Bank of Santander suspended payments to 43,200 clients of its largest real estate fund
This Investment Fund was sold among spanish customers as a conservative one and devoted to buy buildings and offices for renting. Redemptions are suspended since Feb 2009.
This fund, named Santander Real State Banif Fund (Fondo Santander Banif Inmobiliario in Spanish), was the largest and the oldest in its category in Spain with a capital amount of EUR3,725 million (45% market share). Therefore, most of the unitholders are seniors, some of them already retired.
In Oct 2008, a handful of large unitholders (with presumably privileged business information) sold their holdings (16% of the assets) at their maximum value. In order to cover the cost, Bank of Santander borrowed EUR170 million at market price to be paid by the Fund itself. At the same time, Santander investment advisors persuaded small savers to desist from selling their shares, saying that investment was secure because it was based mainly on rents, so it did not have relation with the property market situation.
In December 2008, the fund created panic among shareholders when it announced a special valuation. In addition, Santander branches then also advised their small clients to seek refund. The resulting withdrawal requests represented 80% of the assets, exceeding the 10% which could by law permit to freeze the fund. Using this rule, which it ignored a few months before, Santander obtained from the CNMV (the Spanish Security and Exchange Commission) authorisation to suspend redemptions for a two year period.
In February 2009 the bank sold one of its finest buildings (in the Castellana, Madrid) to an alleged acquaintance of the president of Banesto, daughter of Santander president, at a price 28 % below the value it had in December.
In May 2009, the shopping center Plenilunio was sold to the company Orion Columbia , which had been created 3 months before with EUR3010 capital. The price was 16% below the new assesment value.
Another famous building, the edificio España, which had been acquired in 2005 but never rented, is still for sale. Santander ordered refurbishment to Sacyr-Vallehermoso, one of its big debtors. This building brought estimated EUR48 million fees to Santander, but never generated rents for unitholders.
From Dec 2008 to Dec 2010, the fund has lost 20% of its value, but Santander's alleged yearly profit is more than 8 billion EUR, which allows it to buy more and more banks (Abbey, A&L, RBS, ...)
In Dec 2010, Santander announced it will lift redemption freeze in Feb 2011 for purely commercial reasons. Nevertheless, management fees remain until there, including for holders which asked 2 years ago for redemption.
In Oct 2009, the trial court number 39 of Madrid accepted a civil lawsuit based on evidence of fraud, misappropriation and corporate crime against the main managers of Santander Real State Banif Fund.
The spanish media has almost totally suppressed this story as Emilio Botin, the Chairman of Santander has strong links with spanish government and the media. One of Spain's leading media companies is heavily indebted to Santander
I've recently tried to switch my alliance & leicester current account over to the Santander current account that has recently been advertised as paying 5% interest to people who depost £1000+ per month and giving £100 to new customers. They claim that it's easy to do and that they will arrange for all direct debits and standing orders to be switched over. Since agreeing to the switch everything that could have gone wrong has.
I was told that I could choose the date for thae transfer, which I did but my crditors were trying to draw money from an account which hadn't got money in it. As a result I was given late payment and admin charges. When I went to the bank to complain, the manager was defensive rather than apologetic. I pointed out that 2/3 of peole who had made the switch were unhappy with the service. She replied by saying that it wasn't the case at that branch (Arnold, Nottingham). I responded that the following Saturday when I had spent over an hour in the bank trying to get the money transfered over there were many other people coming in making similar complaints. There were people making complaints at the counter while I was talking to her. When I told her that I was unable to access my account on the internet she said that I should have recieved instructions in the post. this was different information to what I'd been given by the counter assistant who had helped sort things out the previous week. She had said that It would switch over automatically. Furthermore I had recieved nothing in the post about accessing my account on line.
When I askd her if she could stamp the EMA form for my daughter who has recently opened a student account there she said that she couldn't do this then give it back to me in case I tampered with it. I gave her the envelope with the EMA application in & asked her if I could trust her to post it for me. She became quite hoity saying she was the stand in manager & of course she could be trusted to do that. I reminded her of my recent experience with A&L and said it was hardly surprising that I was apprehensive. I need to phone up the people dealing with my daughter EMA because I'm not confident about the application getting there.
I recieved information today on accessing my account on line.
It seems thet I have to register on line before being sent personal ID, passcode & ebanking registration number. I haven't been able to view my account for 3 weeks & probably wont be able to for another week at
If you're tempted by the incentives that A&L are offering, think again. It's really not worth it for all the hassle and time wasting involved.
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