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Former central bank chief charged over Bankia scandal

A former head of Spain's central bank has been charged for allowing the troubled lender Bankia to list on the stock exchange despite strong warnings. Investors lost millions when the bank had to be bailed out.

Miguel Angel Fernandez Ordonez, who was in charge of Spain's central bank from 2006 to 2012, was charged Monday over a disastrous listing of Bankia that saw small investors lose a lot of money as strong warnings that the lender was not viable were ignored at the time.

Bankia was bailed out in May 2012, less than a year after its listing, and stood accused of misrepresenting its accounts ahead of the flotation.

The scandal also saw former economy minister and ex-IMF chief Rodrigo Rato being charged.

An investigating magistrate had initially decided not to take action in the case of Ordonez, but two unions and plaintiffs appealed the decision, leading to Monday's ruling by the National Court.

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Former IMF chief Rodrigo Rato stands trial (2016)

Data manipulation

Bankia was created in 2010 at the height of Spain's banking crisis, emerging from the tie-up of seven troubled regional savings banks.

The Supreme Court said that some 200,000 small investors had no source of financial data on which to base their decision to buy shares except what Bankia itself told them, but the latter had allegedly bent over backwards to make its disastrous data appear in a better light.

Consequently, the state-rescued lender has already had to pay out millions of euros in compensation.

hg/sri (AFP, dpa)

 

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