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Danske Bank hit by fresh money laundering claims


Copenhagen (AFP)

Shares in Denmark's largest lender Danske Bank plunged on the Copenhagen Stock Exchange Tuesday, hit by fresh allegations of money laundering involving Russia through its Estonian subsidiary.

The stock fall of over six percent cut the bank's market value by 1.6 billion euros (over $1.8 billion) within an hour of trading after the Financial Times reported that up to $30 billion from Russia had flowed through Danske's Estonian subsidiary in 2013 alone.

The $30 billion is more than Estonia's gross domestic product (GDP) that year at approximately $25 billion.

It was not clear how much of the amount was actually suspicious. The scandal lasted from 2007 to 2015, according to the Financial Times.

"We are not able to verify the specific information mentioned in the media," Danske Bank said in a statement.

The bank has been at the centre of a financial scandal since Danish daily Berlingske last year claimed that it had been involved in the laundering of around $3.9 billion of dirty money from several eastern European countries.

But after seeing bank statements dating back to 2007 and 2015 from 20 companies with accounts in Danske's Estonian branch, the paper reported in early July that the figure was actually more than twice that.

Denmark's state prosecutor for serious economic and international crime Morten Niels Jakobsen said in August that Danske Bank was being investigated and prosecutors would determine whether charges would be pressed.

Danske has launched an internal probe of its own regarding the allegations, and it plans to publish its findings before the end of the month.

It has also pledged to cooperate with the prosecutor's investigation.

"As we have previously communicated, it is clear that the problems related to the portfolio were significantly larger than we originally anticipated when the investigations began," the bank said.

Other major European banks have been ensnared in massive laundering scandals in recent years including France's BNP Paribas and Germany's Deutsche Bank.

- 'Very serious questions' -

The bank statements from the 20 companies with accounts at Danske Bank are linked to a fraud case exposed by the Russian lawyer Sergei Magnitsky.

He was jailed in Russia after he revealed the involvement of several high-ranking Russian officials in stealing massive tax payments from several companies, including the investment fund Hermitage Capital.

Magnitsky died in 2009 aged 37 after being held for a year and denied medical care.

Bill Browder, CEO of Hermitage Capital and Magnitsky's former client who was kicked out of Russia for exposing corruption at the largest state owned companies, said he has spent nine years tracking money laundering in the nation.

"Based on the size of these suspicious Russian transactions and the fact that Danske Bank had illicit flows going through their bank" for several years "without doing anything raises very serious questions about the quality of management at Danske," he told AFP in an email.

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