KUALA LUMPUR, March 3 — Funds totalling more than RM99 million were deposited into the client account of Lewis & Co — a law firm named as allegedly having received cheques from former deputy prime minister Datuk Seri Ahmad Zahid Hamidi — over the span of two years from 2016 to 2018 without triggering red flags for suspicious transactions, a Maybank official’s court testimony today showed.
Not all of the funds totalling more than RM99 million were from cheque deposits, with the bank official also only confirming that funds were deposited into Lewis & Co’s client account based on account statements and without mentioning the source of these funds.
Maybank’s Dataran Maybank branch manager Leong Siew Kong, who will be 56 this year, was verifying details regarding the client account which Lewis & Co had opened at the bank branch.
A client account is typically used by law firms to hold money on trust for their clients.
Leong said the law firm had issued a letter of undertaking dated May 12, 2016 to support its application to open a client account at Maybank, where the law firm said it confirms and gives the assurance that it is aware of its clients’ identities and sources of funds as it is required to do to comply with Malaysia’s anti-money laundering laws.
Zahid’s lawyer Hisyam Teh Poh Teik then asked: “Subsequent to this letter, did your bank receive any letter from the lawyers to say now we are suspicious about the source of funds?”
“No,” Leong replied.
When asked by deputy public prosecutor Nur Aishah Maulat Ahmad Zakiuddin, Leong confirmed that he had said the law firm had identified the source of funds entering its client account based on its letter of undertaking to Maybank.
Nur Aishah: Only by this letter alone?
Leong: Yes, the bank’s requirement is this letter is sufficient.
When asked by deputy public prosecutor Ahmad Sazilee Abdul Khairi, Leong said that law firms have to provide such a letter of undertaking when seeking to open a bank account, noting that the bank will otherwise not allow the opening of accounts.
Leong agreed with Sazilee that such letters of undertaking were mere “formality” and a standard practice for banks.
Leong also confirmed that the bank would not know if the lawyers actually check the source of funds.
While confirming that there are “red flags” that will be triggered that would require a bank to inform Bank Negara Malaysia of suspicious transactions under local anti-money laundering laws, Leong said there is actually no fixed amount of funds involved that would trigger such red flags.
Leong also explained that transactions involving law firms’ accounts would typically not trigger red flags due to the nature of their account.
“For lawyers’ account, especially client account, normally it will not trigger because [they are] trustee for customer,” Leong said.
Sazilee: So in this case, it didn’t trigger anything?
Leong: Didn’t trigger.
Cheques and fixed deposits
Based on the transactions confirmed by Leong in court today, a total of RM99,532,364.25 were deposited via 129 transactions into Lewis & Co’s client account at Maybank during a period spanning May 2016 to April 2018.
The 129 transactions were made using various payment methods, including 113 cheques over RM90 million.
Leong also confirmed that Lewis & Co had in the period spanning May 27, 2016 to April 11, 2018 gave instructions to Maybank to transfer funds in its client account to a fixed deposit account, with the fixed deposit account enabling higher returns via higher interest rates.
Leong confirmed a total of 28 times when Maybank was instructed to make such placements for fixed deposits, albeit with one of these occasions involving a fixed deposit sum of RM2.1 million that was split up into RM1.8 million to be ploughed back in as a fresh fixed deposit and with the RM300,000 transferred back into the client account.
Based on the transactions that Leong confirmed, a total of RM66,578,348 or over RM66 million from Lewis & Co’s client account were used to make placements for fixed deposits. This tally does not include the RM1.8 million that was originally part of one of the placements.
Asked by Zahid’s lawyer Mohd Haziq Dhiyauddin Razali, Leong confirmed that all these placements for fixed deposits were done by Maybank at the law firm’s written instructions, further confirming that these not result in any losses to the client.
Cross-examined by Mohd Haziq, Leong confirmed that it is normal to place funds from a client account to a fixed deposit account, also confirming there was “nothing illegal” about such arrangements as the bank would have otherwise spotted it.
Leong is the 39th prosecution witness in Zahid’s trial, where the Umno president and former home minister is facing 47 charges involving alleged criminal breach of trust, bribery and money- laundering.
On the first day of trial, the prosecution had said it would prove the money-laundering charges against Zahid by showing that he had received approximately RM65 million worth of cheques which were then delivered to a lawyer from Lewis & Co.
The prosecution had said it would show these cheques were later deposited into the law firm’s client account, and that a substantial portion of these funds were then used to make placements for fixed deposit under the law firm’s name and that such funds were also used to buy two bungalow units worth RM5.9 million.
The prosecution had said it would provide proof in court to show that Zahid knew or had reason to believe that these funds that he had received were proceeds from unlawful activity.
The trial before High Court judge Collin Lawrence Sequerah is scheduled to resume this Friday.
* A previous version of this story contained an error which has since been corrected.
