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Former management of Amagerbanken reported to fraud squad
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January 16th, 2013
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This article is more than 11 years old.
Bank officials accused of standing by while one of the nation’s largest banks failed
Former executives with Amagerbanken, which went belly up in the midst of the financial crisis in 2011, have been reported to the police by Finanstilsynet (FSA), the financial supervisory administration, reports DR News.
"We received a report naming 11 people from Amaberbanken’s previous management team,” Jens Madsen, the head of the fraud division said.
A total of eight people have been reported to the police, including former Amagerbanken executive director Jørgen Brændstrup, former chairman N. E. Nielsen and former board member Allan George Ottsen.
All of the bank’s board members at the time, including the current mayor of Tårnby council, Henry Ziminol (Socialdemokraterne), are among those charged in the report
The former executives are accused of not doing enough to prevent the bank from losing nearly 400 million kroner in 2009 and 2010 as a result of its speculation in Swiss francs.
In an attempt to minimise losses in connection with a failed property deal, the bank’s management extended a credit line of 1.5 billion kroner during last half of 2009 to developers Henrik Palm, Henrik Ørbekker and Olav Damkiær Classen hoping that the three would be able to turn a profit through speculation in Swiss francs.
The money was lent to the trio, even though the bank knew they were close to bankruptcy and would not be able to cover any losses. Even as it became obvious that increasing amounts of cash were disappearing, the bank officials allowed the risky transactions to continue.
Should police decide that there is enough evidence to continue the former Amagerbanken officials could be prosecuted under terms of the Financial Business Act that requires bankers to intervene to prevent losses associated with banking operations.
Lars Bo Langsted, a law professor at Aalborg University, commended the authorities for taking on the case.
“It is important that this a charge based on the Financial Business Act,” Langsted said. “The act is the main tool that we have to regulate bank behaviour and preventing similar activities in the future.”
The former management of EBH Bank, which cracked in 2008, is currently on trial in the Jutland town of Hjørring, and the FSA has also reported the management of Capinordic, which collapsed in 2010, for insider trading.
The management of Roskilde Bank, which went under in 2008, was reported to the fraud squad, but police chose to drop the case last year, citing a lack of evidence of any wrongdoing.
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