Ex-IMF chief Rato has court date set over Bankia fiasco

Rodrigo Rato, a former IMF managing director and economy minister under the premiership of José María Aznar, has been ordered to appear before the High Court on December 20 in connection with an investigation into the establishment and flotation of Spanish bank Bankia, which was nationalized shortly after Rato resigned as its chairman.

High Court Judge Fernando Andreu is investigating five possible offenses in Bankia, including falsifying documents, fraud and misappropriation.

Bankia and its parent Banco Financiero y de Ahorros (BFA) is the amalgam of seven savings banks, including Caja Madrid of which Rato was also chairman. Bankia listed in July of last year at an initial price of 3.75 euros but its shares are currently worth less than a third of that.

According to the results of stress tests carried out by independent consultant Oliver Wyman released last month, Bankia requires a capital injection of 24.743 billion euros to restore its balance sheet, which has been badly mauled by the bank’s exposure to Spain’s moribund real estate sector.

After Rato’s departure, Bankia reinstated its earnings for last year to show a loss of over three billion euros when it had initially declared a profit.

Andreu has subpoenaed other former Bankia board members, including former interior minister Ángel Acebes, as well as former Bank of Spain governor Miguel Ángel Fernández Ordóñez, the ex-chairman of the National Securities Commission (CNMV), Julio Segura and Francisco Celma, a partner at accountants Deloitte, which was responsible for the audit of Bankia’s books.

The judge took on the case after UPyD party leader Rosa Díez filed a criminal complaint against Bankia’s board in June.

Meanwhile, Bankia sources confirmed that 72 directors of the bank will have their bonus payments for last year withdrawn. The bonuses were initially approved by Rato and Fernández Ordóñez when he was still head of the central bank. Those directors who have already received their bonuses will be asked to return the money.