News Column

Former Bankia Chief Questioned About Fraud Allegations

Dec. 20, 2012

Rodrigo Rato, former chief of the troubled Spanish bank Bankia, was Thursday questioned about fraud allegations by the National Court.

Shortly before he resigned in May, Rato had developed a viability plan for Bankia requested by the government, but was unable to regain the trust of the authorities, he told the court.

The 63-year-old former director of the International Monetary Fund and former Spanish economy minister was the last among 33 former Bankia board members to be interrogated.

Rato headed Spain's fourth-largest bank from January 2010 until last May, when the discovery of a huge financial gap at Bankia forced him to resign.

The balance sheet said the bank had made a profit of 309 million euros (395 million dollars) in 2011. In May 2012, it emerged that Bankia had in fact made losses worth nearly 3 billion euros.

Bankia was then partly nationalized. That move played a key role in Spain's decision to seek eurozone aid for its banking sector.

Spanish banks are now to receive about 40 billion euros in aid, including 18 billion euros for Bankia. That comes in addition to 4.5 billion euros received previously.

On arrival in court, Rato was booed by dozens of Bankia clients who accused the bank of selling them high-risk financial products without making them aware of the risks involved.

The National Court launched an investigation into the Bankia case after the small party Union, Progress and Democracy (UPyD) accused its former executives of fraud and account falsification.

Bankia was one of the lenders most exposed to Spain's property bubble, which collapsed during the global crisis.

Source: Copyright 2012 dpa Deutsche Presse-Agentur GmbH

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