MADRID, April 14 (Reuters) - A Madrid court adjourned on Tuesday to decide whether to put the chairman of Telefonica SA TEF.MC on trial for alleged insider trading in 1997, when he had no connection to the telecommunications group.
“We will announce our decision as soon as possible,” Judge Manuela Carmena told the court, as Telefonica’s Cesar Alierta sat in the dock next to his co-accused, nephew Luis Placer.
The state prosecutor has asked for four-and-a-half-years’ jail for Alierta and four years for his nephew for an alleged case of insider trading when the top businessman was head of former state-owned tobacco company Tabacalera.
Lawyers for Alierta and Placer have always denied their guilt in the case, which was recently ordered reopened by Madrid’s Supreme Court having been dropped by a court in 2005.
A former stockbroker, Alierta has presided over the transformation of Telefonica from a sluggish former state monopoly into a dynamic multinational with a major presence in Latin America, eastern Europe and Britain.
In more than three hours of initial proceedings on Tuesday, lawyers for the defence argued that stock market regulator CNMV had already investigated the case and found no wrongdoing. They argued the case had taken place too long ago to be punishable and a trial would not be in the public interest.
“We want this whole case to be dropped,” said lawyer Horacio Oliva.
But State Prosecutor Alejandro Luzon called the CNMV investigation “limited and full of defects” and said Alierta and Placer had made profits of 1.86 million euros ($2.5 million) buying Tabacalera shares thanks to privileged information.
“I want a guilty verdict for offences that damaged the credibility of the financial markets,” Luzon said.
The same Madrid court ruled in 2005 that the incidents described in the accusation were no longer punishable by law, but Madrid’s Supreme Court has told them to consider the case again.
The case started after a private complaint by an association representing consumers, which has been withdrawn.
Alierta left the court without speaking and Telefonica said the case is linked to him and not the company.
Telefonica shares closed 1.1 percent lower at 14.99 euros on Tuesday, roughly in line with European telecommunications stocks <0#.SXKP>. (Writing by Jason Webb; Editing by David Holmes)
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