King Juan Carlos told his son-in-law in 2006 to cut ties with a company now mired in corruption allegations, an official at Spain's royal palace said Sunday. Authorities are probing the activities of a non-profit company run by Inaki Urdangarin between 2004 and 2006. "(The king) ordered him to stand down from his activities and he sold his shares," said the official, who works at the royal palace's press office, confirming reports in the Spanish press. "He was told he shouldn't work for himself and it would be better if he worked overseas." Urdangarin, 43, also known as the Duke of Palma de Mallorca, now works for Spanish telecommunications giant Telefonica in Washington, where he lives with with his wife, Infanta Cristina. The scandal, the first to hit Spain's royal family in years, centres on Urdangarin's time at the helm of the Instituto Noos, now suspected of siphoning off money from contracts paid by the regional government of the Balearic Islands, where the institute is based. The royal palace did not uncover any lies or fraud in 2006, the source said. However, a royal legal advisor found signs the Noos institute was possibly involved in commercial activities not consistent its non-profit mission. On December 12, the royal palace froze Urdangarin out of official activities over the scandal. The royal family traditionally maintains a discreet profile in Spain, where Juan Carlos is widely respected, credited with guiding the country to democracy after the death of the dictator Francisco Franco in 1975. The scandal has nevertheless caused anger at a time when ordinary Spaniards are being squeezed by spending cuts and a lack of jobs, with an unemployment rate of 21.5 percent.