Management Accounting Assessment 2022

MANAGEMENT
ACCOUNTING 2

Memorandum
To the board of directors
Date- 10/09/2019
Case- Danske Bank strived to restore faith after the involvement in relation to damaging of
money laundering
Case
Stephen Engels has faced overhauling by the lenders of Danish to restore the trust after the
involvement while damaging the scandal of money laundering. Danske bank is under severe
investigation in US and many other nations for the payment totalled at 200 billion euros
through small Estonian branch. Danske has joined largest bank of Denmark where CEO
Jesper has found that Danish customers overcharged for the proposed investment product for
the attempt to maintain a gap between a thin lines in regaining trust from investors as well as
customers (Financial times, 2017). Danske`s shares started declining near to 65 percent where
money laundering scandal that began to remain unfold by rocking investor`s confidence and
the prompt the investigations in the world. On the ground of CEO`s role who has insufficient
experience, Danske undertakes to view the bank`s Swedish operations that finally take over
as a new head of the wealth management but the financial regulators are blocked (Moody
investor bank, 2017). Danske bank has been seeking restoration of control and trust in the
biggest banking system after the huge money laundering scandals, which lead to criminal
investigations in US, Estonia and France both for chairperson as well as chief executive. The
new executive with the board of directors that has been rejected by the regulators of Danish
who will move from wealth management in order to head towards the banking activities
(Moody investor bank, 2017). It is seen that there is a need to quickly create several resources
and finally increase the cost efficiency. During the scandal, CEO drew several criticism for

the analysts that can recommend board of directors to the shareholders during the scandal
(Financial times, 2017).
Weaknesses and challenges
With low experienced credits and challenges, it is seen that the bank has weakened
capitalisation, weakened profitability, and weakened refinancing. The bank will come up with
weakened following of operating environment and lack of proper legal and institutional
frameworks. The assessment dealt with large stock of loans because of financial crisis and the
high household debt. The financial sector will consider the wholesale funding needs that has
reduced and created susceptibility even in the adverse events. One of the major challenge
faced by Danske bank underwent full engagement with the criminal prosecution over the
allegation breaches related to crime laws financially. Many legal issues in relation to money
has to overview class action lawsuits in its results. The plaintiffs in civil cases have claimed
that the directors of bank hid scale to identify the nature of money laundering issues from the
marketplace. The drop cost is near to 10 billion euros to the investors. ADR allows the
investors as the same level of economic rights owning to underlying shares inclusive of
ability in order to deal and trade ADR in market. Danske bank has sold the shares to the
American brokers turning the deposition of shares with the US depository banks. The
institution will issue broker depository receipts to either sell or buy them, as it will receive
dividends from the underlying shares. The rate of ADR is directly linked to the valuation of
underlying shares. The main factors that have affected the value of the shares is the state of
the economy, new laws, regulations, new products, staff shortage, and new technology that
could affect the valuation of ADR as news of criminal investigations and regulatory will
affect the organisation (Murray, 2016).