Spain opens fraud investigation against former Bankia head

Former Bankia chief executive Rodrigo Rato is being investigated by Spain’s high court in a fraud probe related to Bankia, the troubled lender which was partially bailed out by the Spanish government in May.

According to the probe, which involves Rato (pictured) along with 32 other top executives of Bankia, the former chief executive and his management were responsible for falsifying Bankia’s accounts and for misleading investors during the stock market listing of the bank.

They are also being investigated for price-fixing activities.

Rato, former Spanish finance minister, took charge of Bankia in 2010 and resigned in May when the bank was forced to seek help.

In May, the lender was forced to request government aid, eventually leading Spain to seek a bailout of up to €100bnfrom other eurozone members.

The case has been brought to the court by a small political party and could be the first step of a bigger investigation likely to involve prominent names in Spanish politics and business.

Over the past weeks, European autorities have unveiled a number of investigations against senior politicians.

On July 3, French police searched the home and offices of former French president Nicolas Sarkozy as part of a campaign financing probe.

The French investigation is related to allegations that Sarkozy received illegal donations from Liliane Bettencourt during his presidential campaign in 2007.

Last week, Paul Tucker, the Bank of England deputy governor, was drawn into the the latest UK banking scandal linked to manipulation of Libor.

Tucker will have to give evidence to clarify his position regarding events involving the Bank of England in the scandal, including a telephone conversation with former Barclays chief executive Bob Diamond on 29 October 2008.

Photo: Reuters

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