Bank Negara Malaysia (BNM) has imposed a fine of RM50 million on i-Serve Online Mall and its affiliates for their activities between June 2018 and September 2021. The said activities were found to breach the Financial Services Act 2013 (FSA) and the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (Amla), the central bank reported today.
The e-commerce firm was penalized for accepting deposits from the public without a license and engaging in illegal deposit-taking activities. It paid the RM50 million ($1 = RMB4.6770) fine on November 16, 2022.
However, former Klang member of parliament (MP) Charles Santiago insisted that the issue is far from resolved. He urged BNM to provide more transparency regarding when it first detected these irregularities and how long it took to address them.
Santiago further argued that the fine was insignificant compared to the assets seized. He questioned what happened to the balance of the confiscated funds and whether depositors have been refunded. He also called on BNM to explain why no criminal prosecutions have taken place despite the breach of the FSA and Amla.
The former MP also raised concerns about the source of the deposits made with i-Serve. He questioned whether all depositors had paid their income tax on their deposits and whether the Inland Revenue Board (LHDN) had investigated each depositor to determine if their money came from legitimate sources. Santiago suggested that LHDN should confirm whether the depositors' money originated from Malaysia or overseas.
Santiago urged authorities to investigate each depositor for potential tax evasion. He hopes that BNM can provide answers to these questions and clarify if their probe into i-Serve extends beyond illegal deposit-taking activities.
In November 2021, BNM, along with several government agencies, conducted a raid on i-Serve and its related affiliates as part of an investigation into potential money laundering and related financial offenses. As a result, documents were seized from 22 locations in Kuala Lumpur and Selangor. This led to authorities freezing 45 accounts across seven banks and confiscating RM119 million.
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