Bankia reassumes control of Valencia CF after court ruling

The bizarre relationship between top La Liga soccer club Valencia CF, the Generalitat regional government and Bankia has reached another absurd juncture. The lender now owes itself 200 million euros.

A Valencia administrative court on Tuesday annulled a financial guarantee worth 75 million euros given to the club through the Generalitat’s Valencia Financial Institute in 2009 against a loan from Bankia for the purchase of shares in the club. When earlier this year the club announced it would be unable to pay back the loan, the Popular Party-led regional administration became the largest shareholder in Valencia CF with 70 percent of its stock. The regional government had already paid 4.8 million euros in interest due on the loan.

The judge has now ruled that this maneuver was illegal and thus Bankia now finds itself in control of Valencia CF. The lender was nationalized last year and bailed out with funds obtained by Spain’s European partners to the tune of 18 billion euros. The club president, Manuel Llorente, is currently attempting to refinance another Bankia loan of 200 million euros. Llorente was installed at Valencia in 2009 by Bancaja, the club’s principal creditor which has since been absorbed by Bankia. With debts standing at 550 million euros, Llorente was forced to refinance the club’s debt and to sell off the team’s best player every summer since.

The financial guarantee backed by the IVF was the last act in office of former regional premier Francisco Camps, who stood down from his post in 2011 to fight allegations of corruption connected to the Gürtel kickbacks-for-contracts scandal.