KUALA LUMPUR, March 2 — Former BSI Singapore banker Kevin Michael Swampillai said he and other colleagues had raised their suspicions about 1Malaysia Development Berhad (1MDB) and related companies like SRC International Sdn Bhd to the higher-ups within the bank, but said they were instead encouraged to continue carrying out the lucrative transactions involving huge sums of money.
Swampillai was testifying as the 44th prosecution witness in Datuk Seri Najib Razak’s trial, where the former prime minister is accused of having received RM2.28 billion of money originating or belonging to 1MDB into his private bank accounts.
Questioned by Najib’s lead defence lawyer Tan Sri Muhammad Shafee Abdullah, Swampillai confirmed that he felt it was odd that these Malaysian government-linked entities or sovereign wealth funds had chosen BSI Bank which was not even a large bank and confirmed the monies transacted were huge sums.
“Yes, I did have suspicions. I did have concerns at the very beginning during the SRC phase of these transactions, I voiced my concerns, not just SRC, but even Brazen Sky transactions, I voiced my concerns to my supervisors in the bank. I don’t think I was the only one for that matter, I believe there were loads of concerns being expressed by compliance in particular,” he told the High Court.
“I raised my concerns in the beginning but I think it sort of fell on deaf ears within the higher echelons of the bank because nothing was being done to stop these transactions.
“But there was no factual basis for these concerns because there was no information forthcoming from clients on these transactions. The main question was where is the money going to eventually end up, with whom, where — that question — was never answered, was never provided by the account signatory or Jho Low despite the fact that question was posed many times but was never answered.
“And ultimately a decision was taken by higher-ups in BSI Bank because those transactions continued unabated despite concerns being expressed on the ground in terms of the veracity of these transactions,” he said.
While saying he could not comment on how BSI higher-ups discussed the suspicions after such concerns were raised, Swampillai said they had in fact encouraged instead of stopped these transactions.
“They went behind closed doors, talked about it, but ultimately they did not come down and say ‘let’s stop the transactions, let’s close these accounts’. In fact, they encouraged these transactions,” he said.
Shafee: With hindsight, you agree with me they encouraged the transactions because BSI was making loads of money?
Swampillai: Absolutely, yes.
Asked if Najib would not have to sit in the accused’s dock if BSI higher-ups had taken the trouble to check with the companies’ board of directors instead of taking Low Taek Jho’s instructions, Swampillai said he believed that SRC, 1MDB and a firm now known to be a fake Aabar would not even have opened accounts with BSI bank if the bank had insisted on imposing higher standards of control such as requiring board minutes to prove approval for every single transaction.
Swampillai had explained that from a compliance perspective, all the bank needed was for the authorised signatory of the account to sign off on transactions, instead of having to view the board’s approval for such transactions.
Shafee then asked if it was possible that Low — better known as Jho Low —had chosen BSI as its compliance standards were low.
Swampillai replied: “I think he chose the bank because I think he figured out somewhere along the line that BSI was hungry for revenue and I think he correctly deduced the bank would
compromise a little in terms of opening these accounts and carrying out those transactions.”
SRC, 1MDB subsidiaries and the fake Aabar had all opened up bank accounts at BSI bank, after the bank met with and gave a presentation to Low in 2011 on banking solutions.
Low later chose the method of fiduciary funds, where money could be sent out while hiding the identity of the sender and receiver of funds, for BSI’s new client SRC, with this same method used for other companies like 1MDB and for a purported US$2.3 billion investment — now known to be worthless — by 1MDB.
Swampillai agreed that he had the impression that the driving force to move these funds around at “light speed” was Low, based on his experience with the people he dealt with.
Shafee today challenged Swampillai’s assertion yesterday that he had the impression that Najib was aware of these huge sums of transactions by 1MDB, SRC and related companies, asking if he could really imagine that Najib would be involved in the siphoning of money out in such a detailed manner.
Swampillai maintained his views: “So when I made those statements, it was inferences, what I meant was that I didn’t think that an individual like Jho Low could command billions of dollars at whim without him having somebody that he needed to check with, run it by with, and that’s what I meant. Which is why I inferred the apex decision maker for that in terms of would have been the prime minister of Malaysia.”
Yesterday, Swampillai had listed several reasons why he believed former finance minister Najib knew about the 1MDB transactions, including Low touting himself as Najib’s adviser, and the huge sums of money and frequency of the transactions involving the Finance Ministry-owned companies which he believed would have to have approval issued by a high-ranking government official like a prime minister.
Najib’s 1MDB trial before judge Datuk Collin Lawrence Sequerah resumes this afternoon, with Shafee expected to continue cross-examining Swampillai.