RM50.39 mil in fines issued by Bank Negara to nine companies last year

KUALA LUMPUR – Bank Negara Malaysia (BNM) fined nine companies a total of RM50.39 million last year for violating several laws, including the Financial Services Act (FSA) 2013 and the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act (Amla) 2001. 

The bulk of the compounds were issued to e-commerce firm i-Serve Online Mall Sdn Bhd and six of its affiliates on October 19, 2022, for accepting deposits without a licence under Section 137(1) of the FSA and money laundering under Section 4(1) of Amla. 

BNM said the compound totalling RM50 million was issued with the written consent of the public prosecutor based on representation and submission from all parties concerned. 

The six other entities are i-Serve Technology and Vacations Sdn Bhd, QA Smart Partnership PLT, QA Elite Partnership PLT, QA Premium Partnership PLT, MM2217 PLT, and Valuewise PLT. 

“BNM’s investigations revealed that between June 2018 and September 2021, the respective entities had accepted deposits from the public and had consequently engaged directly in transactions that involved proceeds of illegal deposit-taking activities. 

“This was undertaken through schemes where monies were accepted from the public on terms under which the monies would be repaid in full, in breach of the FSA.” 

BNM added that in accordance with its governance and approved frameworks, the total compound amount was determined by considering factors such as the severity of offences committed as well as all aggravating and mitigating factors. 

Noting that the entities had paid the total amount of compound on November 16, 2022, BNM also said i-Serve Group has been instructed to ensure that it does not operate any “scheme or a semblance of a scheme” that accepts deposits from the public. 

In November 2021, it was reported that a raid conducted by BNM and several government agencies on the premises of i-Serve Online Mall and its related affiliates resulted in the seizure of RM119 million, documents and the freezing of 45 bank accounts in seven banks. 

Meanwhile, MPI Generali Insurans Bhd was imposed an Administrative Monetary Penalty (AMP) of RM260,000 on December 29, 2022, for non-compliance with the FSA and the Anti-Money Laundering, Countering Financing of Terrorism and Targeted Financial Sanctions for Financial Institutions. 

This came after the company reported to the bank the onboarding of a sanctioned person due to the delay in the company’s real-time screening of its customers against the Domestic and United Nations Security Council Resolution List. 

“The AMP amount was determined by considering relevant aggravating and mitigating factors, which include assessment of MPI Generali Insurans’ controls, first-time non-compliance of a similar nature by (the company) and actions taken to address the breaches. 

“Additionally, BNM had also directed the company to undertake a comprehensive review of its sanction screening processes, and the company has since addressed the supervisory concerns satisfactorily,” BNM said in a separate statement. 

MPI Generali Insurans settled the fine on January 6 this year. 

Besides that, on April 12, 2022, BNM had issued an AMP of RM134,000 on Mandiri International Sdn Bhd for violating the Money Services Business Act (MBSA) 2011 and the Anti-Money Laundering and Counter Financing of Terrorism – Money Services Business (Sector 3). 

This is according to another BNM statement, also released today.

BNM said that during an on-site examination, it was discovered that a number of Mandiri International’s customers had conducted remittance transactions on behalf of third parties, with further examinations revealing that the company had failed to identify and verify the beneficial owners for the remittance transactions. 

Mandiri International had paid the imposed AMP on April 7 this year. – September 1, 2023