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DANSKE BANK

Government prepared to fire Danske Bank over money laundering scandal: minister

Being found guilty of money laundering would preclude Danske Bank from being responsible for carrying out state payments, Minister for Public Sector Innovation Sophie Løhde has said.

Government prepared to fire Danske Bank over money laundering scandal: minister
Minister for Public Sector Innovation Sophie Løhde at Wednesday's parliamentary consultation. Photo: Henning Bagger/Ritzau Scanpix

The government will no longer use the bank to make state payments if it is found guilty of money laundering, according to the minister.

Løhde was on Wednesday called to a parliamentary consultation over the state's contract with Danske Bank after reports that the bank, Denmark’s biggest lender, laundered vast amounts through its branch in Estonian capital Tallinn.

Investigators in Denmark, the United States, Brussels and London are looking into activity at the Estonian unit between 2007 and 2015.

Danske Bank has acknowledged that much of the approximately 200 billion euros that went through the branch during that period may need to be treated as suspicious in origin.

“We have inserted a clause in the contract that will cease the agreement with a bank if the bank is found guilty of laundering,” Løhde said.

“A final decision would naturally be dependent upon the nature of any verdict,” she added.

“But if a serious sentence for money laundering is given, my initial response would be that the state should withdraw from the contract,” the minister said.

Danske Bank has been responsible for state payments since October 2008 and was awarded a new contract in October, extending its right to transfer money on the state’s behalf until 2023.

The bank will earn just under 50 million kroner over a four-year period for the work.

No other bank submitted a bid for the government contract.

Løhde said the decision to renew the contract was entirely regular, and stressed that the Ministry of Finance’s Agency for Modernisation insisted on the clause enabling the state to withdraw on the contract should a money laundering verdict be reached.

“The decision was made to do this prior to the summer break, which I think is a sign of timely concern,” she said.

READ ALSO: Danske Bank admits 'huge task' to regain trust as customers flee

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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