SINGAPORE: Singapore on Friday strongly rejected a whistleblower's allegation that its banks facilitate massive tax evasion by a powerful family in neighbouring Malaysia's Sarawak state.

London-based campaign group Global Witness had triggered an uproar with a "sting" video in which a person posing as a foreign businessman is seen negotiating with purported relatives and associates of Chief Minister Tan Sri Taib Mahmud.

In one part of the clip, which went viral after it was posted on Tuesday, a man introduced as a Taib family lawyer called Singapore "the new Switzerland" with a "China Wall" protecting the identities of Malaysian depositors.

The 16-minute video alleged that Taib's relatives and associates get massive tracts of land at bargain prices from the state, sell companies owning the land titles to foreigners, and then take payment in Singapore to evade taxes.

"The allegation is simply false," said a joint statement by the Monetary Authority of Singapore and the Finance Ministry sent to AFP.

"Contrary to what was claimed in the video, Singapore has to date provided fully the information requested by Malaysia for tax purposes. The two countries have had a good working relationship on tax matters, and continue to build on this relationship to strengthen cooperation."

Spokesmen declined to give further details but the statement said Singapore "has designated a wide range of crimes as predicate offences to money laundering - including corruption, bribery and fraud."

Taib, 76, has headed resource-rich Sarawak on Borneo island as Chief Minister since 1981 and has for years faced — and denied — allegations of large-scale corruption and nepotism.

Taib, who could not be reached for comment, has not been convicted of any financial crime and has publicly dismissed the video — apparently taken with a hidden camera — as a possible attempt to smear him.

AFP could not independently corroborate Global Witness's account nor confirm the identities of the people shown in the video, which sparked a flood of online postings calling for Taib's arrest.

Malaysia is expected to call for general elections soon, with corruption as one of the hottest issues.

The Singapore press statement sent to AFP on Friday said the city-state's policies are in line with the recommendations of the Financial Action Task Force (FATF), a body formed by the Group of Seven (G-7) industrialised nations in 1989 to combat money laundering.

Both Singapore and Switzerland belong to the 36-member FATF along with the US and several European Union members.-- AFP