Bank Negara Malaysia Imposes RM50 Million Penalty on I-Serve Group for Unlicensed Deposits and Money Laundering

Bank Negara Malaysia has imposed a substantial RM50 million penalty on the I-Serve Group for unlawfully accepting deposits and engaging in money laundering activities, with the fine distributed among seven entities. The penalty underscores the regulator’s commitment to maintaining financial sector integrity.

1 September 2023 – In a significant regulatory development, Bank Negara Malaysia (BNM) has taken decisive action by imposing a collective penalty of RM50 million on a group of entities collectively referred to as the I-Serve Group. This move, carried out with the consent of the Public Prosecutor, was executed under the authority vested in BNM through section 253 of the Financial Services Act (FSA) and section 92 of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLATFAPUAA).

The penalty distribution among the entities within the I-Serve Group is as follows:

  1. i-Serve Online Mall Sdn. Bhd.: RM12.5 million
  2. i-Serve Technology and Vacations Sdn. Bhd.: RM12.5 million
  3. QA Smart Partnership PLT: RM5 million
  4. QA Elite Partnership PLT: RM5 million
  5. QA Premium Partnership PLT: RM5 million
  6. MM2217 PLT: RM5 million
  7. Valuewise PLT: RM5 million

The decision to levy this substantial fine stems from a joint enforcement effort, initiated on suspicions of various offenses committed by these entities. BNM’s investigation, which spanned from June 2018 to September 2021, uncovered that these entities had unlawfully accepted deposits from the public and subsequently engaged in transactions involving the illicit proceeds from these unlicensed deposit-taking activities. These activities operated through schemes that promised full repayment of the deposited monies, thus contravening the FSA.

The determination of the RM50 million compound was made meticulously, factoring in the severity of the offenses committed and a comprehensive analysis of all aggravating and mitigating circumstances.

As a significant development, on November 16, 2022, the entities promptly settled the full RM50 million compound imposed by BNM. Additionally, the I-Serve Group has been issued strict directives to cease any operation resembling schemes that accept deposits from the public in direct violation of section 137(1) of the FSA.

Author: Terry KS

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