Enforcement Directorate arrests ex-minister for money laundering

Karnataka's Congress leader DK Shivkumar has been arrested by the Enforcement Directorate of India in connection with a money laundering case. Officials stated that he had been arrested in accordance with the provisions of the Prevention of Money Laundering Act, so that he could be interrogated.

This comes after an income-tax department charge sheet was filed against him and others in a Bengaluru court for alleged tax evasion and hawala transactions. The Income Tax Department accused Shivakumar and his associate S K Sharma of transporting large sums of unaccounted cash through 'hawala' channels with help from others.

Central Bureau of Investigation files case against Mansoor Khan

The Indian Central Bureau of Investigation (CBI) has filed a case against the managing director of I-Monetary Advisory (IMA), Mansoor Khan, and against its group entities for a multi-crore Ponzi scheme through which the entities and Mr Khan had allegedly duped several investors.

Khan fled to Dubai and was arrested shortly after his arrival. Charges of criminal conspiracy, criminal breach of trust, cheating, and dishonestly inducing delivery of property have been registered, while the CBI continues to probe the illegal activities of IMA and its entities.

The Enforcement Directorate files money laundering case against Rolls-Royce and others

The Enforcement Directorate (ED) has filed a criminal case to look into money laundering charges in an alleged case of corruption involving Rolls-Royce. Rolls-Royce allegedly made a payment of over Rs 77 crore (USD 10 million) to an agent in order to win contracts from Hindustan Aeronautics Limited (HAL), Oil and Natural Gas Corporation (ONGC) and GAIL. This action comes after a 5-year inquiry, initiated on the basis of a complaint from the defence ministry about Rolls Royce's activities.

The business between HAL with Rolls-Royce was said to be in the range of Rs 4,700 crore between 2000 to 2013, and it is alleged that Rolls-Royce had paid Rs 18 crore to Singapore-based Ashok Patni as 'commercial advisor' in the 100 supply orders of Avon and Allison engines' spare parts to HAL between the years of 2007-11.

Sebi to unearth new whistle-blower mechanism for auditors

Capital market regulator Securities and Exchange Board of India (Sebiplans to set up a new whistle-blower mechanism for auditors and other 'gate-keepers' with the purpose of uncovering financial irregularities and other fraudulent transactions at listed companies. This move comes after several auditors in listed companies exited from their audit positions after the companies failed to take remedial action for financial wrongdoings following auditor recommendations.

The proposal remains in its early stages, with expectations of a detailed consultation process with key stakeholders.

South Korea

South Korea's Minister of Justice steps down amidst corruption scandal 

Cho Kuk, former Minister of Justice of South Korea, stepped down on 14 October 2019 after approximately one month in the position. 

Cho and his wife have been the subject of investigation for allegedly forging a college award for their daughter and investing in suspicious equity funds. The scandal sparked national mass protests for four weeks.

Cho's resignation was accepted by President Moon Jae-in, who was also criticised for the turmoil created by his appointment of Cho. 

The proposal remains in its early stages, with expectations of a detailed consultation process with key stakeholders.


Securities Commission announces anti-corruption plans

The Malaysian Securities Commission has announced plans to tackle corruption and to improve the standards of corporate governance within the country. Its Action Plan serves as a supplement to recent legislative changes made to the Malaysian Anti-Corruption Commission Act, which introduces corporate liability offences for both Malaysian companies and foreign companies conducting business in Malaysia.

The Action Plan requires listed companies in Malaysia to implement effective frameworks to tackle corruption, consistent with the government's Guidelines on Adequate Procedures (2018).

Proposed amendment to give wider power to the MACC 

Last year, Malaysia passed the new Section 17A on the Malaysian Anti-Corruption Commission (MACC) Act (the Act) with regard to the Corporate Liability provision which will come into force by 1 June 2020. 

More recently, an amendment to Section 36 of the Act (the Amendment) has been proposed which would give power to the MACC to require an individual to declare all his or her property in circumstances where they are identified as potentially living a lifestyle beyond their income level. The current Section 36 of the Act only allow the MACC to request a person to provide such a statement after he or she is already under investigation. This Amendment has been scheduled to be tabled in Parliament before year end. 

Potential financial crime centre in Malaysia to combat money laundering 

As part of the effort to combat money laundering, a bill to set up the National Anti-Financial Crime Centre (NFCC) was passed by the Lower House of the Parliament of Malaysia.  If the law is ultimately passed, the NFCC will play the role of facilitator amongst 12 enforcement agencies and the government entities in combating money laundering while managing a centralised data system on financial crime, including cryptocurrency. The NFCC is also expected to provide advice to the prime minister in relation to financial crime.

Bursa seeks consultation for amendments to Listing requirements

Bursa Malaysia has announced a consultation paper for amendments to the Listing Requirements, including requirements relating to anti-corruption measures.

This proposal is likely to address the fact that, according to the Securities Commission, only 59% of listed companies had an anti-corruption policy, of which a majority had gaps. 

The key amendments proposed require a listed issuer's board of directors to: (1) establish and maintain policies and procedures on anti-corruption and whistle-blowing; (2) conduct annual reviews of anti-corruption and whistle-blowing policies and procedure; and (3) include corruption risk in annual risk assessment frameworks.

Vietnamese businesswoman jailed in Malaysia over US$83,000 bribe 

The Session Court of Malaysia has been sentenced to three years' imprisonment and a RM1.75 million fine (approximate US$420,000) for offering bribes amounting to  RM350,000 (approximate US$83,000) to Malaysian Maritime Enforcement Agency (MMEA) officers in exchange for the release of four Vietnamese fishing boats that had been seized by the MMEA. The Action Plan requires listed companies in Malaysia to implement effective frameworks to tackle corruption, consistent with the government's Guidelines on Adequate Procedures (2018).

Corruption charges against CEO of Companies Commission over RM 5million graft The former Chief Executive Officer of the Malaysia Companies Commission, Datuk Zahrah Abd Wahad Fenner and her son were charged at the Sessions Court for receiving graft of more than RM 5million (approximate US$1.2 million). Both were ordered by the court to surrender their passports and report themselves at the MACC headquarters once a month during their bail period. 


Legislators approve motion to revise oversight of KPK

Indonesian legislators have approved a motion to revise oversight of the Corruption Eradication Commission (KPK). The KPK is responsible for investigating corruption amongst Indonesian state-owned companies, government agencies as well as the private sector. For almost two decades, the KPK operated independently, but recent amendments to the 2002 law that created the agency will now place it under governmental oversight. President Joko Widodo has said the change would involve the establishment of a board to supervise the KPK, in order to prevent the misuse of authority.


Ministry of Law calls for registration of precious stones and metals dealers

The Singaporean Ministry of Law has announced that all precious stones and metals dealers falling under the remit of the Precious Stones and Precious Metals (Prevention of Money Laundering and Terrorism Financing) Act must register with the Registrar of Regulated Dealers by 9 October 2019.

It is an offence for any person to act or hold out as a regulated dealer without registration, unless the exemption applies. This regime follows from the government's efforts to target money laundering and terrorism financing (ML/TF) in the country.

Singapore resident fined $5,000 for letting foreigner use his name to set up local company for money laundering

A Singapore resident was found guilty and fined $5,000 fine for "selling" his name to a non-Singaporean to incorporate a local company that was used to money launder.  In August, the Monetary Authority of Singapore stressed that it closely monitors shell companies in fighting money laundering, prompted by the increase in Singapore-incorporated shell companies being used as fronts to channel illicit cash flows. The regulator acknowledged that, although shell companies have legitimate business purposes, they can be abused to facilitate crimes.


Almost 300 Chinese individuals arrested for cyber-related crimes in the Philippines Philippine immigration agents arrested 277 Chinese accused with running an online investment scam, leading to the defrauding of more than 1,000 Chinese nationals. The arrests were made during the course of a raid by the authorities in the Philippines, which had been coordinated with Beijing.


Thailand's NACC to monitor corruption in development projects

The National Anti-Corruption Commission (NACC) of Thailand has announced that it will monitor state development projects which may be prone to abuse, and will suspend them if the Commission detects any irregularities.  The NACC will monitor closely the budgets disbursed by government to local administrative bodies in these projects, stating budget abuses as the most important factor leading to problems. There are, however, inconsistencies in budget rules among different state agencies, as well as regulations set by the Finance and Interior ministries. Commissioner Bunyawat Khrueahong has commented that these inconsistencies must be remedied by the government, as they have caused serious problems in the past.

Sri Lanka

Government requests extradition of ex-central bank chief from Singapore

The Sri Lankan attorney-general has forwarded a request to Singapore for the extradition of the ex-chief of the central bank of Sri Lanka, Arjuna Mahendran. Mahedran is a Singaporean national of Sri Lankan origin, who has been accused of passing confidential information to his son-in-law, resulting in undue profits. Mahendran was named as a suspect in February 2018 and fled the country. In June this year, Mahendran was indicted for causing losses of about $11 million to the state.

The Sri Lankan government has forwarded the relevant request papers to the Singaporean government for its consideration.


Ex-minister took bribes amounting to $3m

Police have arrested two information ministers, Nguyen Bac Son and Truong Minh Tuan, for allegedly taking bribes in connection with a deal at a state telecommunications firm known as MobiFone.  Son has been accused of accepting $3 million in bribes, whilst Tuan has been accused of receiving a $200,000 bribe from AVG former chairman Nhat Vu. Reports suggest that both men have admitted to accepting the bribes.

Ho Chi Minh City stresses importance of money laundering rules in real estate sector  The Ho Chi Minh City Department of Construction has asked real estate companies, brokers and trading floors to strictly follow preventative measures against ML/TF, including customer identification, monitoring transactions made by high-risk customers, and updating customer information. The Department of Construction also requested its construction inspectors strengthen their inspection and examination at these real estate companies.

Vietnamese exports investigated for origin fraud and tax evasion

The Trade Defence Department, Ministry of Industry and Trade (MoIT), has investigated certain Vietnamese exports for fraud and tax evasion, and has urged action from the Vietnamese government. According to the MoIT, there were 15 instances of tax investigations on those exports between the years of 2000-2016, with 6 companies investigated in 2016 and 2017. The number of cases is expected to increase as firms have started to move production to Vietnam.

Among 13 listed products in the investigation, hardwood constituted one of the critical exports. The decline of the export of Chinese plywood has resulted in an increase in Vietnamese export to the US, including suspicious products. The Deputy Minister of Industry and Trade Tran, Quoc Khanh, has indicated there may also be investigations into Vietnam's steel exports, as well as products such as textiles, garments, footwear and cashews.