Inside Wealth

King Gives Up Royal Yacht, but Donors Want It Back

Raphael Minder
King Juan Carlos I of Spain has decided to give up his yacht as Spain faces recession.
Miquel Benitez | WireImage | Getty Images

In hard times like these, everyone has to make sacrifices. And King Juan Carlos of Spain wanted it known that he was doing his part, too.

Two weeks ago, the royal palace announced that "for austerity reasons," the king would hand over to the government one of his most famous possessions, a $27 million, 136-foot yacht he received as a gift 13 years ago to replace one given to him by King Fahd, the former ruler of Saudi Arabia.

If only it were that easy.

On Monday, the gesture turned instead into an ownership battle after the businesspeople who paid for the yacht announced that if Juan Carlos did not want it, then they wanted it back.

In a letter to the administrators of Spain's national patrimony, the foundation representing the businesspeople emphasized that the gift had been made with the stipulation that the yacht be used by the king and members of his family.

The 35-ton aluminum yacht, Fortuna, is moored off the island of Majorca, where the royal family has a palace and vacations each summer. The 30 or so executives who contributed to its purchase include hotel owners and bankers with links to Majorca and other Balearic Islands, whose regional government contributed a small part of the cost of the yacht, too.

The gift was presented as a way of thanking the monarch for helping to promote Majorca, one of Spain's major tourism destinations. But Majorca, too, seems to be a problem.

It has become the scene of a corruption case undermining the reputation of the royal family and centering on accusations that the king's son-in-law, Iñaki Urdangarin, embezzled millions from lucrative contracts for sports events organized on behalf of regional politicians.

Last week, the Majorca-based judge who is leading the inquiry said he would investigate whether Princess Cristina, Mr. Urdangarin's wife and the king's younger daughter, had engaged in tax evasion or money-laundering.

Mr. Urdangarin has not been charged with any crime. But the case has intensified pressure on the monarchy at a time when the king's popularity has fallen to record lows in opinion polls, and there have even been some calls for the king to abdicate in favor of his son, Crown Prince Felipe.

The king came to the throne in 1975, when the monarchy was reinstalled after the death of the dictator Gen. Francisco Franco, but as the head of one of Europe's poorest royal families after decades in exile. Recently, however, as resentment has mounted here over high unemployment and cuts to social services by a government struggling to balance its budget, the family's wealth has come under greater scrutiny.

It is not that the king, who is 75 and has had several health problems recently, would miss the Fortuna all that much; he made only one outing on the vessel in 2012. But a representative of the royal household said the yacht's future was not for the palace to decide.

Carmen Matutes, the president of the foundation that is trying to reclaim the yacht, told the Spanish news media on Monday that her organization had no intention of keeping it, which is understandable. Just filling its fuel tanks costs more than $30,000, according to Spanish news reports. And then there is the crew.