Malaysia Sukuk, Tax Scrutiny, Bitcoin Arrest: Compliance

Bumitama Agri Ltd. is joining Indonesian oil-palm planters selling sukuk in Malaysia to take advantage of the nation’s tax breaks and to tap its record Shariah-compliant banking assets.

The company set up a 2 billion ringgit ($599 million), 15-year Islamic bond program for investment and refinancing, according to a Jan. 21 stock exchange filing. Singapore-listed Golden Agri-Resources Ltd., which has operations in Indonesia, was the last producer of the commodity to sell ringgit-denominated sukuk in July.

Malaysia, whose Shariah-compliant banking assets more than doubled in the past five years to 543 billion ringgit, provides tax incentives for agricultural bonds as part of an effort to reinforce its position as a global Islamic hub.

To encourage the issuance of agricultural-based sukuk, Prime Minister Najib Razak said in his September budget speech that taxes on expenses and stamp duties on such debt would be waived for four years through 2015. The securities pay returns on assets to comply with the Koran’s ban on interest.

For more, click here and click here.

Compliance Action

Google Among Companies Examined by EU Regulators Over Taxation

Google Inc. and other companies are being examined over taxation issues, European Union Competition Commissioner Joaquin Almunia told the French senate yesterday.

The EU has said it is quizzing Ireland, Luxembourg and the Netherlands on whether taxation for some companies gives them an unfair advantage.

Almunia said he’s close to making a decision on Google’s proposal to settle an unrelated antitrust probe over alleged discrimination in its search results. He’s also probing possible abuse over excluding competitors from its Android operating system.

With European governments struggling to increase revenue and reduce deficits, company taxes have come under intense scrutiny. The Group of 20 nations in September endorsed the Organization for Economic Cooperation and Development’s blueprint for cracking down on tax-avoiding strategies used by technology companies.

Jefferies Agrees to Pay $25 Million in RMBS Trading Probe

Jefferies Group LLC, the investment bank owned by Leucadia National Corp., agreed to pay $25 million to settle U.S. criminal and civil probes of suspected abuses in the trading of mortgage-backed securities after the financial crisis.

The deal includes a non-prosecution agreement with the U.S. Attorney’s Office in Connecticut, Jefferies said yesterday in a regulatory filing. The company will pay $11 million to counterparties harmed in certain trades, $10 million to the U.S. Attorney’s Office and $4 million to resolve a parallel investigation by the Securities and Exchange Commission, subject to the agency’s final approval.

The largest global banks lost billions of dollars on mortgage-backed debt during the financial crisis.

New York-based Jefferies said the investigation “arose from a matter that came to light in late 2011, at which time we terminated a mortgage-backed securities trader who was then indicted” in January of last year. Spokesman Richard Khaleel said the company “cooperated extensively” with investigators.

Spokesmen for the SEC and the U.S. Attorney’s Office declined to comment.

Leucadia acquired Jefferies last year.


Bitcoin Foundation’s Shrem Charged as Silk Road Case Expands

Charlie Shrem, vice chairman of the Bitcoin Foundation, was arrested Jan. 26 and charged by federal prosecutors in New York with conspiring to launder more than $1 million in the virtual currency.

Shrem, 24, who was also chief executive officer of BitInstant, a Bitcoin exchange company, denied the charges through his lawyer. He was freed on a $1 million bond.

Bitcoin was introduced in 2008 by a programmer or group of programmers under the name Satoshi Nakamoto. The digital currency has no central issuing authority.

The case is U.S. v. Faiella, 14-00164, U.S. District Court, Southern District of New York (Manhattan).

For more, click here.


JPMorgan-Madoff Case Won’t Be Last Big One, Preet Bharara Says

Manhattan U.S. Attorney Preet Bharara said an agreement requiring JPMorgan Chase & Co. to pay $2.6 billion to resolve criminal and civil allegations that it failed to stop Bernard Madoff’s Ponzi scheme isn’t “the last big” money-laundering case his office will bring.

In a speech Jan. 27 to the Association of Certified Anti-Money Laundering Specialists in New York, Bharara said his office decided to prosecute JPMorgan because the bank and its predecessors for years “ignored red flags” and allowed suspicious transactions to occur in Madoff’s account.

“The Bank Secrecy Act is not merely a suggestion, and it has to be taken seriously,” Bharara said, according to a transcript.

Joseph Evangelisti, a spokesman for JPMorgan, declined to comment on Bharara’s speech.

Before it's here, it's on the Bloomberg Terminal.