The much-hyped phrase “Black Friday” has taken on an entirely new meaning for Norway’s biggest bank, DNB. Investors dumped DNB shares, and buyers got some deep discounts, after state officials launched an investigation into alleged money laundering involving the state-owned bank,
DNB’s shares fell 4 percent when the Oslo Stock Exchange opened Friday morning. By late afternoon they were trading just below NOK 155 per share, down 6.35 percent from Thursday’s close on heavy trading volume. Newspaper Dagens Næringsliv (DN) called it DNB’s largest one-day decline in more than three years. It all amounted to paper losses of around NOK 15 billion at the otherwise profitable bank in which the Norwegian government has a 34 percent stake.
Investors were reacting to confirmation Thursday evening, after the market had closed, from the white-collar crime unit of the Norwegian police (Økokrim) that they were indeed investigating DNB’s role in alleged corruption at the Icelandic fishing company Samherji. Samherji employees have allegedly used accounts at DNB to transfer large amounts of money to tax havens. The money allegedly landed in the hands of high-ranking government officials in Namibia as bribery payments made in return for fishing quotas in Namibian waters.
Arrests earlier this week
Namibia’s former justice minister and the head of the country’s state fisheries agency were arrested and jailed on corruption charges earlier this week. French wire service AFP reported from Namibia that they’re suspected of receiving as much as USD 10 million in bribes.
“We normally don’t issue an announcement when we launch an investigation,” Hedvig Moe, acting chief of Økokrim, told Norwegian Broadcasting (NRK), “but in this case DNB has gone along with the decision to release this information.” She didn’t want to go into further detail, but referred to recent media reports “that some payments have gone through DNB’s accounts that are tied to suspicions of corruption in Namibia. For us, there’s reason to examine whether anything has occurred that’s punishable under the law.”
DNB acted as the bank connection for the Icelandic firm Samherji during the period when it’s suspected of corruption in connection with its acquisition of fishing quotas from Nambian officials. Moe said it was “natural” for Økokrim to cooperate with authorities in other countries. Namibian authorities, for example, reportedly have asked for help from Norway.
Around 30,000 documents released via Wikileaks, including account statements and internal email at DNB, have indicated that the money transfers and alleged bribery extends back several years.
A bank spokesman insisted it was cooperating with all relevant authorities. “We have had a good dialogue with Økokrim all along,” insisted Even Westerveld of DNB to news bureau NTB. He added that the investigation “gives us the opportunity to share everything we know about the Samherji case, including confidential customer information.”
DNB has previously mostly refused to answer questions, based on its interpretation of laws pertaining to customer relations.
NRK reported earlier this week that it took DNB several years to freeze accounts now believed to be involved in bribery. It wasn’t until a warning from another connection at Bank of New York Mellon last year that DNB should act to freeze suspicious accounts.
A former Samherji employee who headed the Namibian operation and finally blew the whistle on alleged corruption told DN on Friday that he personally sent money out of Namibia to Samherji’s DNB accounts in Cyprus. He said that while the bank in Namibia asked questions, DNB never did. “I was the sender, and I never received any comments from Norway,” Johannes Stefansson told NRK. He resigned from Samherji in 2016 after nine years at the company and is now living at a secret address in Iceland for security reasons.
He said he views banks in Norway as “perfect” for “getting money into a good economy. Norway has a very good reputation overall.” DNB officials have said they fear they may have been “misused” in this case, while several Norwegian government officials, professors and top politicians are questioning DNB’s monitoring routines. They worry DNB has not had adequate control over the money flowing through it.