Wealth Management

KPMG, EY reported to police amid Danish laundering probes


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Ernst & Young is on the hook for its work auditing Danske’s accounts for 2014, while KPMG has been reported to police for its audit of the 2017 annual report of Kobenhavns Andelskasse.

Sunday 14, April 2019

(Bloomberg) --Denmark has reported the local operations of Ernst & Young and KPMG to the police amid a widening crackdown on money laundering in the country.

EY is being investigated for failing to alert the authorities to red flags linked to the Danske Bank Estonian laundering case. KPMG was the auditor of Kobenhavns Andelskasse, a small local lender that was shut down last year amid concerns it was systematically used for money laundering.

Rasmus Jarlov, Demmark’s Business Minister, said, “It’s good that the authorities, the Business Authority as well as the police and the Financial Supervisory Authority are 100 per cent on top of this case which needs to be investigated all the way.”

The Danish Business Authority started its investigation into EY last year as the full scale of the Danske scandal became known. Denmark’s biggest bank is at the centre of a $230 billion Estonian laundering saga that spans the years 2007 to 2015. The financial watchdog has more recently warned that smaller lenders are also at risk of being targeted by launderers, as the biggest banks beef up their compliance efforts.

Denmark has made clear it wants to set some of Europe’s toughest standards in the fight against money laundering after the country’s reputation was tainted by the Danske Bank scandal. Lawmakers agreed last month to include in those new standards the freedom to ban accounting firms from doing business if they do not do their jobs properly.

The dirty-money scandal that is swept through the Nordic and Baltic regions has more recently also engulfed Swedbank, Sweden’s oldest bank and biggest mortgage lender. Swedbank had initially hired Ernst & Young to conduct a review of its suspicious transactions but dropped the firm amid public criticism due to the ongoing Danish investigation.

In a statement, the Danish Business Authority said it arrived at an assessment that EY, in connection with its audit of Danske Bank’s reports for 2014, was made aware of information meaning that EY ought to have conducted a closer investigation, and informed the Financial Intelligence Unit.”

In statement, Ernst & Young said that its Danish unit has fully collaborated with the Danish Business Authority since October 2018 and has made available all documents regarding our audit.

“EY Denmark has reported as required by the then applicable regulation and we will fully cooperate with the State Prosecutor,” it said.

TAGS : Ernst & Young, EY, Danish Business Authority, Danske Bank, KPMG

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