UBS Group boss Ralph Hamers faces money laundering inquiry linked to ING tenure

UBS Group AG’s new chief executive officer, Ralph Hamers, faces an investigation related to money laundering at ING Groep NV when he headed the Dutch bank.

A Dutch court ordered the public prosecutor to open a probe into Hamers’s role as CEO in ING Groep NV’s failure to comply with anti-money laundering rules, the banks said in separate statements on Wednesday. UBS said it has full confidence in the executive’s ability to lead the Swiss bank, Bloomberg reports.

The executive, who took over from Sergio Ermotti last month, made his first management change last week, giving Sabine Keller-Busse a new role and extending wealth management co-chief Iqbal Khan’s responsibilities.

ING avoided prosecution in 2018 by agreeing to a 775 million-euro (US$940 million) settlement and admitting it had failed to comply with anti money-laundering rules. However, financial activist Pieter Lakeman appealed the decision and sought charges against Hamers personally, leading the court to order the probe.

The court, based in The Hague, rejected a separate attempt to prosecute ING as a company over the compliance issues.

While the bank took responsibility for the shortcomings and improved its compliance efforts, “no settlement has been reached with the executive himself, nor has he taken public responsibility for his actions,” the court said, explaining its decision to order the investigation into Hamers. “Citizens must be able to see that such actions are also not accepted by the government,” it said.

Political pressure led to the resignation of Chief Financial Officer Koos Timmermans shortly after the settlement with prosecutors, but Hamers kept his role until he decided to move to UBS.

“We welcome the ruling regarding ING, but regret the decision to order the prosecution of our former CEO, which goes against the assessment of the public prosecutors that, based on the investigation, there are no grounds for a case against ING employees or former employees,” the bank said.

The public prosecutor said in 2018 that it didn’t find enough evidence for criminal accusations against individuals at ING, including the top management.

The issues at ING raised questions at the time Hamers was named as Ermotti’s successor. Shortly after the appointment was announced in February, UBS Chairman Axel Weber said he was satisfied with how Hamers was vetted by both the bank and the regulator.

The decision comes as UBS faces its own legal concerns. The bank is waiting for its appeal of a record 4.5 billion-euro penalty to be heard in France. The bank is accused of helping wealthy French clients stash undeclared funds in offshore accounts.