Compliance

10:24 AM
Reuters
Reuters
News
Connect Directly
RSS
E-Mail
50%
50%

Spain Court Says No to Bankia Evidence

A judge rejected a request on Monday for the former chairman of Spain's Bankia, Rodrigo Rato, to give evidence in a fraud case against him and other executives at the failed bank before he appears at a parliamentary inquiry on Thursday.

A judge rejected a request on Monday for the former chairman of Spain's Bankia, Rodrigo Rato, to give evidence in a fraud case against him and other executives at the failed bank before he appears at a parliamentary inquiry on Thursday.

The High Court judge set the next court date for Wednesday, when he may decide whether to drop the case or take it further, lawyers who were at Monday's hearing said.

Rato, also a former head of the International Monetary Fund, resigned from Bankia in May, barely two weeks before the lender asked for a 19 billion euro ($23.12 billion) rescue that has pushed Spain to the brink.

Anger over Bankia's bailout has mounted since Spain was forced to turn to Europe for cash to shore up its banks in June. That, economic crisis and indebted regions kept the country's borrowing costs at levels seen as unsustainable on Monday.

Rato did not appear at Monday's hearing where the judge admitted fresh evidence and requests from various parties.

"This does not mean that later on, he (Rato) will not appear to defend charges within the course of the judicial inquiry," Andres Herzog, a lawyer for the small political party - UPyD (Union, Progress and Democracy) - that instigated the case.

Rato's lawyer, Ignacio Ayala, declined to comment.

Rato's grilling in parliament over the Bankia rescue on Thursday, alongside former socialist economy minister Elena Salgado, promises to set off political fireworks.

Former governor of the Bank of Spain Miguel Angel Fernandez Ordonez and form Secretary of state for Economy Jose Manuel Campa were due to testify in parliament on Tuesday.

Rato is a former economy minister under the previous People Party government. Bankia's listing in July 2011, when the bulk of shares were sold to ordinary Spaniards, happened under a government led by the leftist PSOE party.

Spain's High Court opened the investigation on July 5 into whether Rato, and 32 other former board members of Bankia and its parent group are guilty of fraud, price-fixing and falsifying accounts.

Other shareholder action groups and campaign movements are joining the investigation and have asked the judge to consider dismantling Bankia's current management.

Spain's rescue fund FROB, which had already pumped 4.5 billion euros into Bankia before it asked for a further 19 billion euros, has asked to be present at court hearings. ($1 = 0.8219 euros)

(Reporting by Sarah White; Editing by Julien Toyer and Louise Ireland)

Comment  | 
Print  | 
More Insights
Register for Bank Systems & Technology Newsletters
White Papers
Current Issue
Slideshows
Video