His Governance by Stages

In the mid-1960s, Rafael Termes was appointed CEO of Popular. The two men always had a very cordial relationship, although they defended different and legitimate ways of conducting the bank’s activities. Valls saw the future in retail banking, with small and medium-sized enterprises and individual savers. Within a period of adjustment, Luis Valls was appointed chairman in 1972. After four years of good relations—albeit with increasing disagreements—Termes was appointed chairman of the Spanish Banking Association (AEB) and left the Popular. On July 20 of that same year, Javier Valls and Manuel Fanjul were appointed first and second vice presidents on the Bank’s Board of Directors. Javier Valls held this position until 1989, when he was promoted to the presidency, sharing it with his brother Luis.

The Shareholders’ Syndicate of the Banco Popular is a typical parasocial pact, that is, an agreement between a group of shareholders to regulate voting and share transmission rights which may affect the control and management of the bank. This type of agreement is contemplated in law and in fact there are specific conditions in the Law of Incorporated Companies relating to listed companies.

In Banco Popular, this Shareholders’ Syndicate came into being on 21 March 1946 with the name “Syndication Agreement of the Shareholders of Banco Popular” (see annex).  As stated in the contact itself, the aim of the agreement was to “promote BANCO POPULAR ESPAÑOL by all available means, and while firmly believing that to achieve this goal it is necessary to guarantee the continuity and permanency of a specific orientation” It was a way of expressing support for the manner in which the Board of Directors was managing the company.

This agreement represented the execution of the Syndication Contract formalized by Félix Millet Maristany (who was to be the President of the bank until 1957) and other shareholders on 26 July 1945. That agreement included twelve clauses which ranged from the making of joint agreement to the procedure for selling shares.(see annex) In order to gain access to the Board and the Vice-Presidency of Banco Popular in the 50s, Luis grouped his shares and those of his collaborators in the Syndication pact. In this way, he achieved the support of a group of shareholders who endorsed his way of managing the Bank. Aristóbulo de Juan – Luis Valls Taberner

The obligations outlined in the pact were modified in 1975 and it took the form of a simple gentlemen’s agreement which allowed the shareholders involved complete freedom to buy and sell shares. Shareholders could join or leave the Syndicate when they wished. To attend to consultations which shareholders raised in the branches of the Bank, the Shareholder Office edited and distributed an orientative brochure for those interested. (See annex)

The Syndication or Syndicate¹ was represented on the Board of Directors of Banco Popular, When it began in 1946, motions were passed by a majority of votes, but with the passage of time and the growth if the Syndicate, this mechanism became outdated and members of the Syndicate exercised the voting rights of any other shareholder. The last representative of the Syndicate on the Board of the Bank – until the time of its resolution in 2017 – was José Mateu Istúriz.

The stake of the Syndicate (the group of syndicated shareholders) in the social capital of the Bank oscillated over the years: when Luis Valls died in 2006, the Syndicate held a 10.67% stake; in 2013 it had fallen to 7.53% and in 2016 it rose to 9.60%. The stake of the Syndicate was public – it appeared naturally in the Annual Reports of the Bank both as a shareholder group and as a member of the Board; it also informed the National Share Market Commission (CNMV) every week of any changes, which the commission published as Relevant Data, while reporting to the Bank of Spain.

There were thousands of syndicated shareholders (over 200 in 2012): they pertained to institutions or companies (such as Europea de Inversiones, Minera Catalano Aragonesa), Fundaciones (como la Romanillos, Fomento de Fundaciones, Atenciones Sociales, la CMJ Godó o la Tatiana); and above all, there were many individual shareholders including some of the founding familes or traditional shareholders of the Bank like the Gancedo, Montuenga, Molins, Solís, Nigorra, Estévez, etc. families.  The fact that they formed part of the Syndicate was a way of expressing their approval of the Bank’s managers and especially of Luis Valls.

After the death of Luis Valls in 2016, the Syndicate maintained their stake in the Bank. Shareholders were informed of the Syndicate through the Bank’s branch network, which resulted in ample diffusion; in this way, it became a channel of representation and communication for many diverse minority shareholders.