Santander's Botin in dock over fraud charges

Emilio Botin, boss of Spanish banking colossus Santander, which took over Abbey National last year, will be accused in a Madrid court this week of misappropriating company funds.

Botin, who vigorously denies the charge, is accused of illegally awarding severance packages totalling £117 million to two former executives of Banco Central Hispano Americano, which merged with Santander six years ago.

Botin also faces allegations that he falsified documents to help clients to evade taxes in the late Eighties, but a trial date for that case has not been set. Botin denies all charges.

Both criminal prosecutions are being brought by an association of shareholders led by Rafael Perez Escolar, a former executive of Banesto, another Spanish bank, which collapsed before being bought by Santander. Escolar was imprisoned for his role in the Banesto affair.

Botin has won praise for building Santander into one of Europe's biggest banks. He has expanded in South America, while the acquisition of Abbey, the British mortgage bank, was Europe's biggest cross-border banking deal.

But Botin came under scrutiny during the bid for Abbey. Vince Cable, the Liberal Democrat Treasury spokesman, pointed out that four members of Botin's family sit on the Santander board.

But Britain's Financial Services Authority, the chief City watchdog, said that Santander passed its 'fit and proper' test, and raised no concerns.

Deminor, a Spanish corporate governance agency, gave the bank a clean bill of health in a report published last year, but it raised several issues. Deminor stated that stock option plans 'cannot be considered as best practice' due to insufficient performance criteria.