Aivar Rehe, who was the head of Danske Bank Estonia during the years of money laundering, finally commented on the scandal that hit the bank, saying he holds personal responsibility, but thought that Danske's anti-money laundering measures were sufficient at that time.
Head of Danske Estonia Breaks Silence: of course I feel responsible
Postimees was able to interview Aivar Rehe, the former head of Danske Estonia, who has avoided media and public since the money laundering scandal broke in 2017. Rehe was the bank's head in the years when Danske moved 200 billion euros of dubious non-residents' money. Despite the ongoing criminal proceedings against the bank, Rehe still considers that Danske Estonia’s internal controls were adequate.
Can you explain to what extent were you aware of how money of non-resident clients was moved at Danske?
I worked at Danske Bank and ran it for a decade. In that sense, we catered to non-resident clients for over 20 years.
Do you believe accusations of money laundering against Danske are fair, or is it simply a case of different anti-money laundering rules back then?
I believe we should let the proper authorities find the correct answers. It is very difficult and inappropriate for me to comment on where things stand today.
Suspicions concern the private banking department and Juri Kidjajev. How much were you up to speed with the department’s work? Who gave them directions?
They were a part of the bank’s units. I’m an ordinary citizen, and I have only read about the incident. We’ll know what it was about once the investigation reaches a conclusion.
They stand suspected of money laundering and accepting bribes. Did that come as a surprise?
I don’t know. Let us allow the proper authorities to get to the bottom of this matter as is customary in the conditions of rule of law. There will be a solution in the end. We do not know what it is today.
Absolutely; however, the proper organs, such as the financial inspectorate and the money laundering data bureau have said Danske Bank gave them false information.
Let us… Let us allow them… I cannot comment. I really can’t.
You were CEO?
But I cannot comment on it. The sentence you have put to me. I cannot comment on it.
Do you believe Danske’s conformity control and internal audit were up to their tasks at the time?
I think so. I have commented and expressed my position in this matter clearly.
Still, there are suspicions of money laundering in the air. In terms of Danske Estonia’s…
Let us allow these processes that have been launched to run their course. We will have a result then, and the truth.
While that is true, we already know some things. For example, that assets belonging to employees of the private banking department have been seized, because it is suspected they gained personal benefits.
I cannot comment on that. I’m not part of the process, unfortunately.
As far as you know, did private banking employees gain anything from…
Not to my knowledge, no.
Have you gained anything?
Did Danske headquarters manage the work of the Estonian branch and how thoroughly?
We were part of the same group. A part of the bank; it is just daily work organization.
Did Danske headquarters give you any particular guidelines in terms of which clients to concentrate on?
That is part of banking. It is difficult for me to illustrate like this.
Do you feel responsible? How has it…
I do. Naturally. I spent 10 years running that bank, and they were all my people. All 500 of them. Of course.
You have hardly spoken to the media and the public. Can you explain?
Why should I, in a situation where investigations are ongoing. Let them conclude these processes, which is also when I will learn the contents of the investigation.
Have you been questioned by the prosecution?
Do you believe suspicions will be brought against you?
I cannot say. It is not up to me.
Reading the news, looking at how far the Danske money laundering scandal has gone and its effects. How do you comment? What do you feel when you read this news?
Not good, obviously.
As CEO, you really had no idea what was going on?
I was doing my job. We followed the rules. We had processes in place. It was banking work.
Again, the financial inspectorate and the data bureau maintain you gave them false information.
I cannot comment on that. I really cannot.
Do you feel there was no money laundering at Danske Bank?
I have said as much. I just finished. I cannot comment.
What next? How could Estonia improve its reputation when it comes to banking?
Gradually. I do not know the solutions they’ll propose. It is to be believed legislation will be amended, and they will distance themselves from clients Danske distanced itself from. It will improve step by step.
Coming back to the matter at hand. It seems strange when you say you followed the rules in a situation where we know that €200 billion of shady assets of non-resident clients…
I cannot comment on that sum.
Nevertheless, your subordinates stand suspected of having taken a cut in exchange for not running checks on clients…
I know nothing about that. I cannot say. That question needs to be put to someone else, unfortunately.
How rigorous were Danske Bank’s anti-money laundering rules at the time?
I believe they were sufficient. We were under supervision. It was not one-off activity, efforts were persistent. It was supervised by the watchdogs and the Bank of Estonia. In that sense, everything was transparent.
Can you describe the work of the private banking department at the time? How did they find clients? What kind of clients did they find? What were the limitations?
It was everyday work. I cannot… I have not been present there. It was just one unit. I cannot comment on these matters. I believe other people will know how to answer that question rather well.
However, you were CEO, and the unit answered directly to you.
But I cannot tell you about the specifics.
What was your priority? What kind of clients did you cater to?
A bank pursues its owner’s goals. The latter are client-oriented banking and profit.
Did Danske headquarters approve of you taking on Russian and non-resident clients?
If we worked together for a decade, of course, it was a part of our strategy.
You never suspected your background checks might be insufficient?
I believe that appropriate organs both inside and outside the bank did their job the best they knew how.
I mean you personally, as head of the bank. You never suspected that perhaps your checks are not thorough enough?
I believe our checks were sufficient.
While it is clear today that they weren’t.
I think so. I think so. If you ask for my opinion, I believe they were enough.
Does that mean you feel Danske is being wronged?
Life will tell. Time heals all wounds.
What are your plans?
I believe that first I will have to walk around and explain why I came here. And then I will see what will become of me in Estonian economy and business.
I’m sure it has been difficult.
It hasn’t been easy.
Danske's money laundering is being investigated in five countries
Between 2007 and 2015, Danske Estonia branched out 200 billion euros of dubious money from non-residents. Aivar Rehe headed Danske in 2008–2015. In 2006-2007 Rehe was headed by Sampo Bank.
Danske Bank's head Thomas Borgen resigned as a result of Danske's money laundering scandal, and in many parts of the European Union, more attention has been paid to control mechanisms in the financial sector. The money laundering case is currently being investigated by the authorities in Denmark, Brussels, the United Kingdom, Germany and the United States, and large bank fines can be expected. In November 2017, criminal proceedings were initiated against the Estonian branch of the bank in Estonia. To date, there have been suspicions of ten former Danske employees suspected of large-scale money laundering. One person has been suspected of taking a bribe.