Bank of Maldives Ltd (BML) declared Tuesday that the bank could have stopped the illegal transactions between Maldives Marketing and Public Relations Corporation (MMPRC) and SOF Pvt Ltd, if the Financial Intelligence Unit (FIU) had taken the necessary action.
The main bank of Maldives is currently under accusation of being involved in the MMPRC scandal, the largest graft case in Maldives which saw the embezzlement of MVR 1.3 billion in state funds from the corporation via SOF, a private company.
Senior officials of BML were summoned to sit down with the parliamentary Committee on Public Finance on Tuesday, to answer to the bank's alleged involvement in the case.
During the meeting, BML acknowledged that the transactions took place via accounts opened at the bank, but maintained that BML had followed all the necessary procedures and regulations to deposit the cheques issued from MMPRC to SOF. Although the bank repeatedly asserted that it took no part in the corruption, the committee members rebutted the statement and posed several questions as to what steps BML took to halt the illegal transactions.
In response, BML's Deputy CEO Mohamed Shareef declared that the bank had followed regulations and reported suspicious transactions to FIU, an independent agency of Maldives Monetary Authority (MMA) tasked with receiving, analysing and disseminating information concerning money laundering and financing of terrorism. He noted that such transactions are to be reported to FIU as per the law.
According to Shareef, BML turned to FIU after SOF declined to respond to the bank's inquiries, regarding the disproportionate sums of money deposited in the company's accounts compared to the scale of SOF's business.
Noting that BML had also frozen SOF's accounts, Shareef stated that the bank received instructions from FIU's then head Athif Shakoor and MMA's then Deputy Governor Neeza Imad to release the accounts.
Shareef added that the bank was not aware that FIU looked into case filed by BML and ruled that the transactions were not suspicious, until the Anti-Corruption Commission (ACC) released its report on the MMPRC corruption scandal.
"Had we known that the transactions were closed, we could have taken further steps", he said.
BML also refuted ACC's allegations that the bank had deposited MMPRC's cheques to the SOF accounts in violation of the former's board resolution.
They stated that, in the case of endorsed cheques, the bank only looks into the information of the issuer and receiver. Additionally, if a cheque were submitted for deposit by a third-party, the bank inspects whether the third-party was mentioned in the endorsement on the back of the cheque.
The bank further highlighted that cheques could not be endorsed only if 'not negotiable' were written at the time of cross-checking, which the MMPRC-endorsed cheques to SOF were not.
During the meeting, the bank repeatedly asserted that it took no part in the MMPRC corruption, and had followed through with all of its legal responsibilities.
However, members of the Public Finance Committee did not accept BML's stance, with several MPs criticising the bank's procedures regarding cheque endorsement as unprofessional and lacking in security. The lawmakers maintained that BML had to take certain responsibility as over MVR 1.3 billion in state funds were embezzled through the main bank of Maldives.