Danske Bank shares fall after new details of money laundering scandal revealed

Shares in Denmark’s Danske Bank fell on Tuesday morning following a report that over 190 billion kroner was laundered through the bank’s branch in Estonia.

Danske Bank shares fall after new details of money laundering scandal revealed
File photo: Thomas Lekfeldt/Ritzau Scanpix

A seven per cent fall in the bank’s share price was reported early on Tuesday, Ritzau reports.

The cost of a share in the bank has fallen 24 percent overall since the beginning of this year.

The Financial Times reported on Monday that as much as $30 billion of Russian and ex-Soviet money flowed through Danske Bank's Estonian branch in a single year. The Financial Times report is based on a draft report commissioned by Danske Bank and seen by the newspaper.

Danish newspaper Berlingske has previously reported 53 billion kroner to have been laundered through the bank.

Authorities in both Denmark and Estonia are currently conducting investigations into the issue.

The fall in share price reflects fears that Danske Bank will be hit with a significant fine and that CEO Thomas Borgen, who was in charge of international banking at the time the irregularities occurred, could be fired, Ritzau reports.

Danske Bank is due to publish two reports into the money-laundering scandal this month, FT writes. One report will be centred on the details of the suspicious transaction, while the second will be into the bank’s governance.

READ ALSO: Denmark announces probe against Danske Bank over money laundering


Danish police drop money laundering case against Danske Bank directors

Denmark’s economic crime unit SØIK has dropped potential charges for money laundering against three leading former directors of Danske Bank, Denmark’s largest bank, but investigation of the bank itself continues.

Danish police drop money laundering case against Danske Bank directors
File photo: Jacob Gronholt-Pedersen/Reuters/Ritzau Scanpix

The three directors, Thomas Borgen, Henrik Ramlau-Hansen and Lars Stensgaard Mørch were investigated in relation to a scandal involving large-scale money laundering at the Estonian division of the bank.

Each of the three confirmed to newspaper Børsen that charges have been dropped.

In a written statement to media, SØIK said it had not uncovered “evidence that any individual has shown negligence to such an extent that it can be characterised as gross” and that the law had therefore not been broken.

“For an individual to be convicted under money laundering laws, they must have committed gross negligence. In this case we have conducted a vert comprehensive and thorough investigation with a number of investigative steps,” acting head of SØIK Per Flig also said in the statement.

The bank itself is still under investigation for possible breach of money laundering laws, however, Flig noted.

READ ALSO: US files lawsuit against scandal-hit Danske Bank

No individuals now remain under suspicion in the investigation, meaning SØIK has dropped cases against all leading bank executive who were suspected by police in March 2019.

Around 1,500 billion kroner from foreign customers flowed through the Estonian division of Danske Bank between 2007 and 2015, an investigation found.

A large proportion of that money is considered to be suspicious. The scandal resulted in Borgen’s resignation as CEO and the bank closed its Estonian branch in 2019.

READ ALSO: More on the Danske Bank money laundering scandal