November 29, 2019 / 4:39 PM / 6 days ago

Norwegian bank DNB's shares drop 6% on Namibia investigation

OSLO (Reuters) - Shares of Norwegian bank DNB (DNB.OL) fell 6.4% on Friday after police launched an investigation into the handling of payments from an Icelandic fisheries business to Namibia.

FILE PHOTO: A view of DNB bank's local office in Riga, Latvia November 20, 2013. REUTERS/Ints Kalnins/File Photo

Norway’s white-collar crime unit late on Thursday said it would look into transactions made by fisheries company Samherji via DNB.

Samherji and DNB have both denied wrongdoing.

The investigation follows a report by Iceland’s public broadcaster this month that said the Icelandic company had made illicit payments worth millions of dollars to secure fishing quotas in Namibia.

The case has also led to the arrest of Namibia’s former justice minister and cast a shadow over the country’s ruling party as it contests an election.

On Friday a Namibian magistrate ruled that ex-justice minister Sakeus Shanghala and his fisheries ministry counterpart Bernardt Esau, arrested on Wednesday over the scandal along with four others, would spend the weekend in jail and have their bail application heard on Monday.

The six accused are charged with money laundering, fraud and corruptly using state office to obtain gratifications.

NORDIC LINK

Long regarded as only a minor risk issue for Nordic banks, economic crime has become a major concern over the past two years after money laundering scandals at Danske Bank (DANSKE.CO) and Swedbank (SWEDa.ST).

But while the shares of Danske and Swedbank have plunged since 2017, falling by 65% and 47% respectively, DNB has traded near record highs in recent months and is still only off about 11% from a 2019 peak hit in late October.

The investigation is still in an early phase, the police said.

The International Monetary Fund will examine efforts by banks and regulators to stop money laundering in Nordic and Baltic countries, Sweden’s central bank said on Thursday.

Reporting by Terje Solsvik; Additional reporting by Nyasha Nyaungwa in Windhoek; Editing by Jason Neely and David Goodman

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