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Sunday, 30 June, 2002, 12:48 GMT 13:48 UK
Fresh scandal for Spain's top bank
Merger
Santander's Emilio Botin and BCH's Jose Maria Amusategui celebrate the merger
Santander Central Hispano (SCH), Spain's biggest bank, is facing fresh troubles after a judge accused five top executives of aiding and abetting tax evasion.

The accusations stem from a 12-year-old case, which revolved around 138 clients of what was then Banco Santander.

In the early 1990s, according to Judge Teresa Palacio, the authorities found indications of irregularities in so-called loan assignments made by the bank between 1987 and 1989.

Allegedly, the "assignment" of loans to clients enabled them to avoid paying tax on as much as a quarter of their bank deposits.

In a statement, the bank denied the allegations, saying that it had no tax liability for interest on the loans.

Any wrongdoing was the client's responsibility, not the bank's, it said.

SCH is not the only Spanish bank to encounter legal trouble in recent months.

Its main competitor, Banco Bilbao Viscaya Argentaria, is under investigation for allegedly hiding accounts used to finance the election campaign of Venezuelan president Hugo Chavez.

Size matters

SCH became Spain's largest bank in 1999 after a merger between Santander and Banco Central Hispanoamerica.

One result was a long boardroom squabble over leadership, which eventually saw former Santander executives - including Mr Botin - take the top jobs.

The merged bank has suffered as have many of its Iberian rivals from the collapse of Argentina's economy.

Spanish institutions have traditionally been among the main foreign bankers for South America.

See also:

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