US warned M’sia of suspected gun-running Iranian bank

By Patrick Lee, Free Malaysia Today

PETALING JAYA: US attempts to shut down an Iranian bank in Malaysia suspected of gun-running were shoved aside, according to Internet whistleblower Wikileaks.

The US government had warned Bank Negara Malaysia that a foreign subsidiary of Bank Mellat known as First East Export Bank (FEEB) was involved in weapons proliferation.

While the secret document did not expressly mention if the bank’s activities involved funding for either a chemical or nuclear arsenal, the US was convinced that FEEB’s actions were suspect.

“Our information indicates Iran is now using Mellat for the same purpose (proliferation). FEEB could be next, potentially causing significant embarrassment to Malaysia,” US Ambassador James Keith said in a message to the US government.

(Proliferation is commonly referred to both nuclear and chemical weaponry.)

FEEB was established on Dec 18, 2008, and later received an offshore banking licence from the Labuan Offshore Financial Services Authority (LOFSA, now Labuan FSA) on Feb 16, 2009.

(According to its website, LOFSA was set up in 1996 to develop the Federal Territory of Labuan into an international business and financial centre.)

Concerned with Bank Mellat’s presence in Malaysia, a meeting was arranged by US diplomats on Sept 10, 2009 with Malaysian representatives from the banking and financial sector.

They included US economic counsellor Matthew J Matthews, Singapore Embassy Treasury Attache Seth Bleiweis, former Bank Negara deputy governor Zamani Abdul Ghani, Bank Negara’s legal director Jeremy Lee, LOFSA deputy governor Danial Mah Abdullah and a few others.

An important but unknown individual known as “xxxxxxxxxxxx” was also mentioned in the message.

No strong evidence

During the negotiations, it was revealed that the American representatives attempted to convince the Malaysians into cutting off its links with FEEB.

Bank Negara was warned that if it did not revoke FEEB’s licence, the US government would impose sanctions on the latter. Matthews then said that if Malaysia continued to support FEEB, it would seriously affect its reputation.

However, Lee argued that if Bank Negara were to do so, the Malaysian government could face a barrage of lawsuits from FEEB’s shareholders.