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Spain prosecutors seek five years jail for ex-IMF head Rato

AFP  |  Madrid 

Spanish prosecutors have asked for former IMF chief Rodrigo Rato to be jailed for five years over the failed 2011 listing of Bankia, a he led which later had to be rescued by the state.

Rato, a former Spanish economy minister, has already been sentenced to four years and six months in a separate case for misusing funds when he was the boss of Bankia, and Caja Madrid before that.

In a filing seen by AFP today, Rato is accused along with three other executives of falsifying information about Bankia's financial state to encourage investors to buy into the listing.

The was bailed out less than a year later in 2012 at the height of the crisis, and tens of thousands of small investors who had converted their savings to lost everything.

The near-collapse of Bankia almost brought down Spain's whole financial sector, which was bailed out later that year by international creditors for 41 billion euros ($46 billion).

Last year, Spain's Supreme ruled that "serious inaccuracies" in the information provided by Bankia led investors into error.

As the bank's "main executive," Rato was "fully aware of the inconsistency of the Bankia project and of its financial weakness" but still gave the green light for the listing, Spain's anti-corruption prosecution office argued.

They called for Rato to be handed a five-year jail sentence once the trial kicks off, and are seeking prison terms ranging from two years and seven months to four years for the three other executives.

But they have asked for charges of falsifying accounts to be dropped against Rato and 32 other executives.

And they also want the case to be dropped against Bankia itself as well as its parent company BFA.

Last year, the said it had paid out 1.2 billion euros in compensation to 1,90,000 small investors who bought into the failed listing, but added it still had about 30,000 pending claims to settle.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, June 14 2017. 00:22 IST