Danske Bank's $235 billion money laundering scandal isn't going away

  • Danske Bank has appointed Jesper Nielsen to be interim CEO after relieving outgoing boss Thomas Borgen of his duties.
  • Borgen was previously expected to stay in his role until a permanent replacement was found.
  • The CEO change comes as the bank is embroiled in a $235 billion money laundering scandal surrounding activities centered on its Estonian branch between 2007 and 2015.

Danske Bank has appointed a new interim CEO to steer the lender through its $235 billion money-laundering scandal after relieving the previous CEO Thomas Borgen of his duties.

49-year-old Jesper Nielsen, who is the head of Danish banking at Danske, will become CEO on an interim basis, but is not a contender to be the full-time boss, the bank said.

"Jesper Nielsen will continue to perform his duties as Head of Banking DK and is not a candidate for the permanent CEO position," Danske Bank said in a statement.

Borgen, who announced his resignation around two weeks ago, has now been "relieved of his duties," Danske Bank said. He was previously expected to stay as CEO until a permanent replacement was found.

Nielsen's appointment as interim CEO comes as Hermes EOS, an influential advisor to company shareholders across Europe said that Danske Bank's board should explore suing senior executives over the scandal, which saw the bank's Estonian branch used for suspicious transactions over a period of eight years between 2007 and 2015.

There is currently no suggestion of wrongdoing by anyone at the bank.

"The board needs to assess whether management has breached any of its duties and could be liable to the company, just as Siemens did," Hans Hirt, head of Hermes EOS, said in an interview with the Financial Times. "They need to test whether anyone should have done anything differently."

In 2008, Siemens, the German conglomerate, sued 11 former management board executives over their alleged role a major bribery scandal.

"The liability claims [and] lawsuits Siemens brought against management board members were groundbreaking," Hirt told the FT.

The investigation into suspicious transactions at Danske Bank's Estonian branch centers on so-called nonresident transactions — effectively transactions done by people not based in Estonia but using the bank's facilities there.

It said it had identified about 10,000 customers who fit the profile of nonresidents, 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, emphasize that just because a customer had "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 nonresident characteristics have also been identified.

In total, Danske Bank says, these 15,000 customers undertook about 9.5 million payments, with the total value of the money flowing about 200 billion euros, or $234 billion.

This is a subscriber-only story. To read the full article, simply click here to claim your deal and get access to all exclusive Business Insider PRIME content.

Contenu Sponsorisé

Les meilleures astuces d'entrepreneurs pour gagner du temps