Shareholders barrack the Abbey board over Spanish takeover

The chairman of Abbey National, Lord Burns, almost lost control of his group's shareholders yesterday during a heated meeting that eventually approved the bank's £8.9bn takeover by Spain's largest bank Santander.

The chairman of Abbey National, Lord Burns, almost lost control of his group's shareholders yesterday during a heated meeting that eventually approved the bank's £8.9bn takeover by Spain's largest bank Santander.

The meeting came close to breaking up at one point when shareholders, unhappy about the deal, asked for an adjournment. Several said they had come to back the deal but changed their minds during the meeting, which was disrupted by jeering and heckling. One investor shouted: "This whole business stinks!"

The largest cross-border banking deal in Europe was approved after four hours by Abbey shareholders owning 95 per cent of its stock in two votes during the meeting in north London. Measured by the number of shareholders, the takeover received only 65 per cent support yesterday.

The deal is set to fulfil the ambition of Santander's chairman, Emilio Botin, of breaking into the global top 10 of banks and creating the fourth-biggest bank in Europe. But at the meeting of 800 of Abbey's small shareholders at Wembley Conference Centre, not one investor spoke in favour. Richard Pout, who holds 500 shares, called for the meeting to be adjourned while allegations of financial misconduct were investigated against Mr Botin and other directors. He also wanted other allegations made during yesterday's gathering to be investigated. Mr Pout, 55, told Lord Burns: "The evidence is damning. There is quite clearly fraud going on and the company you're proposing to merge us with is not satisfactory. Adjourn this meeting now!" The motion would have been carried on a show of hands, but was defeated by 757 million votes to 43 million as Lord Burns used the proxy shareholder votes.

The meeting was attended by Antonio Panea and Javier Sotos Garcia, both members of an investor lobby group and well known for their appearances at the Santander shareholder meetings. Santander investors will vote on the Abbey takeover next Thursday. Mr Panea, a lawyer who used to work for Banesto, which Santander rescued in 1995, accused Santander yesterday of using 25 special purpose vehicles in the tax havens of the Bahamas, Caymans and British Virgin Islands to hide losses on its accounts, and likened it to practices at the collapsed energy trader Enron. A separate shareholder lobby group has written to the Financial Services Authority complaining that Mr Botin is not "fit and proper" to run Abbey.

Mr Botin and other board members face trials in Spain for alleged misappropriation over severance payments to former executives and helping clients evade taxes. But the FSA said on Wednesday that it saw "no material impediments" to approving the acquisition.

Several Abbey investors said the board should have got its house in order before deciding to merge with Santander, and accused Abbey of selling the bank in a hurry and on the cheap. One shareholder said: "I'm just an average Joe with my 100 shares but I would have thought that if you're going into a partnership with this bank you would have researched its background." He called the Santander board "a bunch of shysters - they're next to the Mafia!"

Lord Burns rejected all the criticism, saying "Abbey will emerge as a stronger, more competitive force on the high street" after the takeover.