MADRID The chief executive of Santander SAN.MC, the euro zone's biggest bank, had his pardon of a criminal conviction partially annulled by a Spanish court on Tuesday, raising the possibility of sanctions by banking authorities.
The Supreme Court ruled unanimously that Alfredo Saenz, 70, would now have to bear the consequences of his conviction in 2009 for false accusations against debtors, effectively reinstating his criminal record. The ruling left intact the 2011 pardon of a three-month jail sentence.
The impact on Saenz was not immediately clear. Santander, the euro zone's biggest bank by market value, declined to comment.
Spain's existing rules on "banking honourability", which define the criteria by which bank board members are deemed to be fit and proper, would in most cases bar a person with a criminal record from banking.
The rules, dating back to 1995, are set to change, and Spain is in the process of adopting new ones that would give the Bank of Spain the final say when deciding whether someone can be a banker or not.
A spokesman from the central bank declined to comment.
The long-running saga has not had a major impact on Santander's share price, but it has been watched keenly in Spain, where banks and politics are closely linked.
Saenz was convicted in 2009 for false accusations against debtors when he headed Santander-owned bank Banesto in 1994. He was handed a brief jail sentence and barred from banking for three months.
He appealed and former Socialist Prime Minister Jose Luis Rodriguez Zapatero pardoned him in 2011.
Spanish Economy Minister Luis de Guindos declined to comment on the Supreme Court decision on Tuesday but said he respected its rulings.
The court partially overturned the pardon after a small political party called ICV-EUiA, a socialist-leaning, green group, appealed, in order to demand that Saenz step down from his position at the bank.
Shares in Santander were up 1.7 percent on Tuesday afternoon.
(Additional reporting by Carlos Ruano; Writing by Sarah White; Editing by Fiona Ortiz and Erica Billingham)