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Company: Santander Central Hispano

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Fraud trial for Spanish bank boss

Date Class
6th Oct 2004 Fraud Investigation
 
Details
A judge has ordered Spain's top banker to stand trial on charges of tax fraud.

Emilio Botin, chairman of Santander Central Hispano, Spain's largest bank, will be tried by the National Court, said Judge Teresa Palacios.

It is now up to a three-judge panel at the court to set a trial date for Mr Botin, who has been leading the Spanish bank's recent bid for the UK's Abbey.

The case dates back to the 1980s when the bank offered what prosecutors say were tax-evading investment products.

In her written order Judge Palacios said the Spanish treasury was cheated out of 85m euros ($105m; 58.6m) in tax revenue.

Three former executives of Santander Central Hispano (SCH) have also been ordered to stand trial, along with 28 clients who purchased the investment products, according to the judge's order.

The case was initially brought against SCH in the early 1990s, focussing on Mr Botin and four other senior managers. One of them has died since the alleged irregularities took place.

Mr Botin, SCH board member Rodrigo Echenique, and two former executives now face a maximum sentence of four years in jail, a court official said.

The Spanish bank has been in the news recently because it is trying to buy Britain's sixth-largest banking group Abbey.

SCH has said the deal, which would be the largest ever link-up in European retail banking, should be completed on 12 November.

The accused quartet must post a combined bond of 84.9m euros ($104.3m), Judge Teresa Palacios ruled, according to court documents.

The bonds have been ordered as a form of restitution, and will be returned if the men are cleared.

This is the second court case Mr Botin will have to face. In April the same judge ruled that he and two former board members would have to defend themselves against charges of misappropriation over severance payments to former executives.

One of the richest men in Spain, Mr Botin is a scion of the Spanish banking world - his family has been running Banco Santander since 1857.

After he took control from his father 18 years ago, Mr Botin built Santander into the 13th largest banking group in the world - with huge influence in Latin America as well as Europe.

In 1994 Santander acquired Banesto and merged with Banco Central Hispano in 1999.

The bank's board of governors has been standing behind Mr Botin, who has boosted the assets of the bank to 350bn euros ($416bn) through takeovers and mergers and the bank has enjoyed 15 consecutive years of profits.

Mr Botin is a large shareholder in the bank, but the traditional patriarchal practice of running a company in the manner he chose has become less popular in Spain.

 

 

 


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