Danske Bank CEO Thomas Borgen has announced that he will resign once a replacement for him has been found. This decision comes as a result of a scandal in which money from Russia and the former Soviet Union was laundered through the bank’s Estonian branch, BBC reports.
“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,” he said. “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.”
The bank’s internal investigation showed that Borgen did not fail to meet his obligations to Danske Bank. He will retain the position until a replacement is found for him. The bank did not specify how long this would take.
In 2014, an Estonian financial audit discovered that the bank was “systematically violating risk control procedures”: the branch was apparently not always aware whose money it was transferring through its accounts, or where the funds originated.
In February 2018, the Danish newspaper Berlinske and the UK’s The Guardian reported that the Estonian branch of Danske Bank may have laundered money belonging to “a relative of Putin” and persons connected to the FSB. At the time, the Russian president’s press secretary said that the matter did not concern the Kremlin.
In September 2018, the Financial Times wrote with reference to an independent investigation that $30 billion from Russia and the former Soviet Union had been laundered through Danske Bank’s Estonian branch in the space of a single year.
The management of Danske Bank will now have to find out who was aware of the huge volumes of funds passing through its small Estonian branch.