Spanish stock market regulator CNMV has, as expected, dropped all charges against former Telefonica chief Juan Villalonga of insider trading.
In an official statement, the CNMV said there were no facts or circumstances to justify any sanction for the illegal use of insider information. Telefonica shares lost 3.67 points on the Spanish stock market yesterday in reaction to the news.
Villalonga resigned from Telefonica last week after a four-year run at the Spanish conglomerate during which he transformed it into one of Europe's most dynamic players in the entertainment, communications and on-line realms. His departure followed allegations that he bought options on Telefonica shares while negotiating alliances with the US telephone giant now known as WorldCom. Villalonga denied any irregularities, saying he bought the options a full two months before the WorldCom alliance was announced.
But his resignation has not created the stability that was expected. The Spanish media has reported a worsening conflict between Telefonica's new president, former tobacco boss Cesar Alierta, and other senior executives in the company who were installed by Villalonga.
Spanish daily El Mundo, which led the campaign to oust Villalonga, reported yesterday that Alierta will dedicate the next month to reorganising the management team.
Telefonica has also announced that it will proceed with all pending deals negotiated by Villalonga. Yesterday, the Spanish group executed the capital increase required for the acquisition of Dutch producer Endemol Entertainment. It also plans to complete the acquisition of US portal Lycos through its internet subsidiary Terra Networks.