Danske Bank elected the favoured candidate of its top shareholder as its new chairman on Friday to help steer the Danish lender through a multi-billion euro money laundering scandal.
Authorities in Denmark, Estonia, Britain and the United States are investigating payments totalling €200-billion ($303.3-billion) made through Danske Bank’s tiny Estonian branch between 2007 and 2015.
The threat of a heavy fine from the U.S. Department of Justice has sent Danske’s shares down almost 50 per cent since March, erasing around US$15-billion of market value and raising the prospect of legal action from investors.
The Maersk shipping tycoon family, the bank’s top shareholder with a 21-per-cent stake, ousted chairman Ole Andersen and called Friday’s shareholder meeting to nominate Karsten Dybvad, 62, and another board member.
There were more than 600 shareholders at the extraordinary general meeting (EGM) in Copenhagen on Friday which elected Mr. Dybvad to the board. The modified board of directors then elected Mr. Dybvad as the new chairman.
Outgoing chairman Mr. Andersen and other managers were criticized by several private shareholders at the meeting.
“I take my responsibility. Let’s just call it a firing, and I agree that a firing is the right thing,” Mr. Andersen said about his own departure from the bank.
Mr. Dybvad was chief executive of the Confederation of Danish Industry, one of the country’s most influential lobby groups, for the past eight years and before that had a long career as a government official working with ministers from both left and right of Danish politics, although his role did not involve oversight of banks.
“We hope and are confident that Karsten can contribute to the dialogue with authorities which probably will take up a lot of time the next couple of years,” said Robert Maersk Uggla, A.P. Moller Holding chief executive at the meeting.
Besides restoring Danske’s image, Mr. Dybvad is also tasked with finding a new chief executive to head the bank and ensure potential legal cases, not least in the United States, don’t drag attention away from day-to-day business.
“There is great task in handling the ongoing investigations in relation to the Estonia case in a way that can contribute to re-establishing confidence in Danske Bank,” said Claus Wiinblad, senior vice-president at Denmark’s largest investor, pension fund ATP.
Jesper Nielsen has taken on the CEO role on an interim basis since Thomas Borgen resigned in September.
The Maersk family’s investment firm A.P. Moller Holding, is usually a passive shareholder. The family controls shipping group A.P. Moller-Maersk.
“We make this move because we think that Danske’s board has not reacted swiftly enough to find a replacement for the current chairman,” said Robert Maersk Uggla, A.P. Moller Holding chief executive.
The move was welcomed by others at the meeting.
“We see this demonstration of active ownership as positive,” said Mikael Bak, chief executive at Danish Shareholders’ Association, a lobby group for private investors.
“We would have liked to see the large shareholders a little earlier, perhaps far earlier,” Mr. Bak added.
One private shareholder proposed from the rostrum that the remaining board members also step down.