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Financial Scandals Run Amok in Asia

Globally, the financial sector saw numerous failures from the US banking crisis to the downfall of Credit Suisse in Switzerland. takes a look at 2023’s top scandals in this region.

This year saw no shortage of negative headlines for the financial sector. US saw the failure of three local lenders, including Silicon Valley Bank (SVB), which resulted in central banking interventions. Switzerland saw the historic collapse of Credit Suisse and a government-brokered takeover by UBS. reviews this region’s top scandals in 2023.

Singapore: Record Laundering Case

In August, Singapore was hit with a historic money laundering scandal that resulted in a record S$2.8 billion ($2.1 billion) in assets seized from 10 suspects with Chinese origins. Numerous banks have been used by the suspects in some form including UBS, Deutsche Bank, Citi, CIMB, DBS and Bank of Singapore.

Interestingly, Singapore is not the only jurisdiction that has fallen victim to Chinese laundering headlines. Other nations this year including Australia, India, Italy and Spain have also seen probes and arrests related to Chinese nationals and syndicates allegedly laundering criminal proceeds from various sources including online scams and drug trafficking. 

Asia: AT1 Aftermath

Included in Credit Suisse’s collapse was a write-down of $17 billion in Additional Tier 1 bonds, which led to investor losses all over the world.

In Asia, investors from Hong Kong, Singapore, Indonesia and Japan are taking various measures, including planned legal action against the Swiss government. Claims range from arguments based on investment treaty protection rights to alleged violations of suitability standards.

China: Crackdown Continues

Since late 2021, Chinese authorities have launched a massive corruption crackdown in the country’s financial sector. The anti-graft drive continued in 2023 which saw the entanglement of several industry heavyweights.

This includes the arrest of ex-Bank of China chairman Liu Liange and ex-Everbright Group chairman Li Xiaopeng. Former China Life Insurance chairman Wang Bin, who was arrested in 2022, was sentenced to death in September 2023 with a two-year reprieve.

One of the most severe punishments for economic crimes was delivered in 2021 to ex-Huarong Asset Management chairman Lai Xiaomin. Lai was executed over charges of bribery, corruption and bigamy.

Malaysia: 1MDB Again

After what seemed like a done deal in the 1MDB saga, new conflicts are emerging from the Malaysian sovereign wealth fund scandal. Initially, Prime Minister Anwar Ibrahim voiced out issues regarding the settlement deal with Goldman Sachs, including the deal size and payment disagreements, and even spoke about the possibility of legal action. 

Thereafter, Goldman made the move to file a complaint in a London-based court in October against Malaysia for «violating its obligations to appropriately credit assets against the guarantee» provided by the bank. 

Separately, Roger Ng also returned to his home country of Malaysia where he is expected to assist authorities with the recovery of 1MDB assets. 

Hong Kong: JPEX

Just months after launching its new regulatory regime for digital assets, Hong Kong fell victim to a scandal with crypto exchange JPEX. This marked the largest alleged case of fraud in the city involving around HK$1.6 billion ($200 million) in assets.

Dozens of suspects have been arrested including renowned local celebrities.

Source: Finews