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Top BSP Financial Executives Face Removal

The largest lender in the Pacific, Bank South Pacific (BSP) Financial Group, has been ordered to remove senior managers. It follows breaches of anti-money laundering laws in Papua New Guinea,
14 Jul 2021 11:00
Top BSP Financial Executives Face Removal

The largest lender in the Pacific, Bank South Pacific (BSP) Financial Group, has been ordered to remove senior managers.

It follows breaches of anti-money laundering laws in Papua New Guinea, and puts further pressure on Commonwealth Bank of Australia (CBA) and National Australia Bank (NAB) to cut ties with the troubled institution.

BSP, which listed on the Australian Securities Exchange in May and trades as the Bank of South Pacific, was found by the Papua New Guinea regulator to have committed dozens of violations of anti-money laundering laws, running to thousands of individual breaches.

An enforceable undertaking is being sought with the bank to “remove and replace certain executive management staff.”

This is understood to include chief executive Robin Fleming.

BSP will also be required to hire an external auditor to ensure it complies with anti-money laundering laws in the future.

The Financial Analysis and Supervision Unit (FASU), which sits within the PNG central bank, said it could have brought criminal and civil charges against BSP given the seriousness of its non-compliance.

Instead, it issued the bank with a “formal warning”, saying this was the “least punitive” response.

These regulatory measures seek to address the systemic culture of non-compliance within BSP … and are deemed necessary to protecting the integrity of PNG’s financial system,” the FASU said.

The sanctions will be problematic for CBA and NAB, which provide so-called “correspondent” banking services to BSP in Australia.

As part of this relationship, CBA and NAB are the gateway for BSP’s clients to transfer money in and out of Australia.

 

Feedback: maraia.vula@fiijisun.com.fj



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