Spain's most powerful banker to face fraud trial

6th October 2004, Comments 0 comments

6 October 2004, MADRID - Emilio Botin, chairman of Spain's largest bank Banco Santander Central Hispano (SCH), is to face trial on allegations of misappropriating funds, judicial sources said on Wednesday.

6 October 2004

MADRID - Emilio Botin, chairman of Spain's largest bank Banco Santander Central Hispano (SCH), is to face trial on allegations of misappropriating funds, judicial sources said on Wednesday.

The sources, who quoted High Court judge Teresa Palacios, said the private prosecution case would go ahead at a date to be determined after Palacios had rejected prosecution service advice to shelve the case.

Botin and his former colleagues have been charged with allegedly helping customers commit tax fraud in the late 1980s, as well as with falsifying documents for allegedly not giving the authorities the correct names of loan assignment beneficiaries.

The case was first brought against SCH in 1992, targeting Botin and four other senior managers, one of whom has died since the alleged irregularities took place.

SCH has been in the headlines in recent months because it is trying to buy British bank Abbey National for EUR 13 billion (GBP 8.9 billion,  USD16 billion) in what would be the largest ever link-up in European retail banking.

Only three weeks ago the European Commission approved the proposed takeover, saying that the move "raises no competition concerns since the two banks presently operate mostly in different countries."

EU competition commissioner Mario Monti has described the pending linkup as "a contribution to the objective of the Commission to have a more integrated financial services market."

SCH, which says it will seek a London listing in the light of its Abbey bid is now waging a publicity campaign in Britain to woo British investors unconvinced of the merits of holding Spanish paper, given that SCH shares account for the majority of the funding for the bid.

Botin and his family dominate the SCH board despite his family holding only a 2.8 percent stake, leading to questions over the corporate governance of the institution.

Botins brother left the board earlier this year but was replaced by his son Javier. Another son, Emilio, is also on the board, as is a daughter.

The allegations of misappropriation come in the wake of large payoffs given to former directors, while Botin and the former directors also face allegations of tax evasion. 

One payoff to former director Jose Maria Amusategui comprised pension ayments worth a reported EUR five million (USD 6 million) a year.

SCH has also been criticised for its luxurious new headquarters on the outskirts of Madrid.
 
[Copyright EFE with Expatica]

Subject: Spanish news

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