Bank chief bidding for Abbeycould face criminal trial

26 August 2004

BARCELONA – Alfredo Saenz, the chief executive of Santander Central Hispano – the Spanish bank bidding for Abbey National – could face criminal charges in a Barcelona court later this year, it was reported Thursday.

The case revolves around over allegations made against three employees while he was head of Banesto bank 10 years ago.

According to reports in the Spanish press, Saenz could be jailed for up to two years if found guilty.

The spread of the news to the UK will be a further blow to SCH, which has spent the past month on a charm offensive trying to persuade UK investors it would be a suitable parent for Britain’s sixth-largest bank.

While SCH remains the only bidder so far, it is widely expected that other UK banks – led by HBOS – will make a move for Abbey once the Spanish bank publishes its offer document next month.

The case involving Saenz dates back more than a decade to when he was chairman of Banesto, another of Spain’s largest banks. Shortly after Saenz took up his post in 1994, Banesto brought charges against three executives, accusing them of stealing 600 million pesetas (GBP 2.4m) from the company.

The three directors were found guilty, but their verdict was overturned several years later. More than 10 years on, they have received an admission from a Barcelona judge that  Saenz and three others allegedly involved in bringing the “false complaint” have their own case to answer. The judge in the original case against the three executives has since been convicted for tax evasion and is now in jail.

It has also emerged that Emilio Botin, the group chairman, is set to make a court appearance in relation to a claim being brought against SCH by a group of shareholders led by Rafael Perez Escolar, a former banker who holds a long-standing grudge against Botin.

The case relates to the pay-offs to two executives who were ousted when Banco Santander merged with Banco Central Hispano.

The pair are reputed to have been awarded severance payments of EUR 108 million and EUR 50 million, which  Perez Escolar is arguing were excessive. The case is one of 24 brought by Mr Perez Escolar against Botin over the past decade.

A spokesman for SCH said yesterday: “We vigorously refute any allegations of wrongdoing and we will defend any charges if they come to court.”

[Copyright Expatica]

Subject: Spanish news