Swedbank chairman quits as scandal rips through top ranks

Bloomberg

A week after Swedbank AB fired its chief executive officer, the lender is parting ways with its chairman as a multibillion dollar money-laundering scandal forces top-level changes.
Lars Idermark has decided to leave Sweden’s oldest bank and biggest mortgage lender with immediate effect, Swedbank said in a statement. That follows a March 28 announcement that CEO Birgitte Bonnesen had been fired in the wake of the dirty money allegations.
Idermark is the latest top-level name in Nordic finance to have his career tainted by a growing laundering scandal that has shocked investors and the general public. A pattern is emerging in which Nordic banks, mostly via their Baltic operations, appear to have become conduits for vast sums of dirty money from the former Soviet Union trying to get into the West. The banks involved may now be facing hefty fines.
Swedbank is being investigated by the financial supervisory authorities of Sweden and Estonia, as well as authorities in the US In addition, Sweden’s Economic Crime Authority has initiated a criminal probe to look into allegations of gross fraud, amid concerns Swedbank may have misled the public about the severity of the laundering case.

‘BEST ALTERNATIVE’
Idermark said his decision to leave came amid the “recent strong debate about Swedbank and questions about the bank’s control of suspicious money laundering in the Baltics.” He said that intense scrutiny of Swedbank was interfering with his other job as CEO of a forest-owner association called Sodra. “Therefore, I have decided that the best alternative is to leave the position as chair of Swedbank with immediate effect.”
Idermark will be replaced by deputy chair Ulrika Francke, Swedbank said. But questions remain. Francke, like Idermark, sat on the board for many of the years during which the money laundering is alleged to have taken place.
The bank’s nomination committee, which consists of the largest shareholders and proposes new board members, said it plans to hold an extraordinary general meeting to elect a new chairman and strengthen the board. That meeting may take place next month with the nomination committee likely to target an external candidate for chairman, along with sweeping changes to the board, according to local newspaper Dagens Industri. Francke said by email that the board will hold an EGM once the nomination committee has concluded its work. “Until then, the board’s work continues, with big focus on restoring confidence in the bank,” she said.
Shares in the lender fell as much as 2 percent after the market opened in Stockholm, before pairing some losses.
“The trust in the bank has been seriously damaged,” Alecta, one of Swedbank’s biggest shareholders, said in an email. “It must be restored without delay.”
Swedbank is allegedly tied to the $230 billion Danske Bank A/S Estonian laundering scandal. Swedish broadcaster SVT has reported that the suspicious amounts that flowed through Swedbank’s non-resident accounts in Estonia may have exceeded $100 billion between 2010 and 2016 alone.