COPENHAGEN • Denmark’s government said Danske Bank A/S is potentially facing a fine as big as four billion kroner, or about US$630 million (RM2.61 billion), if found guilty for its role in one of Europe’s biggest money laundering scandals. The penalty would mark a Danish record for such cases.
What’s more, it doesn’t take into account potential fines that might be levied elsewhere.
Bloomberg Intelligence estimates Danske may have to pay more than €1 billion (RM4.97 billion) in total, while a Bloomberg News survey points to about US$800 million (RM3.31 billion), roughly matching the amount that Deutsche Bank AG and ING Groep NV paid for similar misdeeds.
Speculation about a fine follows a series of stunning announcements by Denmark’s biggest bank on Wednesday, including the resignation of CEO Thomas Borgen, and the admission that as much as US$234 billion flowed through its tiny Estonian unit between 2007 and 2015. Chairman Ole Andersen (picture) said that a “large” chunk of that amount may need to be treated as “suspicious” as Danske’s laundering scandal deepens.
Rasmus Jarlov, Denmark’s business minister and the man in charge of overseeing financial legislation in Danske’s home market, said the US$630 million estimate is based on an assumption that the bank’s profits from transactions tainted by laundering amount to about 1.5 billion kroner.
That’s what Danske says it earned at the Estonian unit at the centre of the case, and what the bank has earmarked for “donation” to society.
The minister has already made clear he thinks the evidence suggests that “illegal acts” were committed in connection with Danske’s laundering case. He’s also pointed out that Danske’s report is by no means the final word, as criminal investigations into the bank are ongoing in Denmark and Estonia.
The Danish Financial Supervisory Authority said on Wednesday it was “investigating” whether the latest revelations warrant new steps against Danske, after adding a five billion- krone capital penalty in May. Yesterday, the regulator made clear it won’t only rely on the bank’s internal report as a basis for its own investigation, and signalled it may take a much harsher view on management’s role in the case.
Meanwhile, Danish lawmakers agreed to add 700% to the existing limit on fines for money laundering, though the new rule won’t be made retroactive.
The money laundering case has jolted Danish politicians into action, with Parliament demonstrating a rare moment of unity in wanting to impose tougher laws on banks.