The week in news - December 7

Author: InnoXcell

December-07 2016

The belt continues to tighten on the Fat Leonard scandal that has plagued the United States Navy. The latest to fall foul of investigators is Paul Simpkins, a 62-year old civilian employee of the Navy who was arrested for his connection to the Fat Leonard Scandal. Simpkins received a six-year prison sentence, $50,000 fine and was ordered to pay more than $450,000 in restitution. Simpkins was convicted on bribery and conspiracy charges, which include the acceptance of cash payments, travel and prostitutes from Leonard Glenn Francis in exchange for his role in helping Francis to win contracts with the US Navy. To date, 16 people have been charged in relation to the investigations surrounding Glenn Marine Group and its owner, Leonard Glenn Francis.

The heads of South Korea’s conglomerate corporations have been called to court to provide testimony at the nation’s parliamentary hearing. The interviews were televised and live-broadcast by several news agencies, with representatives from chaebol’s including Hyundai and Samsung. Nine representatives were questioned, with the line of questioning focused on the large sums of money (into the tens of millions of dollars) given to Choi Soon-sil, close friend and confidant of President Park Geun-hye, who stands accused of intervention of state political affairs and of forcing chaebol donations. The chaebol’s have themselves been the subject of much scandal and debate, with Samsung’s exploding phone batteries, Lotte’s ongoing management struggles and corruption, and the closure of Hanjin Shipping, to name but a few.

The ongoing backlash following Indian Prime Minister Narendra Modi’s sudden demonetisation of the 500 and 1,000 rupee banknotes continues. The decision was aimed at ridding the nation of fraudulent banknotes, hindering tax evasion and the growth of illicit economies. However, according to Bloomberg, 82 per cent of the decommissioned currency that has been deposited in banks nationwide has been verified, and the unexpected turn of events show that estimates of fraudulent and ‘black money’ were perhaps far-reaching. Cash alternatives amid a chronic shortage seem to be proving little respite. Officials speculate that in order to meet the required production of one million point of sale units in 90 days, production will need to increase from the current 3,000 to 11,000 units per day. This, however, brings to light concerns over banks conducting KYC and due diligence investigations on such a large scale given the time constraints.

Italy’s referendum results have led Prime Minister Matteo Renzi to offer his resignation. The proposed reforms were rejected by 59.1% of voters on Monday. Renzi sought to create reforms, which would strip the power from the Senate and strengthen the central government. To many, the referendum was viewed not only as a chance to rebuke specific policies proposed but also to take a stance on anti-establishment politics; leading some to say that the vote has followed in the vein of the election of Donald Trump and Brexit. Fears on whether this will trigger a banking crisis in an already vulnerable financial landscape continue to grow, as does the wave of populism sweeping through the continent.

The Monetary Authority of Singapore (MAS) continues to bear down heavy-handed penalties, and the latest to suffer is Tim Leissner, a former banker with Goldman Sachs who was embroiled in the 1MDB scandal. In one of the largest penalties distributed against an individual, Leissner was banned from the securities industries in Singapore for 10 years. Leissner stands accused of issuing an unauthorised letter of credit and for falsifying information about the bank conducting due diligence on Low Taek Jho, the financier embroiled in the middle of the 1MDB scandal. MAS have also levied penalties against UBS and DBS in recent weeks, and have banned Falcon Private Bank and BSI SA from conducting business in Singapore.

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