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Danske Bank could lose witness status in French money laundering probe

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Danske Bank could lose witness status in French money laundering probe

Danske Bank A/S could be placed under investigation again in an ongoing probe by a French court over potential violations of money laundering laws from 2007 to 2014.

The Danish lender, whose status in the probe was changed by the French Tribunal de Grande Instance de Paris in January 2018 to that of an assisted witness, said Jan. 11 that it received a letter from a judge saying it could be placed under investigation again.

The letter also said the scope of the investigation had been expanded to include transactions involving roughly €28 million between 2007 and 2014.

Hermitage Capital Management Ltd. co-founder and CEO Bill Browder urged French authorities to probe the bank instead of treating it as an assisted witness, Reuters reported Jan. 11. Browder alleged that Danske provided incorrect information to French authorities with regards to the probe, but a spokesman for the bank said Danske did not believe that it did so.

Danske postponed a planned bond issuance after Browder said he plans to reveal new information on the money laundering case linked to the bank, Bloomberg News noted, citing Christoffer Møllenbach, the lender's head of treasury.

Danske recently begun marketing two benchmark-sized tranches of nonpreferred U.S. dollar-denominated notes that mature in three and five years, and is reportedly offering the five-year notes at 285 basis points above rates on U.S. treasury bonds, a source told Bloomberg. The bank plans to issue senior nonpreferred bonds amounting to 40 billion Danish kroner in 2019.

As of Jan. 10, US$1 was equivalent to 6.48 Danish kroner.