Swiss bank challenges sanction in Malaysia graft scandal

Switzerland's BSI bank said today that it has appealed a ruling ordering its dissolution over links to a corruption scandal engulfing Malaysia.
The appeal filed in Swiss Federal Administrative Court seeks to overturn a May 23 decision by banking supervisor FINMA which found BSI in breach of money laundering regulations with the Malaysian sovereign wealth fund 1MDB.
"BSI believes that FINMA's procedure leading to the decision was flawed in many respects and FINMA's decision as such is disproportionate and incorrect," the Lugano-based bank said in a statement.
BSI said it had been fully transparent about its relations with 1MDB over the past year.

"Where deficiencies have been recognised, BSI has taken, and continues to take corrective measures," it added, conceding "certain internal shortcomings in the past."
FINMA approved BSI's takeover by Zurich-based private banking group EFG International on the condition that BSI is integrated "and thereafter dissolved" within 12 months.

It ordered the seizure of 95 million Swiss francs (86 million euros/USD 96 million) of BSI's "illegally generated" profits.
Malaysia's Prime Minister Najib Razak has battled allegations that billions were looted from 1MDB in a vast campaign of fraud and embezzlement stretching from the Middle East to the Caymans.
The manner in which FINMA publicly linked BSI to that alleged fraud "was wholly inappropriate," the bank said, vowing to challenge the supervisor's version of the facts.

FINMA specifically accused BSI of failing to identify possible money-laundering over a four-year period until April 2015, especially when dealing with "politically exposed persons" whose dubious transactions involving hundreds of millions of dollars were not satisfactorily scrutinised.