DANSKE IN CENTRE OF SCANDAL

Denmark’s biggest bank accused of helping launder US$8.3b via Estonian subsidiary

DENMARK, a Nordic kingdom not often associated with financial shenanigans, is facing a massive scandal with banking champion Danske Bank accused of helping launder US$8.3 billion (RM33.5 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 US$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 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,” said Denmark’s business minister Rasmus Jarlov on Twitter.

“This casts a shadow of doubt over the entire financial sector,” said Jarlov, adding the Danish Financial Supervisory Authority was 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,” said Danske Bank head of group compliance Anders Jorgensen.

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.

Danske Bank’s share prices has fallen by over 25 per cent 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.

The bank statements from 20 companies at Danske Bank are linked to a fraud case exposed by the Russian lawyer Sergei Magnitsky, who was jailed for revealing high-ranking Russian officials involvement in stealing massive tax payments from several companies, including the investment fund Hermitage Capital.