In the earlier version of the story, it was erroneously mentioned that Santander Bancorp (SBP) CEO was sentenced to jail in Banesto case. Actually, it was Banco Santander's CEO, who has received jail sentence in the case. The full corrected version follows:
Banco Santander S.A. (STD) chief executive officer Alfredo Saenz was sentenced to six months in prison and ordered to pay fine in a case that dates back to 1994, according to media reports on Monday.
In 1994, when Saenz was with Banco Espanol de Credito SA, known as Banesto, he allegedly forced four clients to pay back a debt of about €3.6 million using a criminal complaint against them, sources said. The four clients were Pedro Olabarria, Luis and Jose Ignacio Romero, and Modesto Gonzalez Mestre.
A judge initially filed charges against the four businessmen, sending them to protective custody, but the case was subsequently dropped. However, the four businessmen preferred to pursue counter charges against the bank.
The Barcelona Provincial Court sentenced Saenz and two other Banesto executives to six months in jail. Saenz and two executives were also ordered to pay a fine of €9,000 or US$12,957 each.
However, sources said Banesto would appeal the decision, which is not definitive.
Saenz has been CEO of Banco Santander since 2002. Saenz established himself as an expert at saving failing banks in Spain. With degrees in both law and economics, he had been associated with the industrial sector in his native Basque country for many years.
In the 1980s, Saenz entered the banking sector and quickly rose to being one of the country's most influential bankers. He reputation grew with the rescue of the declining Banca Catalana.
Saenz became chairman of Banesto in 1993 when the company was taken over by the Bank of Spain. Spain's Central Bank selected Saenz to replace Mario Conde and to rescue the failing bank. Saenz further enhanced his reputation with the restoration of Banesto. At one time, the biggest bank in Spain, Banesto was on the verge of collapse by extensive wrongdoings by members of its board. Former chairman Mario Conde was punished for his role and continues to serve a 20-year prison term for his involvement in the scam.
In 2002, Saenz left Banesto to accept the position of CEO in Banco Santander.
Banco Santander is currently trading at $16.70, down 3 cents.
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