Bank of Maldives (BML) have stated that the MMPRC embezzlement could have been prevented if central bank Maldives Monetary Authority (MMA) had taken action on the report submitted by the bank on state funds entering a private company's accounts through the tourism company.
Senior employees of BML were summoned to Parliament's Public Finance Committee for questioning regarding the MMPRC graft on Tuesday.
The government was to receive US$ 79 million for the leasing of islands through MMRPC. However, the state received only US$ 12.8 from the amount. The remaining funds were mainly embezzled through BML accounts of a private company named SOF Pvt. Ltd.
Deputy CEO of BML Mohamed Shareef stated at the committee meeting that after the Anti-Money laundering Act came into effect, SOF Pvt Ltd's transactions involving huge amounts of funds were noticed by the bank. During November 2014, a Suspicious Transaction Report (STR) was sent by the bank to MMA, alerting the central bank on the happenings.
SOF's bank accounts were on hold
Due to suspicions that SOF's transactions may involve money-laundering, the bank accounts of SOF were temporarily kept on hold by the bank in addition to alerting central bank, Shareef revealed.
However, the bank was told that they do not have the authority to hold SOF's account during tele-conferences with FIU that followed.
Shareef said the bank continued to alert FIU on SOF's activities, however, the authority did not order any action on the issue.
"We believe that if the FIU had taken action on the STRs submitted by BML under the Anti-money laundering and Terrorism Financing Act, the money laundering that took place through SOF Pvt Ltd could have been stopped', said Shareef.
No action taken due to fear of obstructing investigation
While SOF Pvt Ltd continued to conduct transactions in extraordinary amounts, the company had failed to justify the source of their funds, the audit report on the graft had noted. Committee member Dhandhoo MP Yaugoob Abdulla inquired why the bank continued to entertain the company's transactions while this was the case.
Answering the question BML's Interim Risk Officer Yaameen Adam said in order to identify who is benefiting from the suspicious translations, the bank has the authority to allow the suspicious accounts to continue operation, according to the Anti Money Laundering Act. The decision was made assuming that the investigation of the case was still ongoing as the FIU had not given specific instructions to the bank regarding the STR.
Additional STRs on SOF Pvt Ltd were not issued for the same reason, said Yaameen.
The committee asked if Customer Due Diligence (CDD) was not done on SOF while they continued to make transactions in amounts that were not harmonize with their business.
Responding to the committee, Yaameen said SOF's transactions were flagged due to CDD, and money laundering suspicions stemmed from the bank's investigations that followed the CDD.
During Tuesday's committee meeting, Shareef continued to deny that BML employees were involved in successfully executing the graft. Shareef said no bank employees had acted against the bank's rules and regulations, and the audits and investigations conducted into the scandal can confirm it.
However, many have bee pointing fingers at BML, therefore, the bank wishes for the investigation to be concluded at the earliest, requested Yaameen.
"We wish for the ACC's investigation into the scandal to be concluded soon, and bring an end to the suspicions that bank staff were involved in executing the graft", said Shareef.