The Judge Asked Santander Bank To Provide Documents To Determine Whether The People’S Bank Of China Was Abnormally Financing The Capital Increase.

2021-02-10   |   by CusiGO

Jos é Luis Calama, a judge of the National High Court, asked Banco Santander for various documents to investigate whether the bank provided its clients with the capital increase in 2016 as required by law without deducting the relevant capital.

All this can be traced back to May 25, 2016, when the people’s party, under the chairmanship of angel Ron, decided to increase its capital to cover the provision for depreciation of real estate assets and strengthen its own resources. The operation went well, but after the arrival of the new president Emilio saracho, there were rumors that the expansion might be supported to some extent by the bank’s own credit. The law stipulates that if funds are provided to customers for capital increase, these amounts should not be included in their own resources.

On April 3, 2017, under saracho’s command, El popular issued a relevant fact that it was investigating the issue and had informed the Council of “certain financing provided to customers who may be used to acquire the capital increase shares, if verified, in the amount of, It should be deducted in accordance with the current capital regulation of the bank, without affecting the profit and loss and net book value. The statistical estimate of these financing amounts is 205 million euro, and the total amount of this analysis is 426 million euro. ”

The judge said, “there is a very important document in this case. At the request of cnmv, heraclio PE NIA submitted a report (2 October 2017), which supplements the previous report and covers all aspects of the 3 April incident. ”

According to the car, he said in the letter, “accurate financing instructions have been provided.”. In the judge’s view, “the chief executive officer of the people’s Bank of China and the chief executive officer of retail banking and customer business have led this financing, encouraging commercial networks – through regional and regional managers – to provide financing to specific customers of the people’s Bank of China in order to participate The above-mentioned “capital increase”.

He also believes there are signs that senior management in the bank’s strategic unit, general intervention, internal audit and risk, is “aware of and agrees with this financing.”. Even the chief compliance officer of the CEO’s office informed the office that the business network was funding the expansion project, the hearing document said.

As a result, an investigation is under way to see whether “the institution has consciously violated the transparency principle guiding its operation and provided the market with a better regulatory capital ratio than it actually has.”.

The judge criticized the inaction of the people’s internal audit department for “not carrying out an extensive investigation on this issue, but doing some estimation work”. He also recalled that the Security Council had not effectively called for such work, noting that the investigation conducted by the under secretary of the Security Council “consciously excluded any review of specific operations.”. It’s a shocking fact. ”

He also criticized PwC, the external auditor, and the European Central Bank, the agency’s regulator, for passing intrusive checks. Even this entity applauds for surgery after surgery.

Therefore, the Committee requested Santander bank to assist court experts in preparing three documents in Excel or access format, detailing the shareholders (excluding employees of people’s group) who subscribed for more than 5000 shares in the capital increase in May 2016.