Swedbank Fires CEO Minutes Before Start Of Annual Investor Meeting; Shares Halted
Talk about bad timing.
Shares of troubled Swedish lender Swedbank were halted in Stockholm a little over an hour before the bank’s annual shareholder meeting was set to begin after sliding another 4% and dragging down the broader European banking sector, which led markets lower on Thursday.
Following initial reports that shareholders had been planning to confront CEO Birgitte Bonnesen at Thursday’s meeting, the bank’s board acquiesced to mounting investor fury and fired the CEO just minutes before the meeting was set to start over a snowballing €135 billion ($152 billion) money laundering scandal with ties to felonious former Trump campaign manager Paul Manafort and former Ukrainian President Viktor Yanukovich. The latest in a series of increasingly incriminating reports had been published by a Swedish news channel on Wednesday.
Before becoming CEO, Bonnesen had been in charge of the bank’s operations in the Baltics, where many of the suspicious transactions, many of which involved the bank’s dealings with Danske Bank’s Estonian branch, occurred.
The board said Bonnesen was fired as several of the bank’s major shareholders made clear that they would likely vote against her. CFO Anders Karlsson will temporarily fill in for Bonnesen, the board said. On Wednesday, Swedish police raided Swedbank over allegations of aggravated fraud. Following reports that the bank may have lied to US authorities over money laundering tied to the Panama Papers scandal, the FT reported that the US is investigating the bank over “a number of money laundering issues”, suggesting that Swedbank, Sweden’s oldest lender, could face potentially hundreds of millions of dollars in fines.
“The developments during the past days have created an enormous pressure for the bank. Therefore, the board has decided to dismiss Birgitte Bonnesen from her position,” said chairman Lars Idermark.
Johan Sidenmark, chief executive of Swedish pension fund AMF, justified the vote against Ms Bonnesen by saying: “Even if so far it is only a question of suspicions and nobody should be regarded as guilty until she or he is convicted, this is a case of such serious allegations that it would be irresponsible to [vote in favour of discharge] at today’s meeting.”
Swedbank shares were halted after three of the bank’s biggest shareholders, Folksam, Alecta and AMF, said they would vote against a proposal to absolve Bonnesen of liability for 2018, the FT reports.
The scandal has raised questions about whether Sweden’s banking and regulatory elite have been “too clubby” with one another. Shares of Swedbank have shed more than a quarter of their value since the bank’s involvement in a sweeping Baltic money laundering scandal was revealed in media reports. The scandal has ensnared several other Nordic and European lenders, as the allegations, which centered on Danish lender Danske Bank’s Estonian branch, have tarnished some of the region’s largest banks.