08/04/19

EU: Swedbank’s Chairman Quits Amid Money-Laundering Scandal.

As published on nytimes.com, Friday 5^th April, 2019.

 

A money-laundering scandal that has upended the world of Scandinavian finance ensnared another executive on Friday, when the chairman of Swedbank, one of Sweden’s largest lenders, resigned amid investigations into the activities of its subsidiaries in the Baltics.

The chairman, Lars Idermark, departed less than a week after the bank fired its chief executive, Birgitte Bonnesen, who had previously supervised Swedbank’s operations in the Baltic countries of Estonia, Lithuania and Latvia.

Mr. Idermark said in a statement that he could not deal with the money-laundering allegations while also performing his day job as chief executive of Sodra, a processor of forest products.

“Following recent strong debate about Swedbank and questions about the bank’s control of suspicious money laundering in the Baltics, I have concluded that the media attention is not compatible with my C.E.O. role at Sodra,” Mr. Idermark said, adding that he would leave his Swedbank role immediately.

Until recently, Scandinavian banks were regarded as some of Europe’s best managed and most profitable. But their reputation has been damaged by allegations against Danske Bank, which closed its operations in the Baltics this year based on evidence that subsidiaries there had for years helped Russian oligarchs and corrupt politicians to convert dirty money into seemingly clean dollars.

The New York Department of Financial Services has been looking into possible money laundering at Swedbank for at least a year, but the allegations burst into public view last month after a report by Swedish public television.

The same report also suggested that Swedbank had been a conduit for payments by former President Viktor F. Yanukovych of Ukraine to his erstwhile adviser Paul Manafort, the former Trump campaign chairman who has been convicted of tax evasion and bank fraud.

The action by the New York regulator is part of a larger inquiry stemming from the activities of Mossack Fonseca, a Panamanian-based law firm whose secretive efforts to help the superrich avoid taxes were exposed in a series of leaked documents known as the Panama Papers.

In February, the regulator sent Swedbank’s New York subsidiary a 10-page letter with an extensive list of questions about transactions involving Mr. Yanukovych and a roster of Russian businessmen, offshore companies and banks in Ukraine, Cyprus and other countries that have been considered money-laundering hubs.

Last week, officials from the Swedish Economic Crime Authority raided Swedbank’s headquarters in Stockholm and seized documents in connection with a related investigation.

Unnamed Swedbank employees are suspected of tipping off a select group of large investors that a scandal was about to break, a possible violation of insider-trading laws.

Sweden’s financial industry regulator, known as the Finansinspektionen, is also investigating.

Swedbank declined to comment on the investigations.