Money laundering scandal at Danske Bank spinning faster

COPANHAGEN

Denmark, a Nordic kingdom not often associated with financial shenanigans, is facing a massive scandal with banking champion Danske Bank accused of helping to launder $8.3 billion through an Estonian subsidiary.

Danske, Denmark’s biggest bank, had been in the crosshairs of investigators since Danish daily Berlingske last year claimed that it had been behind the laundering of around $3.9 billion of dirty money from a string of Eastern European countries.

But after receiving bank statements from 20 companies with accounts in Danske Bank’s Estonian branch between 2007 and 2015, the paper this week reported that the real figure was actually more than twice that.

“This gravely serious case will become much worse if the latest information is correct,” Denmark’s business minister Rasmus Jarlov said on his Twitter account.

“This casts a shadow of doubt over the entire financial sector,” Jarlov said, adding the Danish Financial Supervisory Authority is reviewing the information which appeared in Berlingske.

The watchdog is in contact with its Estonian counterpart to discuss possible actions.An audit in the spring concluded that there was no basis for raising criminal proceedings against the bank.     

“It is too soon to draw any conclusions about the extent of potential money laundering in Estonia,” Danske Bank’s head of group compliance, Anders Meinert Jorgensen, told AFP in an e-mail.     

“That is the reason why we have not ourselves published figures or commented on speculations about potential amounts,” he added.

The group has acknowledged that its control over the Estonian branch has not been good enough and launched its own investigation into the matter last year.

The results are expected in September.

“Until the investigations launched have been completed in September...it would be wrong to speculate any further,” Jorgensen said.Danske Bank’s share prices has fallen by over 25 percent over the past year on the Copenhagen Stock Exchange.     

Unexpectedly, Danske finds itself in the company of other major European banks that have been ensnared in massive laundering scandals in recent years including France’s BNP Paribas and Germany’s Deutsche Bank.