Santander's Emilio Botin cleared of misusing bank funds

Emilio Botin, Spain's top banker, has been acquitted of charges of misappropriation of funds and mismanagement stemming from big severance packages paid to departing executives.

Emilio Botin, Spain's top banker, has been acquitted of charges of misappropriation of funds and mismanagement stemming from big severance packages paid to departing executives.

However, the 70-year-old Santander chairman, whose family has run the bank for three generations, still faces another trial on charges of falsifying documents and violating tax laws. Along with other bank executives, he is accused of selling investment products to clients that allowed them to collect interest without reporting it to the tax authorities in the 1980s.

Santander recently took over Abbey, the UK mortgage bank.

Yesterday's ruling by the National Court in Madrid absolved Mr Botin and his former co-chairman Jose Maria Amusategui and the former chief executive Angel Corcostegui. The verdict said the €164m retirement payments made to the two former executives were legal, "made as compensation for the services provided to the bank."

The case was brought by Rafael Perez Escolar, a longstanding disgruntled shareholder, and Juan Francisco Franco Otegui, who own around 200 shares in Santander each. They alleged that the payments were made behind the backs of shareholders and were designed to persuade the two executives to leave in 1999, leaving Mr Botin in firm control of the bank.

Mr Botin's acquittal had been widely expected. Though the public prosecutor had recommended that the case be shelved, Judge Teresa Palacios decided last year that the trial should go ahead.