Ex-directors of intervened bank face embezzlement charges

The anti-corruption prosecutor has begun legal action against the former directors of Novacaixagalicia for having concealed from the bank’s board and the Bank of Spain the amount of money they awarded themselves in the form of early retirement packages, to which they were allegedly not entitled.

The public prosecutor considers their actions to constitute crimes of disloyal administration and embezzlement given their “serious repercussions on the national economy.” The minimum amount the directors would have to return, according to the lawsuit, is 7,875,474 euros.

The former directors involved in the case are Julio Fernández Gayoso, the current vice president of Novacaixagalicia; José Luis Pego, the ex-chairman of the bank; Javier García de Paredes, ex-deputy chairman; and the former directors Óscar Rodríguez Estrada and Gregorio Gorriarán Laza. The latter four are alleged to have taken home payoffs that, along with their pension plans, amounted to 52 million euros.

Novacaixagalicia, which was formed after the merger of Galician savings banks Caixa Galicia and Caixanova, needed two capital injections via the state Orderly Bank Restructuring Fund (FROB) totaling 3.7 billion euros.

The bank was nationalized in October 2011, and will need another 4.5 billion euros before it is properly recapitalized, according to the Bank of Spain.