RBS director charged with misuse of funds

A director of the Royal Bank of Scotland is to stand trial in Madrid accused of misusing funds from a Spanish bank.

A director of the Royal Bank of Scotland is to stand trial in Madrid accused of misusing funds from a Spanish bank.

Last week a Madrid court said it was proceeding with a case against Emilio Botin and two former executives of the bank he runs, Banco Santander Central Hispano (BSCH). The case relates to a power struggle at the bank, which ran for more than two years from 1999 to 2002.

The episode ended when the two directors, Jose Maria Amusategui and Angel Corcostegui, resigned. They received payoffs of €56m (£38m) and €108m respectively.

The charges allege that Mr Botin misused the bank's money to buy the two directors' resignations so that they did not challenge him. The accusations are not the only ones being faced by Mr Botin. A Madrid judge, Teresa Palacios, wants him to answer charges that a retirement scheme promoted by BSCH in the late 1980s breached Spanish tax laws.

BSCH has denied the allegations, pointing out that the payoffs had been approved by the bank's board.

In Britain, RBS is standing by Mr Botin. "He is a valued and trusted member of the board," said its chairman, Sir George Matthewson.

BSCH is the largest shareholder in the RBS, with 5 per cent. However, it is also interested in buying Abbey, having made a tentative approach to the high street bank last month. The talks did not lead to BSCH making a bid.