Princess makes historic court appearance over fraud claims

Hundreds of protesters blew shrieking whistles, revved motorcycle engines, honked car horns and chanted “Out with the Spanish crown” just 100 metres from the back entrance of the court in Palma de Mallorca.

Cristina briefly smiled toward the cameras and gave a two-word greeting: “Buenos dias” (“good morning”).

Cristina, the first Spanish royal to be questioned in court since the monarchy was restored in 1975, faced Judge Jose Castro, who has summoned her as a fraud and money laundering suspect.

During a brief recess, Manuel Delgado, a lawyer representing an organisation called Frente Civico that has brought independent accusations against the princess, told reporters outside tthat she seemed calm, well-prepared but evasive.

Delgado declined to comment on what Castro asked her about.

He said the princess had told the judge that “she had great confidence in her husband”.

Prosecutors dropped a summons in a related case on the basis that there was insufficient evidence of her involvement in a foundation set up by her husband, Inaki Urdangarin.

The legal troubles of King Juan Carlos’s youngest daughter have seriously damaged the image of Spain’s monarchy at a time of 26 per cent unemployment, outrage over political corruption, unpopular tax increases and cutbacks to cherished government programs.

The use, or suspected abuse, of company funds to cover household expenses for her Barcelona mansion is among the evidence Castro has compiled about Aizoon, the real estate and consulting firm that Cristina owned with Urdangarin. Castro has referred to Aizoon in court paperwork as a “front company”.

Castro says in court records that many company expenses that appear personal in nature were never declared on the couple’s income tax returns, and that he must determine whether the amounts are high enough to turn the non-reporting into a crime punishable by prison.

If the amounts are less, the likely result would be a tax investigation and possible fines.

The case stems directly from another one accusing Urdangarin of allegedly using his position as the Duke of Palma to embezzle public contracts via the Noos Institute, a supposedly nonprofit foundation.