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Singapore fines financial firms over Wirecard scandal

By Nagasunder in US business news, posted June 22, 2023

Singapore's Monetary Authority (MAS), the country's financial regulator, has imposed fines on four companies for breaches related to the Wirecard scandal.

The penalties amount to S$3.8 million ($2.8 million; £2.2 million), according to MAS.

While the breaches were deemed serious, MAS did not find evidence of "wilful misconduct" by employees at the financial institutions involved.

The fines were levied on Singaporean banks DBS and OCBC, as well as the local branches of US-based Citigroup and insurance firm Swiss Life.

DBS, being the largest bank in Singapore, received the highest penalty with a fine of S$2.6 million.

MAS cited DBS's failure to adequately establish the source of wealth for high-risk customers and neglecting to inquire into the background and purpose of unusually large transactions.

Meanwhile, two former employees of Wirecard Asia Holdings were sentenced to jail in Singapore.

James Aga Wardhana received a 21-month sentence, while Chai Ai Lim was handed a 10-month term.

These are the first criminal convictions worldwide in connection with the Wirecard scandal.

Wirecard, a German payments firm, filed for insolvency in 2020 after revealing a €1.9 billion ($2.1 billion; £1.6 billion) shortfall in its accounts.

Former CEO Markus Braun is currently on trial, facing allegations of involvement in what has been dubbed the largest fraud case in German history.

He is charged with fraud, breach of trust, account rigging and market manipulation, crimes carrying a potential sentence of up to 15 years under German law

Prosecutors claim that Braun approved inaccurate financial reports and that Wirecard fabricated documents to falsely represent funds it did not possess.

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Braun has denied any wrongdoing, and the trial is expected to continue until 2024.

In April of this year, German regulators fined and banned accounting firm EY (Ernst & Young) for its handling of audits related to Wirecard.

The ban prohibits EY from accepting significant new audit mandates for a period of two years.

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