MADRID Jan 26 Santander (SAN.MC) directors and
shareholders traded insults on Monday at an extraordinary
general assembly that approved a share issue to buy U.S. unit
Sovereign Bancorp Inc. SOV.N.
Santander executives were left red faced after one of them
forgot to turn his microphone off and was heard insulting
shareholders after heated questions from the floor about
Santander's purchase of U.S. unit Sovereign and its exposure to
the alleged Bernard Madoff fraud.
"Bastards. Listen to them clapping," said one unidentifiable
executive, referring to shareholders applauding criticism of
Santander's issue of shares to buy the U.S. unit.
Nonetheless, shareholders later approved the 177.4 million
share capital hike, equivalent to 2.2 percent of capital, to buy
the 76 percent of Sovereign it does not already own.
"The full acquisition of Sovereign will allow us to increase
our geographical diversification and will provide a fresh
impetus for expanding our commercial franchise ... in the best
area in the United States," Chairman Emilio Botin said.
A Santander spokesman declined to comment on the executive's
Shareholders also criticised Santander board members over
the bank's 2.3 billion euro exposure to accused financial
swindler Madoff through the bank's alternative investment fund
One executive demanded security eject a shareholder from the
hall after he launched an abusive tirade about Optimal's losses.
Botin's almost-flawless reputation as a titan of Spanish
business has been tarnished by Santander's exposure to the
alleged worldwide Madoff fraud.
Responding to a lawyer representing 100 clients who have
lost 70 million euros in the fraud, Botin said the bank might go
to court to recover money.
"The bank is analysing all the aspects related to Madoff and
evaluating the possible legal action," he told shareholders.
A source close to the matter told Reuters on Thursday that
Santander had agreed to meet lawyers representing investors who
have lost money, but Santander has declined to comment on any
(Reporting by Jesus Aguado; Writing by Ben Harding; Editing by