![1MDB faces legal action from the Swiss-based BSI Bank if its president and group executive director obtained falsified bank statements from the Singapore branch. – Reuters pic, May 21, 2015.](http://www.themalaysianinsider.com/assets/uploads/articles/bsibank_zurich_reuters.jpg)
Putrajaya has denied that debt-laden 1Malaysia Development Berhad's (1MDB) president and group executive director Arul Kanda Kandasamy falsified bank statements pertaining to its subsidiary's accounts at the Singapore branch of BSI Bank.
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Ariff had asked Najib, who is also the prime minister and chairman of the state investment firm advisory board, how Arul Kanda had received bank statements that were now denied by BSI.
Ariff also said that if such falsification of documents were found to be true, 1MDB would be exposed to legal action by the Swiss-based bank.
Last month, whistle-blower site Sarawak Report had alleged that 1MDB gave out false information on its subsidiary’s accounts held at the Singapore branch of BSI Bank.
The website said it was passed "disturbing evidence" that showed BSI Bank had denied issuing documents supplied by 1MDB relating to the accounts for Brazen Sky Limited in Singapore.
“The documents were supplied to various authorities by 1MDB’s Arul Kanda and purported to show Brazen Sky’s statement of accounts in November 2014.
"However, the Swiss private bank has told the Singapore authorities that the document did not originate from them and does not represent a true account of the assets of the 1MDB subsidiary," Sarawak Report had said in an article on its site.
The site, which had been revealing information about 1MDB, said the information about the bank statements was reported back to Malaysia on March 13, two days after Najib issued a parliamentary reply that confirmed that its remaining US$1.103 billion had been “redeemed” from Brazen Sky’s alleged offshore fund in the Cayman Islands and was now being “kept in US currency” at BSI Bank Limited in Singapore.
Arul Kanda had stated on January 13 that 1MDB had redeemed in full the US$2.318 billion invested in a Caymans-registered fund, and repeated this statement in an interview with Singapore Business Times published on February 7.
He had said a portion of the funds, amounting to US$1.103 billion, would not be repatriated to Malaysia but be kept in US dollars.
However, DAP's Petaling Jaya Utara MP Tony Pua yesterday revealed an amended statement by the Finance Ministry, submitted as a parliamentary written reply, which said the Caymans funds were paper assets instead of cash.
In a reply to the Petaling Jaya Utara MP yesterday, Najib had said that the redeemed Cayman Islands money was an asset in US dollars.
Najib has also said the balance of the investment redeemed by 1MDB were assets in US dollars for the purpose to balance its liabilities which were also in dollars.
In March, however, Najib in a parliamentary reply to Pua had said the redeemed money was in cash form.
"This is an admission that it has no cash in BSI Bank Singapore. It is an admission that the whole redemption of its investments in Caymans is bullshit.
"It's paper, not cash. What they did was they shifted the paper assets from Caymans to Singapore," said Pua, a strident critic of the state-investment arm, at the Parliament lobby yesterday.
Criticism has been mounting over the Finance Ministry wholly owned investment vehicle, established in 2009, which has chalked up debts of up to RM42 billion, backed by Putrajaya.
The auditor-general is currently looking through 1MDB's books, with a preliminary report expected to be submitted to the Parliament in June, while Parliament's Public Accounts Committee (PAC) started its investigation into the company on Tuesday.
- TMI
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