Rato facing Bankia fraud investigation


SPAIN’S HIGH court has opened a fraud investigation into Rodrigo Rato, the former International Monetary Fund chief who was until recently chairman of the part-nationalised lender at the heart of Spain’s banking crisis.

The investigation into Mr Rato, along with 32 other Bankia executives, is 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, which came ahead of the lender’s €23.5bn state rescue. No specific charges have been made.

Mr Rato, a former Spanish finance minister and stalwart of the ruling Popular party, took charge of Bankia in 2010. The lender’s subsequent plea for state aid eventually forced Spain to seek up to €100bn in European rescue money for its banks.

Bankia, whose financial strength was touted repeatedly by Mr Rato ahead of the rescue, was formed from a merger of seven savings banks that had lent aggressively to property developers.

Mr Rato’s association with the PP risks embarrassing prime minister Mariano Rajoy’s government, which rejected earlier calls for a public inquiry into the bank.