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8 Worst Corporate Scandals in Europe

These worst corporate scandals in Europe are just the tip of the iceberg as business scandals have been shaking the old world since early days. In fact, first recorded scandal of such kind in Europe happened in Greece, in the year 300 B.C. That’s when Greek merchant Hegestratos took out a considerable loan with no intention of paying it back. Back then, things worked similar to how they are working today. Hegestratos was obligated to repay the loan with interest or to have his cargo seized in case of his failure to do so. In his instance, it was a ship filled with a load of corn. He tried to sink his empty ship and keep both the loan and corn to himself, but things didn’t work that well for good old Hegestratos. He drowned after his intentions have been discovered by other members of his crew passengers while trying to escape their wrath. Well, it seems frauds didn’t exactly pay off even in ancient times.

Worst Corporate Scandals in Europe


But, let’s move fast forward to 20th and 21st century. After all, this is a period during which we’re witnessing ever increasing number of all kinds of scandals. Take these 8 worst corporate scandals in Japan, for instance. It isn’t any different in America or Europe as well. Where there’s money to be made, there’s always someone to skim some from the top. In order to somehow rate these scandals, we have decided to go with the worth of embezzled funds which have vanished in the process – at least for some of them. For other scandals, we have used the estimated damage – also in terms of losses. All in all, we were led by money as the most important indicator for arranging this list, although, sometimes money wasn’t the primary issue, and sometimes it was pretty hard to calculate the actual losses. Furthermore, ramifications of a given corporate scandal can have much larger impact than that of economic nature. Everyone will likely agree that when it comes to health, money is becoming the secondary issue. Well, obviously not for the instigators of these scandals, but for us, mere mortals…

The idea for this list of 8 worst corporate scandals in Europe came from Swick and Bloomberg, List25 among others. You’ll notice that most of these corporate scandals make a constant appearance which speaks for itself. You’ll also notice that banks have their way of creating corporate scandals on an almost regular basis, but they aren’t the only institutions that’ll appear here on this list. You’ll see corporations from different industry spheres all taking their share under the spotlights, although these spotlights weren’t exactly desired by them. Let’s see what this list has to offer.

7. Deutsche Bank Spying Scandal

This one’s both sordid and ridiculous at the same time. Political spying is to be expected at times, but corporate spying is something we just don’t see every day. Well, Germany’s largest bank has been hit with internal spying scandal in which bank’s corporate security department apparently spied on management board members, supervisory board members, investors, and shareholders. Spying was conducted between 2001 and 2007 when it was finally brought to public attention. DB had initially fired two of its officials responsible for security: Wolfram Schmitt and head of security Rafael Schenz. However, that was pretty much all they’ve done, and they could have done. For wrongful dismissals, DB had lost $6.7 million in lawsuits. Much more important, DB has lost 29% of its solvency the year following the scandal. That’s what happens when you violate your client’s trust and dabble in their private affairs. While those $6.7 million don’t look like much, negative effect on consumer confidence means that Deutsche Bank had lost much, much more money in the process. Some investors decided to pull back from the bank, and DB is still recovering from the scandal. DB isn’t the only German corporation that had gone through the process recently. Deutsche Telekom, Deutsche Bahn, and Lidl have had spying scandals of their own which make us question the moral ethics of business practice in Europe’s largest economy.

Worst Corporate Scandals in Europe


6. Eternit Asbestos Scandal

We now know how carcinogenic the asbestos is, but people knew that since as early as the seventies. The seventies and the eighties are exactly the periods during which some 3,000 workers of Italian Eternit factories contracted and died of asbestos-related diseases. This is why Swiss billionaire Stephan Schmidheiny, who was Eternit’s founder and his Belgian partner Baron Jean-Louis de Cartier, were sentenced to 18 and 16 years in prison respectively, back in 2012. Latter of the two died in 2013, but Schmidheiny is still alive and free, fined only €90 million in total. That’s because Italian court overruled the prison sentence in 2014 and let industrial magnate walk. To make things even more ironic, Schmidheiny is also a founder and current honorary president of WBCSD – World Business Council for Sustainable Development. This green-oriented association of some 200 of world’s largest companies has been built on shaky foundations, it would seem, and it will be as murky as the Italian judicial system for as long as Schmidheiny is its honorary president.

Worst Corporate Scandals in Europe

Syda Productions/

5. Barings Bank Scandal

Barings was established in 1762, used to be the oldest merchant bank in London, and it held an account belonging to the Queen among other things. When Nick Leeson gambled away £827 million back in 1995, it all came crushing down. The bank went bust and was subsequently acquired by ING for a pound. As for Leeson – he was sentenced to six and a half years in Singapore prison but was released after serving four. Not only that, but he received £7 million profit from the movie “Rogue Trader” which was based on his story. Crime certainly paid off for Leeson, but almost all of his colleagues have lost their jobs in the process. This is something he’ll have to live with.

Worst Corporate Scandals in Europe

Uber Images/

4. Société Générale Banking Scandal

Up next on this list of 7 worst corporate scandals in Europe is Société Générale Banking Scandal. Compared to Jérôme Kerviel who is the antagonist of our next scandal, Nick Leeson looks like a child. French trader has amounted a loss of €4.9 billion thanks to his actions – and all this during three days of January 2008. You might think that his peers at Société Générale Bank would be happy with his Guinness record trading loss, but they aren’t the ones for media exposure it would seem. Whether they liked it or not, Kerviel has successfully set a record “for the biggest loss ever recorded in the financial industry by a single trader‘. For his illegal actions, he was sentenced five years in prison and was required to repay the entire €4.9 billion he has lost. Needless to say, he didn’t really have that kind of money. Rarely anyone does.

Worst Corporate Scandals in Europe


3. Volkswagen Emissions Scandal

Although discovered in the US, scandal bounces back to the German city of Wolfsburg where Volkswagen is headquartered. The problem here is German automaker’s diesel engine emission rating which was systematically tweaked to fulfill the ever-increasing Environmental Protection Agency standards. Volkswagen’s engineers created a software which could detect when the cars and their diesel engines were being tested. This “defeat device” was then able to tweak the emissions helping the engine pass the tests. Volkswagen has later admitted that around 11 million cars worldwide feature this software. The process is still ongoing, but it’s evident that the Germans will have to pay a large sum in reparations. In fact, the company has estimated they’ll need to spend around $9.5 billion to recall all of their faulty vehicles and deal with additional consequences. You can safely bet it’ll take even more than that, and complete losses will probably never be established. Furthermore, their sales in North America will almost certainly take a heavy blow over the next few years, but their sales in Germany are soaring at the moment. It’s called patriotism.

Worst Corporate Scandals in Europe

2. Libor Rigging Scandal

Barclays and Royal Bank of Scotland were fined $6 billion for rigging the Libor interest rates (London Interbank Offered Rate), together with UBS, JP Morgan, Citigroup, and Bank of America. Deutsche Bank, RBS, and Société Générale were also affected by the scandal and have paid additional $4,5 billion – most of which came from DB (they really have some issues, don’t they). This is, arguably the biggest banking scandal that has shaken the world thus far because it cost the global economy at least $10 billion. But, how did banks manipulate the Libor? To put it simply, they have manipulated the interest rates of their own accord (often in communication with each other) instead of posting the actual rates. This gave the banks a healthy profit at the expense of traders. This went on from 2003 to 2012, and apart from aforementioned fines – all affected banks had to sack an insignificant number of their personnel responsible for Libor rigging. The question remains whether these fines are enough? After all, they only amount to a certain percentage of banks’ earnings. It seems that apart from being utterly non-ethical, this business model is certainly profitable.

Worst Corporate Scandals in Europe

1. Parmalat Scandal

The company that specializes in dairy products isn’t exactly what you’re expecting to find among largest European corporate scandals, but nonetheless, Parmalat is here, and it takes number 1 spot on our list of 7 worst corporate scandals in Europe. Italian company’s downfall started in 2003 when shareholders found out that $3.9 billion account in Bank of America was fake. As you can imagine, this started a chain reaction which eventually revealed a €14.3 billion black hole in Parmalat’s books. Hundreds of thousands of investors would never recover their money and Parmalat’s key men would be sentenced to prison as the aftermath. CFO Fausto Tonna would get two and a half years, while the owner Calisto Tanzi initially got 18 years, but was sentenced to additional 9 for Parmatour bankruptcy. This scandal hit the Parma Football Club as well, and they never managed to recover after losing their main sponsor. To this date, Parmalat bankruptcy remains the biggest European bankruptcy of all time.

Worst Corporate Scandals in Europe