Bank auditors under focus in scandal
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, the business minister, said it was “good that the authorities — the Business Authority, the police, and the Financial Supervisory Authority — are 100% 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 €200bn Estonian laundering saga that spans 2007 to 2015.
Ernst & Young is on the hook for its work auditing Danske’s accounts for 2014.
KPMG has been reported to police for its audit of the 2017 annual report of Kobenhavns Andelskasse.
Danish politicians agreed last month to include the freedom to ban accounting firms from doing business if they don’t do their jobs properly.
The dirty-money scandal that’s swept through the Nordic and Baltic regions has more recently also engulfed Swedbank, Sweden’s oldest bank and biggest mortgage lender.
According to Ernst & Young, its Danish unit has fully co-operated.
KPMG said it “reacted and drew attention to, among other things, procedural failures in connection with the area of money laundering, both to the management and the board. The Financial Supervisory Authority also received our reporting.”
