The Bank of Spain said it has started proceedings to review whether to disqualify Alfredo Saenz, chief executive officer of Spain’s biggest lender Banco Santander (SAN) SA, from banking.
The central bank notified interested parties of its decision to start the process, which relates to a Supreme Court ruling last month, the regulator said in an e-mailed statement today. Saenz and the bank will present their case to the Bank of Spain, a spokesman for Santander said in a statement sent by e- mail today.
The central bank’s initiative comes in response to a ruling by the court in Madrid that a government pardon granted to Saenz in 2011 went too far by adding that having a criminal record didn’t affect his ability to work in banking. According to Spanish law, Saenz and the bank now have 10 to 15 days to present their arguments to the Bank of Spain.
The legal proceedings involving Saenz have cast a shadow over the 70-year-old executive since 2009 when he was convicted in a case dating back to 1994. Under Spanish banking regulations, “professional virtue” is a requirement for those working in the banking industry and can be lost by anyone with a criminal record.
The case involving Saenz relates to a lawsuit stemming from his tenure as chairman of Banco Espanol de Credito SA, now a retail banking unit of Santander.
Banesto, as the lender is known, sued a group of businessmen to recover loans in 1994. The defendants filed counter-complaints of false accusation, which a judge decided to investigate, and Saenz was held responsible because he approved the filing of the initial lawsuit.
In March 2011, the Supreme Court upheld the conviction for false accusations, handing him a three-month jail term and a suspension from banking for the same period. Former Prime Minister Jose Luis Rodriguez Zapatero issued the partial pardon in November of the same year by commuting the penalties to the maximum fine allowed.
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