Published by Straits Times – 1st November 2016
SINGAPORE – On the second day of the first 1MDB-related trial, revelations emerged about the lengths to which ex-BSI banker Yeo Jiawei and his former supervisor Kevin Swampillai went to hide their “secret profits” as investigations by the Singapore authorities intensified.
Mr Swampillai is one of nine witnesses called by the prosecution as they proceed on four of 11 charges against Yeo, the first person to be tried for the role he allegedly played in a massive money laundering operation linked to Malaysian state fund 1Malaysia Development Bhd.
Prosecutors in at least four countries – Singapore, Switzerland, Luxembourg and the US – are looking into money flows from the state fund, set up in 2009 for national development. Prime Minister Najib Razak, who has denied any wrongdoing, has ended 1MDB probes at home.
The US Department of Justice moved in July to seize over US$1 billion (S$1.39 billion) in assets connected with money laundered from 1MDB, as part of the US$3.5 billion it claims was misappropriated between 2009 and 2015.
Prosecutors in Singapore began proceedings on Monday on four charges related to Yeo’s attempts to pervert the course of justice by asking witnesses to lie for him. The remaining charges relating to money laundering, cheating and forgery will be dealt with later.
In testimony on Tuesday (Nov 1), Mr Swampillai, former head of wealth management services for BSI Bank Singapore but now unemployed, revealed that he had received about US$5 million (S$6.95 million) in referral fees or secret profits from “implementing various structures” and “undertaking financial arrangements” for a group of clients of BSI.
Yeo himself had amassed a fortune of $26 million by the age of 32 from his 1MDB dealings, the prosecution said on Monday.
The idea for earning such commissions began during a meeting at a trip they took to Labuan in 2012.
Mr Swampillai told the court: “We would find an intermediary who would be used to identify certain funds, and have conversations with the funds about the nature of underlying transactions that would take place, and the kind of fees that the fund would earn.
“We were trying to find a margin between what the bank earned, what the fund managers earned, and create a margin that would be paid to Yeo and myself.”
One of the entities Yeo and Mr Swampillai received commissions from was Bridge Partners International Management (BPIM), a Cayman-registered fund managed by Bridge Partners, a Hong Kong-based fund manager. In September 2012, 1MDB sold its shares in a venture for US$2.32 billion and received units in the fund.
Other than BPIM, Yeo and Mr Swampillai were also getting commissions through Bridgerock Investment and GTB Investment, both beneficially owned by them respectively, from another fund called Devonshire, Mr Swampillai said.
As the Commercial Affairs Department intensified their probe into the financial dealings of both men in connection to the fund, they began having more face to face meetings and switched to using social media Telegram, which had a secret chat feature.
The men even devised a “ping” or missed call system to indicate to each other that they haven’t been pulled in for questioning for the CAD. “If I pinged him in the morning, and he didn’t respond, that would be a sign that he had been picked up by the CAD,” Mr Swampillai had told the court on Monday.
After Yeo left BSI in 2014 and started working for Malaysian tycoon Low Taek Jho – also known as Jho Low, a key figure in the 1MDB scandal – Yeo became known by his code name “James” to individuals in circles he was involved in, Mr Swampillai said.
“There was a great deal of secrecy in what they did and how they spoke to each other. Fictitious names were used when in reference to certain individuals,” he said.
After Yeo left BSI, both men communicated fairly openly through phone calls, Telegram and Whatsapp.
“But as things started to get tense with information coming out in media in relation to these transactions and the CAD investigations began, communications were almost exclusively through Telegram and use of secondary phones,” he said.
“When I was asked to use Telegram, I started to feel paranoid as Yeo was taking all these measures to hide his conversations,” he said.
Yeo’s trial is expected to run until Nov 11.
Besides Yeo, two other former BSI employees are also facing charges. On Oct 10, Yak Yew Chee and Yvonne Seah were charged with carrying out suspicious money transfers for Jho Low.
Mr Kelvin Ang, said to be a broker with Maybank Kim Eng, has also been charged. He is alleged to have paid a research analyst to produce a favourable valuation report on certain 1MDB assets. Ang’s pre-trial conference will be held on Nov 17.
