August 28, 2012 / 5:47 PM / 7 years ago

King of Spain's scandal-hit son-in-law steps down at Telefonica

MADRID (Reuters) - The King of Spain’s son-in-law, under investigation over allegations that his sports charity was used to embezzle public funds, has stepped down from a lucrative U.S. post at telecoms giant Telefonica to distance the company from the scandal.

Inaki Urdangarin, son-in-law of Spain's King Juan Carlos, attends the funeral of his father Juan Maria at the Basilica of San Prudencio in Vitoria May 12, 2012. REUTERS/Vincent West

Inaki Urdangarin, who also sits on the boards of several of the Spanish company’s subsidiaries in Latin America, said in a document seen by Reuters that he had decided to take an extended leave of absence so the case against him would not “have any negative result for the Telefonica group”.

Urdangarin added that he intends “to return to carry out new activities in the future” with Telefonica.

Telefonica declined to comment.

Urdangarin, who became the Duke of Palma when he married King Juan Carlos’s youngest daughter, Princess Cristina, has lived with his wife and four children in Washington D.C. since 2009, but they will now return to Spain and live in Barcelona.

Spain’s royal family has come under pressure since Urdangarin was called to appear in court in December over the misuse of millions of euros in public funds at the Noos Institute, which he ran from 2004 to 2006.

Urdangarin was questioned by an investigating judge, who will question other suspects before deciding whether to proceed with a trial.

Despite the accusations against Urdangarin, Telefonica renewed his contract in July, which Spanish media said was for 1.5 million euros ($1.9 million) a year plus perks as chairman of Telefonica International USA.

The contract renewal led to a storm of criticism in Spain, where 25 percent of the population is jobless and those in work are being hit with rising taxes and cutbacks in public health and education.

Former handball player Urdangarin has denied any wrongdoing and said in court that he had behaved “properly and transparently”.

The case has generated intense media attention, which the low-key Spanish monarchy had previously managed to avoid.

Amid an outbreak of anger and protests over new austerity measures in July, the royals said they would take a pay cut, reducing the palace’s 8.3 million euro budget by up to 100,000 euros. ($1 = 0.7990 euros)

Reporting by Emma Pinedo and Robert Hetz; Writing by Clare Kane; Editing by David Goodman

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