A Madrid court ruled Friday that Telefonica chairman Cesar Alierta, one of Spain’s most powerful businessmen, had committed insider trading in 1997 while president of Spanish tobacco company Tabacalera.
The court acquitted Alierta, however, on a statute of limitations technicality – that too much time had taken place between the alleged crime in 1997 and a case being brought against Alierta in 2003.
Though it is unclear whether prosecutors will now take their case to Spain’s Supreme court, the ruling lifts the threat of a four-and-a-half year jail sentence which has hung over Alierta for six years.
The ambiguity of the sentences will, however, fuel inevitable speculation about Alierta’s continuity as Telefonica chairman.
Under Alierta, Telefonica largely pulled out of TV and film, selling off assets such as Endemol. In Spain, Telefonica still operates the country’s biggest IPTV, Imagenio. It is also seen as the leading candidate, teaming with France’s Vivendi, to purchase Prisa satcaster Digital Plus.
In a 71-page sentence, the Madrid court ruled that, while Alierta was negotiating Tabacalera’s purchase of U.S. cigar-maker Havatamp, he drew down a bank loan to set up an investment company Creaciones Baluarte, which was then transferred to his nephew, Luis Placer.
“Forseeing the impact that the announcement of Havatamp’s purchase would have on the market,” the court ruled, Baluarte, in one of its market moves, bought shares in Tabacalera which it sold after the Havatamp deal went through for a profit of Pta309.9 million ($2.6 million).