Danske Bank’s CEO resigns over money laundering crisis
Thomas F. Borgen, CEO of Danske Bank, has stepped down in relation to the issue of €200 billion in possible money laundering in Estonia.
As reported last year, Denmark’s two largest banks, Danske Bank and Nordea, were involved in alleged anti-money laundering (AML) violations. (There are no comments yet on Nordea’s website about its case.)
At that time, more than DKK 7 billion ($1.1 billion) was transferred to accounts in the Danish banks. Accounts that belonged to “shady” drawer companies with addresses in tax havens like Seychelles and Panama. The transactions took place between 2011 and 2014.
After more recent investigations, it was found there were issues with Danske’s control and governance system at the Estonian branch from 2007 until 2015.
The figures went up as Danske explained that around €200 billion of payments had flowed through its Estonian branch from non-resident customers — from countries such as Russia, the UK and the British Virgin Islands.
According to the FT, an analysis of 6,200 of the riskiest customers — out of 15,000 non-resident clients in total — showed that the “vast majority have been found to be suspicious”.
Borgen was in charge of international banking including Estonia from 2009 to 2012 and became chief executive in 2013. He faced allegations that he ignored warning signs of trouble.
In his resignation letter, Borgen says: ”It is clear that Danske Bank has failed to live up to its responsibility in the case of possible money laundering in Estonia. 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.
“As the CEO, I have the management responsibility for the things that take place in the bank, and, of course, I take on this responsibility. It has been clear to me for some time that resigning would be the right thing to do, but I have held off the decision, because I have felt a responsibility for seeing the bank through this difficult period towards presentation of the investigations.”
Borgen will continue in his position until a new CEO has been appointed.