Danske Bank: Deminor has filed a motion to launch an independent investigation


On 4 February 2019, Deminor sent a letter to Danske Bank’s board of directors in order to seek the appointment of an independent investigator by the shareholders’ meeting to be held on 18 March 2019.

Between 2007 and 2015, Danske Bank, the largest financial institution in Denmark, actively participated in the largest money laundering scheme in Europe. More than EUR 200 billion of suspicious payments passed through its Estonian branch with the knowledge of the bank’s top management.

Not a single senior executive has been held accountable, no clawback has been initiated

Danske Bank did not only violate regulations. Its practices were an outright violation of generally accepted corporate governance, social and ethical principles. The Danish bank is now portrayed as a bank that did not shy away from supporting dishonest individuals in order to maximize its own short-term profits and its bankers’ bonuses.

As of today, not a single senior executive has been held accountable for the scandal. In addition, to the best of our knowledge, no clawback has been initiated so far by the bank against the senior executives’ (past) variable remuneration, while the remuneration policy at Danske Bank allows that mechanism.

An independent investigation is necessary to determine which senior executives are accountable for letting the bank perpetrate the largest money laundering scheme in history.  It is crucial not only to hold the responsible individuals accountable, but also to prevent future wrongdoing from happening. Any enhancements of internal controls (notwithstanding their inherent qualities as the case may be) would be meaningless if no (former) senior executive is unambiguously held accountable for his/her wrongdoings and the consequences for Danske Bank’s stakeholders.

The Bruun & Hjejle Report is biased and insufficient to answer shareholders’ concerns

Why a new investigation since Danske Bank already hired a law firm that produced a lengthy report?

The report issued by the law firm Bruun & Hjejle is insufficient to answer shareholders’ concerns. As a reminder, Bruun cleared the top management from any liability. The report did not paint an objective picture of the magnitude of the scandal and its impact on shareholders and stakeholders for the following reasons:

  • The investigation is grossly biased: Bruun & Hjejle has advised Danske Bank in the past and acknowledged that it was neither impartial nor independent in the present matter. Moreover, the investigation was launched and mandated by the board of directors, meaning that the persons instructing the investigation were (or should have been) the subjects of the very same investigation.
  • This report does not elaborate on how the decision on the accountability of all individuals involved was ultimately made by Bruun & Hjejle.
  • Bruun & Hjejle do not address the potential violation of director’s duties towards the shareholders, rather than towards the bank itself.

To ensure there is no risk of a bias, the party tasked with uncovering the details of the scandal should have no link with the facts under investigation and no stake in the outcome of the probe.

This independent investigation is an opportunity for the company and its management to obtain a clean sheet and regain the trust of shareholders. Without a clear understanding of what went wrong, it would be impossible for investors to assess whether proper corrective measures have been implemented.

Read more about the Danske Bank case: https://www.deminor.com/en/case/danske-bank/


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