Danske Bank CEO resigns over Estonian money laundering scandal

Thomas
Borgen
Thomson
Reuters

• CEO of Denmark’s largest bank steps down over Estonian
  money laundering scandal.
• Thomas Borgen resigned after an investigation into the
  scandal which could have impacted €200 billion ($234 billion)
  of transactions.
• Danske Bank has so far identified 6,200 customers who
  may have been involved in suspicious activity, undertaken via
  its Estonian branch.

Thomas Borgen has resigned as the CEO of Denmark’s largest
bank, Danske Bank, after a major money laundering scandal centred
around its Estonian operation.

Danske Bank, which has total assets of around €475 billion ($556
billion),
on Wednesday released the initial findings of an internal
investigation into activities in Estonia, saying that a
“series of major deficiencies” had allowed the Estonian branch of
the bank to be used for “suspicious transactions” in the
period between 2007 and 2015.

Borgen, who had been at the bank’s helm since 2013, said in a
statement that while the investigation found no legal wrongdoing
from him, he believed the best course of action was to stand
down.

“It is clear that Danske Bank has failed to live up to its
responsibility in the case of possible money laundering in
Estonia,” he said.

“I deeply regret this. Even though the investigation conducted by
the external law firm concludes that I have lived up to my legal
obligations, I believe that it is best for all parties that I
resign.”

Danske Bank’s investigation into suspicious transactions at the
Estonian branch centres around so-called “non-resident”
transactions — effectively transactions done by people not based
in Estonia but using the bank’s facilities there.

It said that it has so far identified around 10,000
customers who fit the profile of non-residents, with 6,200
of those fitting what the bank called “the most risk indicators.”
Of these customers, Danske Bank said, the “vast majority have
been found to be suspicious.”

It did, however, emphasise that just because a customer
“has been found to have suspicious characteristics does not mean
that there is a basis for considering all payments in which the
customer in question was involved to be suspicious.”

As well as the initial 10,000 customers, a further 5,000
customers with “non-resident characteristics” have also been
identified.

In total, Danske Bank says, these 15,000 customers
undertook around 9.5 million payments, with the total value
of the money flowing around €200 billion ($234
billion). 

“The Bank has clearly failed to live up to its
responsibility in this matter,” Danske Bank’s chairman, Ole
Andersen said.

“This is disappointing and unacceptable and we offer our
apologies to all of our stakeholders — not least our customers,
investors, employees and society in general. We acknowledge that
we have a task ahead of us in regaining their trust.”