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Mon, Jan 24, 2005 - Page 12 News List

Spanish banking executive faces pension allegations

AFP , Madrid

One of the richest and most influential figures in Spain, Emilio Botin, head of the country's largest bank Banco Santander Central Hispano (SCH), goes on trial Wednesday in connection with alleged pension irregularities.

From Wednesday, he must answer charges that he acted illegally in awarding two former senior colleagues multimillion pensions on their retirement.

Botin faces between six and 12 years in jail if found guilty with his trial set to run until next month.

His co-defendents are former joint chairman Jose Maria Amusategui and former deputy chairman Angel Corcostegui, for whom the prosecution is demanding up to eight years in jail.

They respectively pocketed 56 and 108 million euros when they retired and deny, along with Botin, any wrongdoing in connection with the windfall following a case brought two years ago by two minor SCH shareholders, Francisco Franco Otegui and Rafael Perez Escolar.

Botin, 70, masterminded last year's acquisition by SCH of Britain's Abbey National for a total of US$17.12 billion to create the world's tenth-largest bank.

Examining magistrate Teresa Palacios must rule whether the pension payments in 2001 and 2002 harmed the interests of SCH shareholders.

One of the plaintiffs, Perez Escolar, maintains that the alleged conclusion of a "secret pact" regarding the payments to Amusategui and Corcostegui on the merger in 1999 of Banco Santander and Banco Central Hispano, which saw the creation of SCH, was in violation of company law.

Amusategui, then the chairman of Banco Central Hispano with Corcostegui as his right-hand man, co-chaired SCH for two-and-a-half years alongside Botin before taking retirement in mid 2001.

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