SA for "deficiencies" in its internal organisation.
"BSI Bank is the worst case of control lapses and gross misconduct that we have seen in the Singapore financial sector," Ravi Menon, managing director of the Monetary Authority of Singapore (MAS), said in a statement.
MAS said it had asked state prosecutors to investigate six senior executives of BSI Bank for possible criminal offences and fined it Sg$ 13.3 million ($9.6 million) for 41 breaches of Singapore's laws against money laundering.
Among those facing investigation is former chief executive Hans Peter Brunner.
Two Singaporean executives of the bank are already facing criminal proceedings in the city-state, which is Southeast Asia's financial hub and hosts more than 200 banks.
BSI has been operating as a merchant bank in Singapore since November 2005, offering private banking services to wealthy individuals.
The last time Singapore stripped a merchant bank of its status was in 1984, when the local branch of Jardine Fleming was shut down for "serious lapses" in its advisory work.
Najib, who founded 1Malaysia Development Berhad (1MDB) in 2009, has battled allegations that billions were looted from the investment vehicle in a vast campaign of fraud and embezzlement stretching from the Middle East to the Caymans.
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