ZURICH, SWITZERLAND – Bank UBS is being accused of lack of due diligence by Swiss-based rainforest advocacy group Bruno Manser Fund (BMF). The charges are made in a filing with the Zurich public prosecutor and are linked to corruption in Malaysia in the forestry industry. A month earlier, Geneva Social Democrat Carlo Sommaruga filed a number of questions in the Swiss parliament about the bank’s relations with Musa Aman, chief minister of the Malaysian state of Sabah.
Sommaruga in early May 2012 also asked the federal government to consider freezing “assets held by Musa Aman and by other Malaysian potentates, such as Sarawak Chief Minister Taib Mahmud and his family members”, he says on his web site. The Swiss Justice Department has acknowledged that it provided legal assistance to law enforcement agencies in Hong Kong in March 2011 concerning Musa Aman.
The BMF says it has filed a complaint against UBS over the bank’s ties with Musa Aman, a Malaysian politician who controls logging in Sabah, a Malaysian state in North Borneo. It “accuses UBS of having breached its due diligence duties as defined by the Swiss Criminal Code and calls on Swiss authorities to take criminal action against UBS and those responsible for the bank’s relationship with Musa Aman. The Malaysian politician has been Chief Minister of Sabah since 2003 and is the brother of Malaysia’s Foreign Minister, Anifah Aman. He is being accused of having laundered over $90 million of corruption proceeds through a number of bank accounts with UBS in Hong Kong and Zurich. In April 2012, the Swiss Federal Office of Justice confirmed that Switzerland has given legal assistance to Hong Kong authorities over Musa’s ties with UBS.”
The “likely criminal proceedings” appear equally likely to grow beyond UBS and involve other banks, if the BMF documents hold up in court.
“UBS plays a key role in everything, given that many of the relevant transactions in this case passed through this bank, and its employee, Dennis Chua, a former client advisor with HSBC in Hong Kong, was actively involved” the BMF complaint states. “It is, however, evident that other financial institutions in Asia and possibly in Switzerland were involved in this mesh and indeed still are,” the organization notes in a statement.
Corruption is one of the main reasons for deforestation in Sabah and Sarawak, the two Malaysian states on the island of Borneo, according to the group, which has drawn a picture of a trail of laundered money. “Michael Chia, a close associate of the Sabah Chief Minister, organized large cash payments from timber companies with logging interests in Sabah to UBS bank accounts in Hong Kong. From the same accounts, payments have been made to Musa Aman’s sons in Australia and to Mohd Daud Tampokong, a senior forestry official from Sabah.”
Borneo’s rainforests are one of the world’s biodiversity centres and home to endangered species such as the orang utan, the clouded leopard and the proboscis monkey.
The Bruno Manser Fund argues that “In 2007, the Malaysian government committed to protect its rainforests by signing the ‘Heart of Borneo’ declaration but it has failed to take action against logging-related corruption by the Sabah and Sarawak state governments under their highly corrupt chief ministers, Musa Aman and Taib Mahmud.”
The fund in 2011 insisted that WWF should cut its ties to Ta Ann, a major firm involved in rainforest logging, because of close ties to the Taib family, blacklisted by the BMF for corruption. WWF has said it is studying the situation.