The experts of the Bank of Spain refuse to review the Popular accounts of 2015 and 2016

The experts appointed by the Bank of Spain in the case investigating the resolution of Banco Popular reiterate, in a new report, that it is not possible to object to the bank’s accounts for 2015 and 2016 as it is not possible to transfer the results of the inspections to those years with retroactive character.

After taking their statement on two occasions, the judge of the National Court, José Luis Calama, requested a new expansion of the report from the judicial experts Teodoro Fernández and Álvaro López, whose dossiers were very critical of the bank’s situation. The most delicate aspect was to clarify whether Popular should have declared losses of more than 1,000 million and not a profit of just over 100. In addition, the technicians could not explain some issues raised by the Prosecutor’s Office, such as the real impact of some magnitudes on the accounts of the extinct entity, and admitted that they did not take into account part of the documentation provided by PwC. It was on this last point that the magistrate urged them to carry out a “simulation” exercise, taking into account the PwC appraisals.

In the document presented now by the judge, the technicians reiterate that the bank used “non-admissible appraisals”, although “it is not possible to estimate the valuation deficit, which does not imply that they were not overvalued”. From an accounting perspective, this simulation does not have regulatory support and, therefore, there is no requirement for a correction in the annual profit and loss account, they add, so it is not possible, “from an accounting perspective”, to ensure that the deficit of provisions of the years analyzed is a consequence of said appraisals. Nor have they provided the individual accounting sequence of each property, the document continues, so it cannot be determined if there was an inappropriate increase in its book value and if this led to the release of provisions.

The head of the central court of Instruction number 4, José Luis Calama, has been investigating the last two management teams of Popular since 2017, led by Ángel Ron and his successor at the head of the entity, Emilio Saracho, for alleged corporate crimes. The judge then opened two separate pieces, one investigating Ron’s team for the 2016 capital increase, and a second on Saracho’s 108-day term, which focuses on a possible crime of market manipulation with false news to bring down the value of the price.

Likewise, the head of the Central Court of Instruction No. 5, Santiago Pedraz, is investigating the capital increase carried out by the bank in 2012 as a result of the presentation of two complaints directed against the then managers of the entity.

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