Former industry minister José Manuel Soria. PEDRO ARMESTRE / AFP

Spain’s Economy Minister has defended the decision to nominate as its World Bank representative a former industry minister who resigned in April after he was linked to an offshore company named in the so-called Panama Papers.

Speaking from the Chinese city of Hangzhou, where the G20 Summit is being held, Economy Minister Luis de Guindos said that José Manuel Soria had been put forward as executive director at the World Bank, insisting that the appointment was “purely administrative”.

If a civil servant cannot be a civil servant, then what’s going on? Acting PM Mariano Rajoy

“This is not a political appointment, but administrative. It is not decided by the Cabinet or me,” said Guindos.

Soria, who has denied any wrongdoing, resigned as minister in April following reports of alleged links to an offshore company on the British island of Jersey so as to limit any damage to Spain’s caretaker government, the conservative Popular Party (PP).

The move was in the run up to the June general election, the second in seven months, which ended as inconclusively as the previous one in December.

Soria’s nomination to the World Bank position came just after acting Prime Minister Mariano Rajoy failed at the second attempt to win a new term, increasing the likelihood that Spain will have to hold its third election in year.

Rajoy and Guindos, who are both personal friends of Soria, concede that the appointment could be potentially embarrassing, but are playing down the issue. “Soria resigned from his political appointments and returned to the Commercial Technicians and State Economists Corps, he requested the appointment, and it would be illegal to deny it to him, because he is not under investigation or been debarred,” said Guindos.

Rajoy confirmed that Soria had informed him of his intention to apply for the post in June, two months after he was linked to the Panama Papers, a trove of 11.5 million internal documents from a Panama-based law firm that was leaked to the media.

Speaking on Sunday, Rajoy defended Soria, saying: “If a civil servant cannot be a civil servant, then what’s going on?”

Guindos also admitted that he and Soria had talked about the appointment in June, although at the time he denied it, telling television channel La Sexta that Soria was headed to the United States to teach at a university there.

Soria resigned as minister following reports of alleged links to an offshore company on the island of Jersey

In April, when he was linked to the Panama Papers, Soria initially denied any wrongdoing and agreed to explain himself before Congress, but decided to step down as industry minister and also gave up his positions as congressional deputy and president of the Popular Party (PP) in the Canary Islands, his home region.

Soria’s appointment puts further pressure on the PP caretaker government, which has been plagued by a string of corruption scandals that will see several high-profile officials and former officials face trial this autumn.

The opposition Socialist Party (PSOE) has already demanded that Guindos appear in Congress to explain the reasons for the nomination. The economy minister says he will do so between September 16 and October 15, when the government must present its budget details to Brussels.

Guindos insisted that the government was not going to miss the opportunity to have a Spaniard on the board of the World Bank, arguing that Soria was the best-qualified candidate for the job.

The World Bank’s 189 governors are expected to vote on Soria’s candidature as part of the process of appointing 25 executive directors. Candidates are rarely rejected. Soria will take up his post in November until October 2018. His salary will be some €226,000 a year, tax free.

The Spanish government examines the suitability of candidates based on their track record in public service as well as on their experience when selecting for international posts, the Economy Ministry said.