SPAIN’S HIGH court has opened a fraud inquiry into Rodrigo Rato, the former International Monetary Fund chief who was until recently chairman of Bankia, the part-nationalised lender at the forefront of Spain’s banking crisis.
The investigation into Mr Rato, along with 32 other top executives at Bankia, is the first step of a sweeping inquiry likely to draw in some of the most prominent names in Spanish politics and business.
Spain’s high court said yesterday it had accepted a case brought by a small political party to establish whether Mr Rato and other executives were responsible for falsifying Bankia’s accounts and misleading investors during its stock market listing, ahead of the lender succumbing to a €23.5 billion state rescue.
Mr Rato, a former Spanish finance minister, took charge of Bankia in 2010 and pushed ahead with a stock market listing less than a year before the lender was forced to request aid which eventually forced Spain itself to seek up to €100 billion in rescue funding for its banks from Europe in a deal yet to be finalised.
No specific charges have been made against Mr Rato or the other executives.
Bankia, which Mr Rato repeatedly publicly praised for its financial strength ahead of the rescue, was formed from a merger of seven politicised savings banks which had loaned aggressively into Spain’s property bubble. The bank has since become a symbol of the mismanagement of the country’s financial sector.
Mr Rato’s proximity to the ruling Popular Party, along with other executives named in the case such as José Luis Olivas, the former party head of the Valencia region, risks embarrassing the government of Mariano Rajoy, which had rejected earlier calls for a public inquiry into mismanagement at the bank.
According to the court filing, among those who will be called to testify are Miguel Ángel Fernández Ordóñez, the former governor of the Bank of Spain who stepped down a month early from his term following the Bankia rescue, and Francisco Celma, a partner at Deloitte responsible for auditing the lender’s accounts.
Before its nationalisation, Bankia had declared a profit of €309 million for 2011, which was later restated to a €3 billion loss after Mr Rato was ejected from the bank.
