Danske fails to impress with dirty money offering
Investors, politicians cool to bank’s offer to give US$230mil to society
COPENHAGEN: Danske Bank A/S wants to give US$230mil back to society to remove profits obtained through its alleged role in an international money laundering scheme. But investors and politicians are making clear they don’t think that’s enough.
Danske hasn’t yet decided exactly to whom it will give the amount, which it calculated based on profits from its Estonian office, where well over US$8bil in dirty money from Russia, Azerbaijan and Moldova was laundered from 2007 to 2015, according to the latest reports.
Chief executive officer Thomas Borgen says “it’s very clear that we should not have and should not benefit from this.” The comments didn’t encounter any political resistance, but the government responded by saying the case is far from over.
“I’m glad that Danske Bank agrees with me that it’s wrong to keep money earned on laundering,” Business Minister Rasmus Jarlov said in a phone interview on Wednesday. “But it doesn’t mean that the authorities will end their investigations into Danske Bank.”
Jarlov has made clear that the government wants to confiscate any funds shown to have come from crime.
“We’re still working very hard on investigating what legal options there are in place against Danske Bank and the options there may be will be pursued,” the minister said.
The government is “reviewing the matter from top to bottom to find out what we can do.”
The head of the Danish parliament’s Business Committee, which oversees financial legislation together with the ministry, signaled he was unimpressed by Danske’s gesture.
“It’s up to Danske to do what it wants with its money,” Morten Bodskov, who is also a former justice minister, said in a phone interview. “But it’s not possible to buy special treatment or to pay to avoid a legal case in a country like Denmark.”
The Danish Financial Supervisory Authority is investigating the case and “it’s a fact that under Danish law, we can seize funds that were obtained through illegal means,” Bodskov said.
MP Pension, which has about US$20bil in assets under management, has put Danske on its blacklist, meaning it will stop buying the bank’s shares. Jens Munch Holst, a director at the fund, says Danske needs to “clean up” so that “nothing like this ever happens again.”
He also makes clear that the bank’s decision to return funds obtained through laun- dering isn’t enough to get it off that blacklist. Holst says he expects management to do the right thing. But if it doesn’t, then the fund would “feel compelled” to dump the entire US$85mil Danske stake it holds, he said.
Shares of Denmark’s biggest bank plunged on Wednesday, falling as much as 11% at one point.
The shadow of the laundering allegations, which have been mounting over the past 1½ years, has helped wipe about US$10bil off Danske’s market value so far this year.— Bloomberg