Officials from the Bank of Maldives on Tuesday defended the bank’s role in the country’s biggest corruption scandal, seeking to deflect blame to the central bank’s anti-money laundering watchdog.
More than MVR1.4 billion (US$91 million) stolen from the state-owned Maldives Marketing and Public Relations Corporation had been funnelled through the bank accounts of a private company called SOF during the previous administration.
Senior Bank of Maldives officials were summoned to parliament’s public finance committee on Tuesday after the Anti-Corruption Commission implicated dozens of BML employees over alleged collusion in the embezzlement scheme, which went through the national bank when cheques paid to the MMPRC were deposited into SOF accounts and transferred out in large sums.
MPs expressed concern with the lack of oversight and questioned why BML had allowed cheques issued to MMPRC to be deposited into private bank accounts. Despite the MMPRC cheque endorsement policy requiring the signature of two board members, cheques honoured by BML were endorsed with only one signature.
During the two-hour meeting, deputy chief executive officer Mohamed Shareef insisted that the bank had followed legal procedures.
“In banking terms, there is no connection between this cheque and that account [MMPRC]. For example this cheque can be deposited at Bank of Ceylon or any other bank as well,” Shareef said.
The bank did not require a company board resolution to honour a cheque, he said.
Shareef said BML fulfilled its responsibility by reporting the transactions to the central bank’s Financial Intelligence Unit, an independent agency tasked with flagging suspicious transactions after collecting and analysing information about money laundering.
The bank’s interim risk officer, Yameen Adam, told MPs that following the reporting, the bank took action as instructed by the FIU.
“[The bank] halted transactions from the account. After discussions with the FIU, we were advised that the bank did not have the authority to hold any bank account or any transaction. That, that is the responsibility of the FIU,” Yameen said.
Pressed to reveal who gave the order to release the bank account, the BML officials initially refused to comply. However, compelled by the committee chair to respond, Adam said deputy governor Neeza Adam had been temporarily in charge of the FIU at the time the transactions were reported in November 2014 as then-FIU head Athif Shakoor was on leave.
From December onwards, the bank dealt with Shakoor, Adam said. Both Imad and Shakoor ordered the bank to release the account, he alleged.
On Tuesday, former assistant governor Neeza Imad – who resigned from the central bank in August 2017 after her nomination for the vacant governor post was withdrawn – issued a statement denying the allegation that she had ordered BML to release SOF’s bank accounts.
Former FIU chief Shakoor has meanwhile asked the public finance committee to give him the opportunity to respond to the allegation, local media reported on Wednesday.
When MPs asked whether BML believed it had facilitated the embezzlement, Shareef insisted that employees were innocent of any wrongdoing in the scandal.
But lawmakers were skeptical.
Committee chair MP Mohamed Nashiz questioned whether the bank has halted any regular transactions without FIU intervention.
Shareef acknowledged that the bank regularly halts transactions while customers provide the details.
“We have a normal procedure where the bank screens transactions under the [anti] money laundering act. We especially halt incoming foreign transactions to the accounts of our customers, because we need more information. If that information is given, we release the money, otherwise we send it back,” he said.
In the wake of the committee hearing, BML has been on the defensive on social media, responding to criticism via its official Twitter account for the first time.
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