Regulator blocks Danske Bank’s pick for chief executive after €200bn scandal
Danish authorities have blocked the appointment of a new chief executive at Danske Bank, piling more misery on the firm which is reeling from a €200bn (£176bn) money laundering scandal.
The Danish Financial Supervisory Authority (FSA) turned down the appointment as chief executive of the bank’s head of wealth management, Jacob Aarup-Andersen, because of lack of experience, Danske Bank said in a statement today.
The bank, which has branches in the UK as well as a Northern Irish note issuing licence, said it has withdrawn the application and will continue its search for a new chief executive.
Read more: Danske Bank faces US probe over €200bn money laundering scandal
Danske’s previous boss, Thomas Borgen, resigned last month after presiding over lax controls in the bank’s Estonian branch. The branch, which was added when Danske acquired Sampo Bank in 2007, let €200bn flow through suspicious accounts.
An investigation carried out by a law firm into the anti-money laundering controls found red flags on “almost all” of the customers in the bank’s non-resident accounts, referring in large part to Russian money.
The report found that employees of Danske Bank likely colluded with customers to avoid anti-money laundering controls.
Danske faces multiple separate probes, including a criminal investigation in Estonia and, more worryingly for investors, an investigation by the US Department of Justice, which has a track record of imposing large fines for money laundering offences.
The Danske board is “in dialogue with other potential candidates and will now continue the recruitment process in order to find the best possible person for the position,” said Ole Andersen, Danske’s chairman.
“The Board of Directors unanimously backed Jacob Aarup-Andersen as new CEO, knowing full well that longer experience in certain areas would have been desirable,” he said.
The rejected candidate said he is “proud and happy” with the “strong sign of recognition” from the board, but “noted” the FSA’s reasoning.
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