Controversy around the Malaysian state-run fund and claims of illicit financial transfers continue, with reports saying that authorities are widening their net of banks under scrutiny to UBS.

Global investigations linked to Malaysian state-run fund 1MDB, which have already seen Singapore authorities move to rescind a merchant banking licence from BSI’s local unit, could embroil UBS, media reports said. 

Documents suggest there were transactions involving UBS and 1MDB, and a British Virgin Islands subsidiary of IPIC/Aabar, known as Aabar Investments PJS Limited, in 2014, according to the Malaysia Chronicle yesterday. 

Another news report said the Monetary Authority of Singapore could issue a statement on the matter imminently, although there appeared to be no such statement from the regulator when this news service went to press. This news service has also contacted UBS about the matter and may update in due course.

The Malaysia Chronicle report, which features a copy of financial transactions on its website, shows that Aabar’s main bank account in Singapore was with UBS. The report said it shows that just under $2 billion passed into a UBS Singapore account belonging to Aabar during 2014. The transfer documents also reportedly show that a large amount of the fund’s $3 billion bond issue raised by  Goldman Sachs in 2013 was in fact passed through BSI Bank in Lugano to the “fake Aabar” during 2014, using the UBS account, it said.

1MDB has repeatedly denied wrongdoing.

Authorities in Switzerland, Singapore, Luxembourg and the US have become involved. Swiss authorities, for example, have frozen certain bank accounts linked to 1MDB, while the Department of Justice in the US has looked into Goldman Sachs’ transactions, although the Wall Street titan is not accused of wrongdoing.

In the case of BSI, the Monetary Authority of Singapore recently decided to remove the merchant banking licence of the bank's business in the city, blasting the bank for serious lapses in its anti-money laundering controls. The licence removal is the first time such action has been taken in Singapore since 1984. The action also highlights how Singapore is keen to avoid the taint of dirty money that in the past had been damaging to such rival hubs as Switzerland.