In a testimony to the National Supreme Court, a former president of a prominent bank, Ángel Ron, stated on Wednesday that supervisory and regulatory authorities, including the Bank of Spain and the European Central Bank, approved the 2012 capital increase and that all stipulated requirements were satisfied.
Answering questions from the prosecution, his counsel, and several defense attorneys regarding the charges, Ron submitted a criminal complaint for just over an hour, according to legal sources speaking to Efe. He appeared before Santiago Pedraz, the head of central court number 5, which is examining the 2012 capital raise at the now-defunct bank.
The banker recalled that Popular Bank had cleared the ECB’s asset quality review in 2012, as well as the stress tests the agency applied to European lenders. For Popular, the most favorable scenario showed a capital surplus of €677 million, while the worst scenario indicated a deficit of €3,200 million, a deficit the bank could cover with its own resources, per the Bank of Spain.
To address a hypothetical situation in which the bank would face a €3,200 million shortfall at the Bank of Spain’s request, Popular drafted a plan that included a capital increase of €2.5 billion.
A few days later, the Bank of Spain approved the plan and the capital increase unconditionally, Ron consistently asserted, according to the same sources.
Members of the board participated in the operation announced by Ron. €500 million of the €2.5 billion was paid in; directors held 25.4% of the capital and, after the increase, owned 24.1%.
Ron stated that no one would invest €500 million if they intended to cheat. However, after the People stressed that the European timetable required more than six months to implement, he acknowledged the duration ahead.
He noted that the prospectus for the capital increase was fully transparent and contained the stress test results, the recapitalization plan, and interim financial statements approved by the Bank of Spain. He linked the discussion to the influence of the Guindos decrees aimed at strengthening the financial sector.
Similarly, in a monitoring report dated 31 December 2012, the Bank of Spain confirmed that the requirements derived from the European Banking Authority’s minimum Core Tier 1 capital, rated at the highest quality, were met. The report indicated a Core Tier 1 ratio of 9%, exceeding the necessary threshold.
Ron stressed that Popular did not require public subsidies or external funds, a point echoed by witnesses including the bank’s former vice president, Roberto Higuera, who is referenced later in the proceedings.
Legal sources indicate that Higuera explained Popular did not use public funds because it would have been detrimental to shareholders; he also named the Bank of Spain and Ibercaja among entities considered not-for-profit in that context. The investigation into President of Central Court No. 4, José Luis Calama, runs parallel to the case before Judge Pedraz. Since 2017, Calama has been involved with Popular’s two most recent management teams, led by Ron and his successor, Emilio Saracho, for alleged corporate crimes.
The judge has since filed two separate pieces related to Ron’s 108-day tenure, one examining a 2016 capital increase by his team and the other examining a possible market manipulation case tied to false news intended to drive Saracho’s stock price downward. The matter continues as the investigation unfolds.[citation]