The national court in Madrid said it had agreed to hear an investigation by antifraud prosecutors from the Spanish tax agency into past income tax returns filed by Mr. Botín and his relatives.
The tax agency said the inquiry dated to May of last year, when Spain received a list of undeclared Swiss bank accounts, which was initially handed over to France by a former information technology specialist at HSBC.
Jesús Remón, a lawyer for the Botín family, said Thursday that the Botíns expected the court to resolve the case “quickly and satisfactorily” because “the family has voluntarily and completely normalized its tax situation and is compliant with all its tax obligations.”
A person with knowledge of the situation, who spoke on condition of anonymity, said the family had paid about 200 million euros, or $283 million, in back taxes over the last year.
Mr. Botín has been a dominant figure on the Spanish corporate scene for 25 years. He has transformed his bank into one of Europe’s largest, with significant investments in Brazil, Britain and the United States, where Santander owns Sovereign Bank.
The investigation comes at a particularly difficult time for Spanish banks, as they struggle with record borrowing costs and loan defaults after the collapse of the country’s real estate sector.
Spain has been part of a group of euro zone countries with troubled economies that has been in investors’ line of fire for more than a year. The yield differential, or spread, between Spanish and German government bonds climbed back to its highest in a decade on Thursday, a sign of investor nervousness about the implications for Spain of a possible financial and political collapse in Greece.
Because of its formidable assets outside Spain, particularly in the booming Brazilian market, Santander has weathered the financial crisis better than many of its Spanish counterparts.
The court announcement preceded a shareholders meeting on Friday in Santander, the northern Spanish city where the bank originated.
The tax agency emphasized that it had pursued court action because a statute of limitations will expire on June 30, jeopardizing its ability to examine some of the oldest tax data.
Among the family members being investigated are Mr. Botín’s daughter, Ana Patricia Botín, who is in charge of Santander’s British business, and Mr. Botín’s brother Jaime, a major shareholder in Bankinter, another leading Spanish institution.
Bankers in Spain did not want to comment for the record on an issue under judicial investigation, but many expressed astonishment about accusations that Mr. Botín was linked to the undeclared Swiss accounts in the HSBC file. Mr. Botín’s stature in Spain is such that his rare pronouncements on the Spanish economy can eclipse those of politicians in the national media.
The case dominated the conversation Thursday at an industry gathering in Madrid at which a prize was being awarded to Francisco González, the chairman of BBVA, Santander’s main Spanish rival.
The person familiar with the Botín situation, who spoke on condition of anonymity, said the family’s dealings with HSBC dated to 1937, when Mr. Botín’s father, Emilio, opened an account in Switzerland after the start of the Spanish Civil War when he left Spain for London. The elder Mr. Botín died in 1993; according to this person, his son and other heirs were told only last year by the Spanish authorities of the money kept in Switzerland.
The HSBC list included 569 Spanish clients. Its disclosure allowed Spain to recoup about 300 million euros, or $426 million, in previously undeclared tax revenue last year, according to the head of the tax agency, Juan Manuel López Carbajo. That amount is expected to increase this year because of outstanding cases involving some of the largest Spanish holders of secret accounts at the Swiss private banking subsidiary of HSBC.
Leadership problems at Santander surfaced this year after a court ruled against Alfredo Sáenz, the chief executive of Santander and Mr. Botín’s second in command, for making false claims in the 1990s against debtors to Banesto, a troubled bank that was eventually taken over by Santander. The ruling also prohibited Mr. Sáenz from banking for three months, but he has remained in the job pending the outcome of an appeal.
Mr. Botín, 76, has been chairman of Santander since 1986 but has shown little inclination toward finding a successor. “See you at the next acquisition,” is how he famously ended a presentation to analysts in London after buying Abbey National, a leading British mortgage lender, in 2004.
Since then, he has actually accelerated Santander’s expansion during the financial crisis to take advantage of falling valuations and help offset a weakening domestic market. Recent acquisitions have expanded Santander’s presence in markets like Mexico, Germany and Poland.
Mr. Botín is not the first prominent corporate leader to be a target of Spanish antifraud prosecutors. Two years ago, César Alierta, the chairman of Telefónica, was cleared after a lengthy investigation into accusations of insider trading. A court rejected the charges because it judged that too much time had elapsed between the suspected crime and the start of court proceedings.
Article source: http://www.nytimes.com/2011/06/17/business/global/17santander.html?partner=rss&emc=rss
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