Spanish Court Rules Santander’s Saenz Pardon Went Too FarCharles Penty
Spain’s Supreme Court ruled that a government pardon granted to Banco Santander SA Chief Executive Officer Alfredo Saenz went too far by saying a criminal record didn’t have any impact on his ability to work as a banker.
In an appeal ruling handed down today, a panel of judges said the former government’s pardon granted to Saenz in 2011 could not offset the consequences of his criminal conviction, including any possible restrictions for him to continue working in the industry, a spokeswoman for the Madrid-based court said.
The legal proceedings involving Saenz have overshadowed the 70-year-old executive and Spain’s biggest bank since 2009, when he was handed a conviction in a case dating back to 1994. According to Spanish banking regulations, “professional virtue” is a prerequisite for those working in the banking industry and can be lost by anyone with a criminal record.
A spokesman for Madrid-based Santander, who asked not to be named in line with company policy, declined to comment on the ruling. Saenz wasn’t available to take calls seeking comment.
Former Prime Minister Jose Luis Rodriguez Zapatero granted Saenz a partial pardon in November 2011 by commuting the jail term and threatened suspension to the maximum fine allowed under the law for the offense. The court ruled today that the pardon had gone too far by seeking to render invalid “derived effects” of the sentence, including “any impediment to exercise banking activity,” the court spokeswoman said.
The Bank of Spain and the government will “apply the law” in this case as in any other, Spanish Economy Minister Luis de Guindos said at a briefing in Brussels today, calling Santander “very important” for the economy. “I am convinced that its management capacity will lead it to keep being one of the principal banks in Europe and the world.”
The case involving Saenz related to a lawsuit stemming from his tenure as chairman of Banco Espanol de Credito SA, which is 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 the 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, handing him a three-month jail term and a suspension from banking for the same period. Zapatero issued the partial pardon in November of the same year by commuting the penalties to the maximum fine allowed.