Banco Santander Chief Executive Is Given Pardon

LISBON — Spain’s departing Socialist government granted a pardon on Friday to Alfredo Sáenz, chief executive of Banco Santander, commuting a three-month prison sentence and a temporary ban from working as a banker. Instead, Mr. Sáenz must pay a fine.

The government’s unexpected decision removes a source of the uncertainty surrounding the leadership of Santander, the largest bank in the euro zone by market valuation.

In March, Spain’s Supreme Court upheld an earlier court ruling against Mr. Sáenz, who was convicted for making false accusations in 1994 in a case involving Banesto, a troubled bank that was eventually taken over by Santander.

The ruling had included a three-month ban for Mr. Sáenz from working in the banking industry, but he had stayed in his job pending an appeal and his request for a pardon from the government.

The government gave no explanation for the pardon, which came just weeks before José Luis Rodríguez Zapatero, the prime minister, was scheduled to relinquish power to a center-right government led by Mariano Rajoy. Mr. Rajoy’s Popular Party swept to a landslide victory in the Nov. 20 election against Mr. Zapatero and his Socialists.

A spokesman for Santander said that the bank was “satisfied” with the decision, without commenting on what the implications would be for the court appeal.

Spain’s justice ministry described the decision as a partial pardon, since Mr. Sáenz would still have to pay the “maximum fine” corresponding to his earlier conviction. The exact amount, however, was not specified.

A similar pardon was also granted Friday by the government to two other defendants in the 17-year-old case — Banesto executives found guilty alongside Mr. Sáenz.

José Blanco, one of the most senior ministers in the outgoing Zapatero government, would not say whether the decision to pardon the bankers had been done with the consent of the incoming Popular Party.

For the last decade, Mr. Sáenz, 68, has been second-in-command at Santander to Emilio Botín, who has been Spain’s most influential banker and the bank’s chairman for 25 years.

While Santander has suffered along with other Spanish banks from its exposure to a collapsed real estate market, its formidable assets outside of Spain, particularly in booming Brazil, have allowed the bank to weather the euro debt crisis better than many of its counterparts. Since the onset of the European financial crisis, Santander has continued to try and take advantage of falling valuations in order to buy assets overseas and offset a weakening domestic market. Recent transactions have notably expanded Santander’s presence in markets like Mexico and Poland.

Separately, Mr. Botín and 11 of his relatives have been the focus of a tax evasion investigation, started in June by a Spanish court, relating to an undeclared Swiss bank account. The Botín family account was part of the data handed over to the Spanish tax authorities by their French counterparts, after it was leaked by a former information technology expert who had worked for the Swiss private banking subsidiary of HSBC.

Article source: http://www.nytimes.com/2011/11/27/business/global/banco-santander-chief-executive-is-given-pardon.html?partner=rss&emc=rss