Danske Bank hit with new money laundering probe

Denmark's financial watchdog on Thursday said it would relaunch a money laundering probe into Danske Bank after the nation's largest lender said "a large part" of transactions totalling 200 billion euros ($235 billion) at its Estonian branch were "suspicious".

Danske Bank hit with new money laundering probe
Protestors outside Danske Bank's head office in Copenhagen on Thursday. Photo: Liselotte Sabroe/Ritzau Scanpix

At the centre of a financial scandal that has made headlines since last year, Danske Bank on Wednesday said it was unable to determine how much money was allegedly laundered through the branch between 2007 and 2015. 

“We are reopening the investigation into the bank that we closed in May,” Jesper Berg, head of Denmark's Financial Supervisory Authority (FSA), told broadcaster TV2 on Thursday, a day after Danske Bank's chief executive resigned over the scandal.

“When we receive new information, we can look at it and see if there is anything else we need to examine,” Berg added.

In May, the FSA denounced “serious shortcomings” at Danske Bank's Estonian branch and ordered it to raise its capital requirement by five billion kroner (670 million euros) due to increased risks.

The bank launched an internal probe into the 200 billion euros of transactions that had transited its Estonian branch through the accounts of 15,000 non-resident clients.

But it was unable to explain exactly where the money came from, saying only that 23 percent of the incoming funds were from Russia.

“A large part of the flow (transactions) is suspicious,” said Ole Spiermann, a partner in the external law firm that carried out a probe for Danske Bank.

In early August, the Danish state prosecutor's office for serious economic and international crime said the bank was being investigated over the alleged laundered money, most of which came from Russia and other former Soviet republics.

Danske Bank risks heavy fines.

READ ALSO: What you need to know about Danske Bank's mushrooming money laundering scandal


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