Danske Bank money laundering scandal: Bank appoints Jesper Nielsen as interim CEO

Danske
Bank sign is seen at the bank’s Estonian branch in Tallinn,
Estonia August 3, 2018.
REUTERS/Ints
Kalnins

• 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.