TWO former senior employees of UOB Kay Hian Private Limited (UOBKH) were charged on Wednesday for allegedly lying to the Monetary Authority of Singapore (MAS) in relation to reports on a then Catalist aspirant. Lan Kang Ming, 38, and Wee Toon Lee, 34, each face three charges of providing MAS with false information in October 2018 in relation to due diligence reports on an unidentified company applying to list on the Catalist board of the Singapore Exchange. MAS said in a media statement on Wednesday that it was performing an onsite inspection of UOBKH between June and August 2018, to assess the latter's controls, policies and procedures in relation to its role as an issue manager for Initial Public Offering (IPOs). During the examination, Lan and Wee were said to have provided different versions of a due diligence report relating to background checks on a company applying to be listed on the Catalist board of the Singapore Exchange. UOBKH had acted as the issue manager
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Bloomberg
18 August 2015
Singapore-based wealth managers, already under pressure from a global move towards tax information sharing, face a more immediate threat as Asian countries including Indonesia and India look to chase undeclared money in the low-tax city state.
A global crackdown on tax evasion launched during the 2008 financial crisis has already forced Switzerland and other European offshore hubs to surrender their prized bank secrecy.
Like those centres, Singapore has committed to automatically start sharing information with foreign tax authorities from 2018, in line with an agreement signed by more than 51 countries last year that seeks to put an end to tax evasion.
But Singapore banks face a more urgent challenge. Indonesia, Singapore’s main source of wealth assets, is considering offering a tax amnesty to individuals willing to repatriate funds from abroad - targeting US$225 billion Jakarta says is parked in Singapore alone. “Indonesia accounts for 30-50 per cent of business for private banks in Singapore,” a Singapore-based banker at a top global wealth manager told Reuters.
“Clients are worried and asking about this, (while) accounting and legal firms are pitching to help clients structure their transactions,” said another banker. Both declined to be named due to client confidentiality rules.
The second banker said that one client was considering whether to pass his wealth directly to one of his children, who is in the process of taking Singapore nationality.
Singapore, Asia’s second-largest offshore centre by assets behind Hong Kong, has thrived as a banking centre due to its political and economic stability, low taxes and rule of law. It manages US$470 billion of private client assets, Deloitte data shows.
Singapore’s central bank has said that it has a rigorous regime to combat money laundering and is ready to take tough action if there are breaches. Sources said that Monetary Authority of Singapore (MAS) officials have been asking private banks if they have heard any client concerns about the exchange of information mechanism. The MAS didn’t comment.
The finance ministry noted that Singapore would need to sign bilateral agreements before any automatic data sharing, and those deals would depend on partner countries having a “robust” legal framework to maintain information confidentiality and “confine its use to tax purposes”, a ministry spokeswoman said.
Seeking to recoup funds it first bled in the aftermath of former president Suharto’s government, Jakarta is looking to introduce a tax amnesty, but has given no timetable for this. “The idea is to first prepare the legal framework,” Suahasil Nazara, who heads the fiscal policy office, told Reuters.
The planned amnesty, private bankers say, is modelled on a successful but controversial Italian tax scheme that helped Rome recoup billions of euros unlawfully parked in Switzerland against the payment of a modest penalty.
This system, which was criticised for allowing tax evaders to come clean without too much pain, is a faster way to recover funds than wading through a myriad of tax and bank data.
India, too, is trying to turn up the heat on an estimated US$340 billion of undeclared wealth by its residents.
The Securities and Exchange Board of India (Sebi), the market watchdog, has asked international private banks to register their offshore units with it if they are soliciting business in India, a Reuters report revealed earlier this month.
If banks agree to register, they could be targeted by requests from Sebi to disclose client information. “These changes will certainly make things more complicated for wealth managers. (They) will have to factor in every high-net-worth client’s residence and domicile,” said Mark Wightman, a partner for wealth & asset management at EY Advisory.