CAM trial gets tech­ni­cal

Ex­perts dis­agree if holes in ac­counts were er­rors or fraud

Costa Levante News - - NEWS -

By Alex Watkins THE TRIAL against the ex-di­rec­tors of the CAM sav­ings bank restarted at the High Court in Madrid on Mon­day.

They are ac­cused of fraud and false ac­count­ing in 2010 and 2011 when the bank claimed to be in good fi­nan­cial health but was ac­tu­ally about to go out of busi­ness.

A se­ries of eight ex­pert wit­nesses for the pros­e­cu­tion and the de­fence of­fered dif­fer­ing opin­ions as to whether the hid­den losses and in­flated prof­its should be con­sid­ered er­rors or fraud.

For ex­am­ple, ex-Bank of Spain in­spec­tor Rubén Manso re­ferred to the al­leged ir­reg­u­lar­i­ties when Bankia was floated on the stock mar­ket and then also re­quired a state bailout; in that case the public pros­e­cu­tor ruled out false ac­count­ing as there was not enough ev­i­dence the rules had been bro­ken and the bank had as­sets to cover its losses.

He claimed the CAM had enough to cover its deficit at the end of 2010 as re­quired by the Bank of Spain, and that the in- for­ma­tion he had been given did not in­di­cate the ac­counts shown to in­vestors had been fal­si­fied.

How­ever Javier López An­dreo of con­sul­tants PwC ar­gued: “There is a vast dif­fer­ence be­tween an ac­count­ing er­ror and fraud.

“€1,037 mil­lion is a sig­nif­i­cant enough amount to show that the CAM acted in­ten­tion­ally,” he said in ref­er­ence to the amount of in­cor­rectly man­aged credit that had been de­tected by the reg­u­la­tor in De­cem­ber 2010, six months be­fore the gov­ern­ment in­ter­vened.

He blamed the poli­cies of the ex-di­rec­tor gen­er­als Roberto López Abad and María Dolores Amorós, who along with six other ex-di­rec­tors face up to seven years in prison.

Ex­perts flagged ‘in­ap­pro­pri­ately re­clas­si­fied’ loans that were un­likely to be re­paid and de­scribed some op­er­a­tions as ‘very strange’ which had been re­moved from the bal­ance sheets or ‘cal­cu­lated wrongly’, en­abling the CAM to pub­lish al­legedly fic­ti­tious prof­its of €65 mil­lion.

Sr Manso’s ar­gu­ment that ev­ery­thing com­plied with the reg­u­la­tions and the de­cline did not set in un­til 2011 was sup­ported by the ex­pert brought in by ex-di­rec­tor gen­eral Juan Car­los Tor­res.

Ger­mán López re­ferred to the pol­icy of se­cu­ri­ti­sa­tion (sell­ing bun­dles of debts to in­vestors) to in­crease liq­uid­ity, which ended up tak­ing place through pri­vate funds be­tween Ire­land and the UK.

He ad­mit­ted this put the trans­ac­tions be­yond the con­trol of the Span­ish mar­ket reg­u­la­tor (CNMV) and they were re­ferred to as ‘lack­ing sense’ by the Bank of Spain in 2012.

An­other ex-Bank of Spain in­spec­tor, Án­gel Regúlez, pointed out that Sr López Abad took early re­tire­ment be­fore the €5.249 mil­lion gov­ern­ment bailout and sub­se­quent sell-off to Banco Sabadell.

He said the top di­rec­tors en­joyed spe­cial con­di­tions even though they should have re­ceived pack­ages un­der the same re­dun­dancy pack­age as the rest of the work­force.

Sr López Abad re­ceived a €5,561,000 golden hand­shake, noted the ex­pert.

The trial is due to fin­ish on July 21.

Roberto López Abad (left) re­ceived a €5,561,000 golden hand­shake

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