1MDB
A construction worker talks on the phone in front of a 1Malaysia Development Berhad billboard at the Tun Razak Exchange development in Kuala Lumpur, Malaysia, Feb. 3, 2016. REUTERS/Olivia Harris/File Photo

Malaysian state fund 1Malaysia Development Berhad (1MDB) said Wednesday that it has made full payment of a fine imposed on it by the country's central bank. The 1MDB fund, set up by Malaysian Prime Minister Najib Razak, has a debt of over $12 million and faces allegations of mismanagement and corruption.

1MDB was previously given until May 30 to pay Bank Negara Malaysia's (BNM) compound for failing to repatriate the money it had stored abroad. Last month, BNM issued a letter of administrative compound to the fund for failing to comply with directives issued under the Financial Services Act 2013.

"1MDB confirms that it has today made payment, in full, of the compound, in compliance with the decision of BNM," the fund reportedly said in a statement.

BNM's newly appointed Gov. Muhammad Ibrahim said at a news conference earlier this month that the fund needed to restructure its debts so the bank decided not to impose a deadline on it. The compound issued to 1MDB marked the end of BNM’s investigation into the state-investment arm which has been plagued by controversy, Ibrahim reportedly said.

1MDB has been at the center of money laundering and corruption allegations since last July, when hundreds of millions of dollars were tracked to Najib's personal bank accounts. A July 2015 report by the Wall Street Journal first brought the allegations to light. The report claimed that investigators traced the money originating from an account at Falcon Private Bank in Singapore to accounts in Malaysia.

On Tuesday, the central bank of Singapore ordered Swiss bank BSI SA’s local branch to shut down amid an investigation into the 1MDB scandal.

“The Monetary Authority of Singapore announced today that it has served BSI Bank Limited (BSI Bank) notice of intention to withdraw its status as a merchant bank in Singapore for serious breaches of anti-money laundering requirements, poor management oversight of the bank’s operations, and gross misconduct by some of the bank’s staff,” the regulator said in the statement.

RELATED STORIES