Santander chief to stand trial in tax evasion case

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The Independent Online

Emilio Botin, the chairman of Santander Central Hispano, which is in the process of an £8.6bn takeover of Abbey National, has been ordered to stand trial on charges that he helped clients to evade tax.

Emilio Botin, the chairman of Santander Central Hispano, which is in the process of an £8.6bn takeover of Abbey National, has been ordered to stand trial on charges that he helped clients to evade tax.

Mr Botin, 70, and three former managers of Spain's largest bank, will be tried on charges of falsifying documents and violating tax laws, according to an order issued by Judge Teresa Palacios at the National Court in Madrid. She decided the trial should go ahead despite being advised by the state attorney that the charges, brought by an investor group, should be dropped. Mr Botin and the bank have always denied wrongdoing.

Bail for Mr Botin and the three former executives has been set at €85m (£59m).

The judge's decision adds to the legal woes of the Santander chairman, who is also defending himself against misappropriation charges brought against him and two former board members in a separate case. Trial dates have not been set, but they are not expected to start before next year.

Yesterday's court order came eight days before Abbey shareholders vote on the Santander bid, which would be Europe's biggest cross-border bank takeover. Santander needs the approval of 75 per cent of Abbey shareholders at the extraordinary meeting scheduled to take place on 14 October.

Mr Botin, along with the former executives Rodrigo Echenique Gordillo, Jose Ignacio Ucles Romero and Ricardo Alonso Clavel, are accused of selling investment products to clients that allowed them to collect interest without reporting it to the tax authorities in the 1980s, which allegedly cheated the Spanish treasury out of €85m in revenues. Spain's tax agency has settled with all but 28 of the 40,000 clients who bought the investment products. Those 28 will also be tried, according to yesterday's order.

The investment products were sold by the former Banco Santander, which merged with Banco Central Hispano in 1999-2000 to form the biggest bank in Spain and Latin America.

The misappropriation charges against Mr Botin relate to €160m in pension and bonus payments to two retiring bank executives. The court will investigate whether the golden parachute payments to Santander's former co-chairman Jose Maria Amusategui and the former chief executive Angel Corcostegui were legal.

Mr Botin, whose family has led Santander for three generations, with several of his children working in the bank at senior levels, has recently moved the bank's headquarters to Boadilla, 20km from Madrid.

The chairman occupies a hemispherical office at the top of the "spaceship" management building on the massive, half-finished site, which boasts nine office buildings, a golf course, a crèche and a gym.

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