MADRID (Reuters) – Rodrigo Rato blamed the Bank of Spain for mishandling the creation of Bankia <BKIA.MC> on Tuesday at a trial in which the former International Monetary Fund chief and three other ex- board members of the Spanish lender are accused of fraud.
Rato, who denies any wrongdoing, was Bankia’s chairman at the time of a merger of seven unlisted regional banks to form Bankia in 2010 and its ill-fated 2011 initial public offering.
Less than a year after the 3.1-billion-euro (£2.7 billion) IPO, Bankia reported a 3 billion euro loss, prompting a 22.5 billion euro state bailout and its nationalisation.
“The Bank of Spain clearly indicated to us the steps that we had to take. I don’t remember that they gave us many options,” Rato said of the consolidation process during his first comments at the trial, which is expected to last for months.
More than 30 executives of the bank and its parent company Banco Financiero de Ahorros (BFA) are expected to give evidence.
The Bank of Spain was not immediately available for comment on the testimony by Rato, who resigned from Bankia in 2012 and is already serving a 4-1/2 year prison term for embezzlement.
He has always denied any wrongdoing at Bankia, whose collapse wiped out the savings of more than 300,000 retail investors.
A small Spanish political party, UPyD, forced Spain’s High Court more than six years ago to open a criminal investigation into whether Rato and other Bankia bosses were guilty of fraud, price-fixing or falsifying accounts.
Rato could face up to five years in jail if found guilty.
(Reporting by Paul Day, editing by Andrei Khalip and Alexander Smith)