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DANSKE BANK

Danske Bank CEO resigns over money laundering scandal

The chief executive of Denmark's largest lender Danske Bank announced his resignation Wednesday as the institution said it was unable to determine how much money was laundered through its Estonian branch.

Danske Bank CEO resigns over money laundering scandal
Thomas F. Borgen. Photo: Anne Bæk/Ritzau Scanpix

The announcements came days after the Wall Street Journal reported that Danish investigators were probing transactions of up to $150 billion “from companies with ties to Russia and the former Soviet Union” that transited Danske Bank's Estonian branch between 2007 and 2015.

In early August, the state prosecutor's office for serious economic and international crime said the bank was being investigated and prosecutors would decide whether to press charges.

“It is clear that Danske Bank has failed to live up to its responsibility in the case of possible money laundering in Estonia,” chief executive Thomas F. Borgen said in a statement following the conclusion of the bank's internal probe.

“Even though the investigation conducted by the external law firm concludes that I have lived up to my legal obligations, I believe that it is best for all parties that I resign,” Borgen said.

The bank said it was “not able to provide an accurate estimate of the amount of suspicious transactions made by non-resident customers in Estonia during the period.”

Danske Bank said it would “donate the gross income from the customers in the period from 2007 to 2015, which is estimated at 1.5 billion kroner (201 million euros, $235 million), to an independent foundation which will be set up to support initiatives aimed at combating international financial crime, including money laundering, also in Denmark and Estonia.”

That sum will be booked in the third quarter. As a result, the bank revised downwards its earnings outlook for 2018, forecasting a net profit of 16-17 billion kroner instead of the previously anticipated 18 to 20 billion.

Shares in Danske Bank fell by more 3.75 percent in early trading on the Copenhagen stock exchange, in a flat market.

READ ALSO: U.S. authorities to scrutinise Danske Bank over money laundering scandal: report

DANSKE BANK

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

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