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Sunday, May 19, 2024

DNB’s response ‘unsatisfactory’

Norwegian Trade Minister Monica Mæland is not satisfied with the answers she has received to a series of questions over how and why the country’s biggest bank, DNB, could make it possible for its customers to evade taxes. She’s demanding more information, and so is the Parliament’s disciplinary committee.

Trade Minister Monica Mæland, who's had to deal with a string of corruption cases lately, wasn't happy with DNB's answers to her questions about its involvement with tax havens. Now she is demanding more information. PHOTO: Nærings- og fiskeridepartementet
Trade Minister Monica Mæland, who’s had to deal with a string of corruption cases lately, wasn’t happy with DNB’s answers to her questions about its involvement with tax havens. Now she is demanding more information. PHOTO: Nærings- og fiskeridepartementet

The state is DNB’s largest single shareholder, with Mæland of the Conservative Party in charge of the state’s investment in the bank. Now she’s calling for DNB’s board of directors to evaluate an external investigation of DNB’s controversial operations in Luxembourg, after information provided from the bank’s own internal investigation proved to be inadequate.

“There are still unanswered questions in this case,” Mæland stated on Tuesday. “We therefore have several follow-up questions that we will send to DNB’s board leader today.”

DNB’s board leader Anne Carine Tanum appeared with DNB’s chief executive, Rune Bjerke, at a press conference on Monday and stated that she still had confidence in him. She also said she believed DNB had “good risk management and internal control,” but neither statement has yet been shared or supported by government and state authorities furious that DNB provided wealthy customers with the means to let assets and income go undeclared. Tanum, now under nearly as much pressure as Bjerke, noted that DNB has hired the Oslo law firm Hjort to conduct an external probe and report its findings to the board.

Board wasn’t active enough
Also critical of DNB’s operations and top management are several professors of business and economics in Norway, with some of them calling for Bjerke’s resignation. On Tuesday, Professor Morten Huse of the Norwegian Business School BI told Norwegian Broadcasting (NRK) that neither DNB’s board nor top managment led by Bjerke appeared to have done a good enough job of gaining an overview over the Luxembourg operations. Some have suggested they didn’t want to know what was going on at the Luxembourg operations and thus didn’t ask questions, so they could later honestly say they didn’t know about the use of tax havens. Bjerke denied that on Monday, but neither he nor Tanum are off the hook.

“I believe the board should be active (in operations),” Huse told NRK. Board members, in his opinion, should be prepared to do some work between board meetings: “They must set the agenda and understand where they are and what’s going on. If they find themselves in an area that’s under criticism, they must put more resources into it.” DNB’s board wasn’t informed of any problems in Luxembourg, but Huse doesn’t think either Tanum or Bjerke did enough to learn about the Luxembourg operations, despite several warnings from officials including former Finance Minister Kristin Halvorsen as early as 2007, right after Bjerke became CEO.

Bjerke said at Monday’s press conference that he and his management colleagues already have learned from mistakes made at DNB Luxembourg, and he doesn’t see any benefit of launching a “witchhunt” in the case. Others have responded that trying to find out who was responsible should not be branded a witchhunt.

Asked whether he feels he has control over DNB, Bjerke responded that “my most important job is to create a culture to ensure that guidelines are respected. I have to work with that every single day. It’s sad that rules were broken back in time, but I can’t do anything about that today.”

‘Scapegoat’ eager to talk, if he can
Among those emerging as what commentators were calling a possible “scapegoat” in the case is a former accountant at DNB Luxembourg from 2005 to 2007, Frederic Barzin, who has been given much of the blame by Bjerke. Barzin also worked as a consultant for DNB, reporting to the leader of DNB Luxembourg in both roles. DNB’s own internal probe concludes Barzin’s double roles weakened his independence as an accountant and auditor. Barzin told NRK on Tuesday, though, that he was keen to offer his side of the story, if he can be released from confidentiality agreements.

As the trouble at DNB, revealed as part of the “Panama Papers” disclosures of documents leaked from a law firm in Panama City, continued to grow, the Parliament’s disciplinary and investigatory committee made it clear on Tuesday that it wasn’t satisfied with DNB’s response either. Committee leader Martin Kolberg of the Labour Party said it would wait with opening a probe itself, though, until it gets more information from the ministry that Mæland leads.

“The questions we have are mostly about how the board (of DNB) has worked in carrying out its community responsibilities and followed up its own guidelines,” Mæland stated in a press release Tuesday. Mæland is most concerned with maintaining public confidence in DNB, because of the major role it plays in Norway. Berglund



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