MADRID, Feb 13 (Reuters) - Spain’s High Court said on Monday it would investigate a former head of the Bank of Spain and seven other financial figures over their role in the ill-fated listing of now state-controlled Bankia.
The lender became a symbol of Spain’s banking crisis when it was nationalised in 2012 through a 22.5 billion euro ($25 billion) bailout just a year after it was floated, wiping out its shareholders and triggering protracted legal action.
The court said it would investigate as suspects former Bank of Spain governor Miguel Angel Fernandez Ordonez and others including Julio Segura, former head of the CNMV supervisor, and his then deputy Fernando Restoy.
Restoy is now chair of the Bank for International Settlements’ (BIS) Financial Stability Institute.
Under the Spanish legal system people can be named as formal suspects until a more detailed investigation is carried out to back up charges.
Representatives of the Bank of Spain and the CNMV declined to comment on Monday’s ruling.
It was not immediately clear whether the suspects already have lawyers, as they had only been notified on Monday, a spokesman for Spain’s High Court said. Investigating judge Fernando Andreu has now to formally notify them when they have to appear in court.
The BIS did not immediately reply to a request for comment.
In the ruling, the High Court said there was evidence linking the suspects to “criminality”, after the investigation studied emails from Bank of Spain inspectors who had warned against giving Bankia the go-ahead to float.
“The emails’ contents leave no doubt about the decisive information the Bank of Spain’s management had in advance about (Bankia‘s) unviability and the fallacy of the results presented by the inspection team of the Bank of Spain,” the court said.
After restating its accounts in May 2012, Bankia revealed an almost 3 billion euro loss for 2011. The bank had stated previously that it had made a profit of just over 300 million euros.
Bankia replaced both its chairman and chief executive in 2012 and has bounced back from the losses that triggered its nationalization. The government said in December it plans to privatise it before the end of 2019.
The Spanish state, which owns 66 percent of Bankia, had created it in 2010 by grouping together seven lenders which had been toppled by the country’s property market crash. (Editing by Angus Berwick and David Holmes)