By Euro Weekly News Media • 27 November 2018 • 12:20
THE FORMER head of Bankia is on trial accused of falsifying accounts and fraud.
Rodrigo Rato, who led financial giant Bankia when it was floated on the stock market in 2011, joins 34 other individuals and clients accused of misleading investors, many of whom lost money.
69-year-old Rato, who is also a former leader of the International Monetary Fund, faces five years in prison if found guilty of falsifying Bankia’s financial reports before it launched on the stock market.
The former banker is currently serving a four-and-a-half year sentence for misusing funds when he was boss of both Caja Madrid and Bankia between 2010 and 2012.
The trial is expected to last seven months, finishing at the end of June next year. More than 300,000 investors bought shares for a minimum of €1,000 following a major advertising campaign by Bankia in 2011, assuring customers of its profitability.
After shares dropped significantly in value in 2012, the bank was forced to admit it had actually made a near €3 billion loss the previous year.
Spain’s Central Government later bailed Bankia out, investing more than €22 billion to save the failing institution. In turn, the EU was then forced to intervene to save Spain’s banking sector.
An investigating lawyer, Fernando Andreu, told the court the results given to investors in 2011 had been, “completely false,” adding Bankia’s subsequent downfall brought to an end, “the entity’s dreams and delusions of grandeur.”
Bankia says it has since returned €1.9 billion to more than 220,000 smaller investors since 2016.
Fernande Herrero, secretary general of the Adicae association of bank users, claims that does not go far enough, saying, “for us that doesn’t settle the incredibly serious fraud that was committed.”
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