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Spanish savings bank has fired two directors and is investigating two former executives for allegedly syphoning off €20 million ($26.5 million) into secret pension funds, the bank said Saturday. The board of directors of Caixa Penedes bank had "required the departure" of its president, Ricard Pages, and director general Manuel Troyano. It said both men had agreed to leave, the bank said in a statement. The decision comes after state prosecutor for the northeastern region of Catalonia, Teresa Compte, said her office was investigating all four on suspicion of involvement in illegal activity. Regional newspaper La Vanguardia said the case was the first time prosecutors had investigated senior executives for "criminal responsibility" in their handling of a savings bank. The prosecutor named the other two former executives as Joan Caellas and Jaume Jorba. Caixa Penedes along with partners Cajamurcia, CajaGRANADA and SA NOSTRA owns Banco Mare Nostrum, S.A. (BMN). The group received €916 million ($1.21 billion) in restructuring aid from the Bank of Spain's Fund for Orderly Bank Restructuring (FROB). The fund was set up to aid institutions meet higher reserve requirements and is aimed at strengthening their finances and quelling fears that Spain might be Europe's next country to need a bailout. Caixa Penedes said its board "disapproved of the content, method, lack of transparency, unusual nature and disproportionate size" of the remuneration package the four directors had helped themselves to. The pension funds were set up in another institution without the knowledge of Caixa Penedes's board. Ignacio Fernandez Toxo, spokesman for trade union Comisiones Obreras said that if the money could be recovered it could help offset the €45 million ($59.53 million) in wage bill savings BMN had recently said it would seek from its work force. He said many BMN employees are members of Comisiones Obreras. The investigation comes as Spain is burdened with an unemployment rate of 21.5 percent — nearly 5 million people out of work — the eurozone's highest. The country's borrowing costs have also risen to an almost unsustainable level of 7 percent interest rate on 10-year bonds. An auction of 12- and 18-month bonds last week also went badly, with Spain forced to offer very high interest rates to investors.
