Troubles are mounting for a Swiss private bank associated with 1Malaysia Development Berhad (1MDB) - a  Malaysian state investment fund that is undergoing a money laundering probe.

According to an article published by The Straits Times, Swiss private bank BSI, the employer of private banker Yak Yew Chee, who is caught up in the probe, has been sued over claims it did not pay headhunting fees.

Executive search firm Mancano and Associates has filed a lawsuit in the High Court last August seeking $7.1 million in fees from BSI for helping it recruit 23 staff in 2009.

The article stated Yak, who later handled the controversial 1MDB account at BSI, was one of the 23 that Mancano said it had referred to the Swiss bank.

"He was working as the market head for Malaysia for another private bank, RBS Coutts, at that time, according to a research report reproduced in the court papers," the article stated.

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It added the headhunter's fees are 28% of an employee's first-year remuneration package.

For Yak, a senior banker with a base salary of $500,000, the headhunter fee totalled to about $336,000, said Mancano in the court papers.

This comprised of a joining fee of $350,000 and target bonus of $350,000.

The Straits Times added, however, that BSI claimed there was no binding agreement between the search firm and the bank.

"And there was 'no accepted practice and/or common understanding' between Mr Hanspeter Brunner, BSI's chief executive, and Mr Michael Mancano, the search firm's managing director. The efforts Mr Mancano had claimed to have put in were a precursor to a possible subsequent engagement by the bank, BSI has said in the court papers," the article stated.

In 2013, BSI rejected the headhunter's bill for $38 million for its search work, which included the recruitment of the 23 bankers. Despite the lack of a binding pact, the bank had paid Mancano $250,000 at the end of 2009 for related administrative costs, but no more payment was outstanding, BSI has said.

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