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Spain Bankers in Bonus Scandal

Source: El Pais - Fri 27th Sep 2013
Spain Bankers in Bonus Scandal

A Barcelona court has named the former chairman of Caixa Catalunya, Narcís Serra, and the former general manager Adolf Todó of the now nationalized savings bank along with 52 other board members as official suspects in a case involving huge bonus and severance packages they awarded themselves despite the critical state of the lender's finances, judiciary sources said Friday.

The move comes after the anti-corruption prosecutor in Barcelona accused Serra and Todó and the other members of the board of awarding themselves "disproportionate" emoluments in relation to the level of the bank's solvency before it was taken over by the state's Orderly Bank Restructuring Fund (FROB). The prosecutor said the action of the board could constitute criminal mismanagement.

The FROB has injected over €12 billion of taxpayers' money into the savings bank's commercial banking arm, Catalunya Banc, after it became unstuck due to over-exposure to the real estate sector, and is looking to offload the lender. The bank also wants to lay off 2,500 workers to reduce its workforce to 4,700.

Serra, who was a member of former PSOE PM Felipe González's Cabinet and mayor of Barcelona, and Todó, are due to be questioned by the judge on October 21 along with 3 other former directors.