A money laundering scandal has a $14 billion Danish pension fund stopping future investment decisions regarding Danske Bank ($435 billion).
MP Pension, which holds about $89 million worth of Danske shares, will quarantine its investments in the bank until “more clarity is reached” on the money laundering investigation associated with its Estonian branch. The misconduct conflicts with the fund’s responsible investing policy, launched in 2015.
The bank has been struggling with the issue for years. Earlier this month, Rasmus Jarlov, Denmark’s new business minister, told Danish media that Danske had laundered up to $8.3 billion between 2007 and 2015—more than double what had been reported.
However, that wasn’t the final straw for MP. The pension plan followed Icelandic entrepreneur and co-founder of Danish start-up Unity Technologies David Helgason as he yanked his Danske investments last week.
The debacle may lead to a new investigation from Estonia’s financial watchdog, the Finantsinspektsioon.
Danske is currently investigating the issue internally and expects to reveal its findings in September. The S&P credit rating agency warned the bank’s A/A1 score could take a hit due to the problem.