Singapore’s financial watchdog has fined financial institutions including DBS and Citigroup over breaches related to the Wirecard scandal, one of Europe’s biggest accounting frauds.
The Monetary Authority of Singapore said on Wednesday that DBS, OCBC, Citibank Singapore and Swiss Life Singapore had been fined a total of S$3.8mn ($2.8mn).
The regulator said the four financial institutions had “inadequate anti-money laundering and counter financing of terrorism controls in place when they dealt with persons who were involved in transactions with, or had links to, Wirecard AG or its related parties”. However, it said it had not found evidence of wilful misconduct in its investigation.
Once the darling of Germany’s fintech sector, Wirecard collapsed in 2020 after admitting that about €1.9bn in cash was missing from its accounts.
Three of Wirecard’s most senior former executives have been on trial in Munich since December on charges of fraud, embezzlement and accounting and market manipulation. They include ex-chief executive Markus Braun, who denies wrongdoing.
Singapore was central to the fraud, with many key figures in the scandal based in the Asian financial hub. On Tuesday a state court handed down prison sentences to two former senior Wirecard finance executives, the first criminal convictions related to the collapse of the German payments group.
DBS, Singapore’s biggest bank, received the largest fine on Wednesday of S$2.6mn. The company said it accepted the MAS decision on lapses.
“While we detected and acted upon some of [the] activities through transaction monitoring and customer due diligence — and ultimately exited all relevant entities — we were unable to unravel the scheme in its entirety,” it said in a statement. “We acknowledge that we could have done better.”
Citi, which was handed a S$400,000 penalty, said: “The case dates back to before June 2020 and since then we have taken steps to strengthen our know your customer (KYC) process.”
Swiss Life, which was given a S$200,000 fine, said it had co-operated with authorities and that it had since implemented additional measures to “detect client misconduct more effectively”.
OCBC, which received a fine of S$600,000, did not immediately respond to a request for comment.
The fines come ahead of the Singapore trial scheduled to start next month of James Henry O’Sullivan, another figure alleged to have played a central role in the Wirecard scandal. While O’Sullivan has not been charged in Germany, prosecutors in the Munich trial claim that companies the Englishman controlled extracted hundreds of millions of euros from the payments company before it crashed into insolvency.
In Singapore, O’Sullivan faces charges of abetting the falsification of documents, including papers that helped persuade Wirecard’s auditors at EY that the company had extensive cash reserves until it was forced to announce that €1.9bn recorded in its accounts did not exist. If convicted, he faces up to a decade in prison.
Additional reporting by Donato Mancini in London
