Spain court clears telecom boss of insider trading

18th July 2009, Comments 0 comments

A Spanish court cleared the chairman of telecoms giant Telefonica of insider trading in shares of a tobacco company he headed a decade ago, court documents released Friday showed.

Madrid - A Spanish court cleared the chairman of telecoms giant Telefonica of insider trading in shares of a tobacco company he headed a decade ago, court documents released Friday showed.

Prosecutors had accused the chairman, Cesar Alierta, of illegally trading shares in Spanish cigarette maker Tabacalera in 1997 and 1998. The court case against him got underway in April.

He bought shares in the firm just before a tobacco price increase and the announcement of the acquisition by the firm of US cigar maker Havatampa caused them to rise in value.

A panel of judges at a Madrid regional court cleared him on the grounds that Spain's five-year statute of limitations had passed since the date of the alleged offence. Alierta's nephew Luis Placer was also cleared.

Prosecutors said Alierta earned around EUR 1.8 million (USD 2.5 million) through insider trading and sought a jail term of four-and-a-half years for the 64-year-old.

Alierta became Telefonica chairman in 2000. Under his leadership, the former state monopoly has increased its presence in Latin America and expanded to Britain with the takeover in 2006 of O2, Britain's biggest mobile phone company by customers.

A Madrid court dismissed the case in 2005 on the grounds that too much time had passed since the alleged violations but Spain's supreme court reopened it two years later.

Shares in Telefonica closed up 0.76 percent at EUR 16.47 on Thursday, outperforming a 0.44 percent gain by Spain's Ibex-35 leading share index.

AFP / Expatica

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