Ex-IMF head Rato told to pay €3m court bond in Spain bank fraud inquiry

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Ex-IMF head Rato told to pay €3m court bond in Spain bank fraud inquiry

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A Spanish court has ordered the IMF’s former chief Rodrigo Rato to pay a three million euro court bond over an investigation into a fraud scandal at a bailed-out bank.

A second suspect, Miguel Blesa, has been ordered to pay 16 million euros.

The pair face possible charges over allegations that when they were executives at the Bankia group and its founding lender Caja Madrid, corporate credit cards were used for lavish private expenses.

Eighty-six bankers and advisers including politicians and trade union leaders are said to have run up bills totalling 15 million euros over almost a decade, on items including hotels, restaurants and cash withdrawals.

Most of the beneficiaries are said to have continued to use their credit cards after Bankia was formed from the merger of six regional savings banks in 2010.

Bankia’s current management unearthed the scandal and alerted the authorities.

Chief Executive José Ignacio Goirigolzarri, insists the bank is now clean.

“As a team we must make it absolutely clear that this was what happened in the past and that the future, as I’ve said before, is very positive for Bankia,” he said.

The court hearing brought a small protest outside; the scandal has sparked outrage.

Several top officials have either resigned or been sacked.

Bankia’s internal inquiry reportedly found that the credit cards were handled separately from regular corporate expenses.

The bank’s near-collapse in 2012 forced Spain to seek a 41 billion-euro EU bailout; Bankia itself absorbed 22 billion euros in public aid.