Spain’s supreme court prosecutor has launched an investigation into the role the country’s former king, Juan Carlos, played in a deal in which a Spanish consortium landed a €6.7bn (£5.9bn) contract to build a high-speed rail line in Saudi Arabia.
Reports emerged in March suggesting Juan Carlos received a $100m (€88m) payment from Saudi Arabia’s late King Abdullah in 2008, three years before the contract was awarded.
Subsequent revelations about the former king’s financial dealings led his son, King Felipe VI, to strip his father of his annual stipend.
On Monday, the supreme court prosecutor said an investigation had been opened to “define or discard the criminal relevance of events that occurred after June 2014”, when Juan Carlos abdicated and ceased to enjoy constitutional immunity from prosecution.
According to a statement from the prosecutor, “the investigation pertains to the second phase of the construction of a high-speed rail line to join the cities of Medina and Mecca”.
Given the investigation’s “institutional significance” and “undeniable technical complexity”, the statement added, the inquiry would be carried out by one of the supreme court’s chief prosecutors and three assistants.
Felipe also renounced his personal inheritance from his father after it was alleged that he was set to receive millions of euros from a secret offshore fund linked to Saudi Arabia.
According to the Daily Telegraph, the alleged offshore account, named as the Lucum Foundation, was set up in July 2008 at an office in Panama City, and was tied to an account with Geneva’s Mirabaud private bank.
The account apparently held about €65m in funds that were described as a “donation” from “the king of Saudi Arabia”.
Prosecutors in Switzerland are also investigating another offshore fund allegedly linked to Juan Carlos, named the Fondation Zagatka.
In a statement in March, King Felipe said he had become aware last year of claims that he was the beneficiary of the Lucum Foundation, and had decided to renounce any benefit from the fund. He also denied any knowledge of being a beneficiary of the Zagatka fund.
The allegations have prompted calls for the Spanish parliament to investigate the former monarch’s business dealings.
However, the Socialist party, which heads Spain’s minority coalition government, sided with rightwing parties to head off an inquiry, arguing it would be unconstitutional.
Juan Carlos, once hailed as one of the world’s most popular royals and lauded for his role in Spain’s return to democracy, stepped down in 2014 after a string of scandals tarnished his reputation.
Pictures of the king posing in front of a dead elephant while on safari to Botswana in 2012 did not go down well in a country still reeling from the 2008 economic crisis.
Felipe was sworn in as king in June 2014, promising “a renewed monarchy for new times” and vowing to “listen, understand, warn and advise”.
