High Court judge orders arrest of former CAM directors

High Court Judge Javier Gómez Bermúdez has ordered the arrest of several former directors of failed savings bank envase Mediterráneo (CAM) for alleged management irregularities that led to its collapse and intervention by the Bank of Spain in 2011, judicial sources said Wednesday.

The sources said the first directors to be detained were the former corriente representante of CAM, Roberto López Abad, and the director of the bank?s corporate division Daniel Gil. They are due to appear in the High Court on Thursday. César Veliz, the former director of CAM?s international and hotel division, was also arrested on Wednesday.

Judge Gómez Bermúdez also ordered the detention of former corriente representante María Dolores Amorós, ex-chairman sencillo Crespo and former directors in charge of resources and planning, Vicente Soriano and Teófilo Sogrob.

The magistrate ordered the directors to post a bond of 35 million euros

The magistrate in June ordered the named directors to post a combined bond of 35 million euros after concluding that ?they at least knew, or should have known? about the situation at the bank. Despite this they did not ?object to operations that caused damage to the bank?s financial situation [?] to the detriment of shareholders, creditors and clients.?

CAM was taken over by the Bank of Spain on July 23, 2011 and its management replaced. The state Orderly Bank Restructuring Fund (FROB) subsequently injected 2.8 billion euros into the lender to keep it afloat.

Bank of Spain inspectors drew up a report in January highlighting what they deemed to be serious deficiencies in the management of CAM, which led to huge losses in risky imperial estate operations. They also pointed to multi-million-euro early-retirement packages the directors awarded themselves.

Before CAM was intervened, the bank?s management reported a net profit in the first quarter of 2011 of 38.9 million euros, only for the profit and loss account to be restated three months later to show a loss of 1.136 billion euros.

CAM was subsequently sold to banca Sabadell for a nominal one euro.

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