Bankia lawyers call for court to abandon “inquisition”

The comptroller of Spanish lender Bankia is expected to appear before the High Court on Monday to answer questions about his accounting and how he reached the conclusion that the beleaguered savings bank was financially secure when it got its Ibex stock market listing.

Sergio Durá Mañas has been called to testify before Judge Fernando Andreu, who has been leading an investigation into the causes that contributed to the failure of Caja Madrid (now Bankia).

Durá has been targeted in the investigation along with a host of other past and present bank officials, including former Bankia chairman Rodrigo Rato.

At the same time, Bankia's lawyers have filed a motion with Judge Andreu asking him to call off his "inquisition" and, what they call, harassment of bank employees. Otherwise, they say, the financial institution will seek protection from the Constitutional Court.

Specifically, the judge has initiated a criminal probe to determine if Bankia had fudged its books in the bank's favor to convince regulators that it was financially secure so it could be listed on the stock market in 2011. He has since expanded his probe into the issue of preferred shares to determine if the selling of these complicated products involved fraud, misappropriation of funds, misleading advertising, criminal mismanagement or price fixing.

Bankia made its stock market debut in 2011 and had to be bailed out less than a year later

More than 30 officials, including those of the bank's parent company Banco Financiero y de Ahorros (BFA), are under investigation by the High Court.

In November, Andreu accepted a private prosecution complaint by the Union, Progress and Democracy (UPyD) party into the issuance of preferred shares, which wiped out the savings of many investors when the bank's stock plummeted.

The UPyD also asked the court to investigate Rato's compensation package, which he was given when he left the bank when it was nationalized in May 2012.

Andreu has asked Bankia for piles of records, including the civil liability insurance policies that covered the former and current bank officials who have been named in his investigation.

Among those who are being investigated are former Caja de Madrid chairman Miguel Blesa and Gerardo Díaz Ferrán, the former head of the Spanish Confederation of Business Organizations (CEOE) — Spain's largest employer group — who is in preventive custody in relation to a series of alleged offenses he committed in his business affairs. Judge Andreu also subpoenaed in June former bank officials Gonzalo Martín Pascual, Jesús Pedroche, Rodolfo Benito, José Manuel Fernández Norniella and José María Arteta.

Even though Durá came on board in 2011 soon after Bankia was listed on the stock market, the judge believes that he was responsible for maintaining the books to show that the bank's finances were solid.

Durá has said in the past that he wasn't responsible for helping Bankia seek its Ibex listing.

The judge has also named as defendant in his inquiry former financial officer Ildefonso Sánchez Barcoj, who was Durá's boss.

Bankia made its stock market debut in 2011 and had to be bailed out less than a year later. Some 350,000 retail investors suffered massive losses as a result of the failure.