Ex-Bankia chief to be investigated

More bank corruption... where does it end?
More bank corruption… where does it end?

A Spanish court has opened a fraud case against the former chief of state-rescued Bankia, and one-time IMF boss, Rodrigo Rato.

The lawsuit, brought by Union, Progreso y Democracia, a left-wing party, accuses Rato, amongst 33 others – including a former government minister and former Bankia chairman  – of fraud, price-fixing and falsifying accounts. Fernando Andreu, a judge at the National Court in Madrid, agreed to investigate the complaint.

The case will investigate the initial public offering of Bankia SA in July 2011, the restatement of its earnings that showed 2.79 billion euros of losses, and the states takeover and rescue of the bank with the injection of 23.5 billion euros of capital. Spain nationalised the parent company last week after experts appointed by the bank rescue fund said it had a negative value of 13.6 billion euros.

Under Spanish law, the accused could face jail sentences of up to six years but commentators said that while corporate corruption cases grab the headlines in Spain, “they rarely result in convictions.”

“It will be a long-running, complicated case,” said Pedro Schwartz, economics professor at San Pablo University in Madrid.

Bankia Chief Executive Francisco Verdu announced his resignation late yesterday after hearing about the case. Bankia declined to comment on the resignation or any possible replacement for Sr. Verdu.

The decision to proceed with the case was made public Wednesday but can still be appealed, the judge said in his ruling.

The ruling also said that while the facts of the case merit a criminal investigation, it is “not possible to establish in a concrete and definite way the level of responsibility” of each of the parties.

The Bankia group is the result of a merger of seven savings banks, including Caja Madrid and Bancaja. Since the IPO last year the shares of Bankia SA have lost three-quarters of their value.

So it isn’t just UK and US banks that are run by corrupt thieves.

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2 thoughts on “Ex-Bankia chief to be investigated

  1. DQ

    “So it isn’t just UK and US banks that are run by corrupt thieves”

    You’ve got that right my friend… Sad to say — some are so weak and evil that anything they have access to (especially other people’s money) they lie, cheat, steal, and corrupt it…. Almighty Amerika seems to be king of those deals 😦

    Hopefully some judge will have the huevos to put these losers in jail and confiscate their assets, sell their assets and repay as much as they can…

    Instead of the government looking for the off shore assets of the good folks, they need to concentrate on the thieves right under their noses — the ones IN government!

    Tally Ho!!!

    🙂 DQ

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