Rodrigo Rato. Picture: REUTERS
Rodrigo Rato. Picture: REUTERS

Madrid  —  Former International Monetary Fund (IMF) boss Rodrigo Rato was acquitted on Tuesday in a fraud trial over the listing of Bankia, when he was its chair, prompting calls for legal changes from consumer groups.

Rato, who resigned from the Spanish bank in May 2012 and has always denied any wrongdoing, is serving a four-and-a-half year sentence after being found guilty of embezzlement in a separate trial over the misuse of Bankia credit cards.

Another 33 people and entities charged in the high-profile trial relating to Bankia's ill-fated 2011 listing were also cleared, the sentence from Spain's high court showed.

This included Bankia itself, which is in the middle of a merger with Caixabank.

Rato's lawyer did not reply to a request for comment, while Bankia reiterated on Tuesday its denial of any wrongdoing in the case.

Almost two years after it started, the outcome of the trial is politically and socially charged as more than 300,000 retail shareholders lost their investments in Bankia, which within a year of its float had to be bailed out by the government.

The ruling, which can be appealed before Spain's supreme court, immediately prompted criticism from consumer associations Adicae and Asufin, whose head Patricia Suarez said the sentence was "disappointing and incoherent".

'15MpaRato', a group which was among the first to seek better protection in court for consumer rights, called for legal changes to better pursue market abuse after the ruling.

As part of separate civil proceedings, Bankia has already paid retail investors around €1.9bn in compensation relating to losses they sustained in the initial public offering (IPO).

Several institutional shareholders have also taken legal action against Bankia, with claims for up to €30m, a source with knowledge of the matter said.

Bankia said in September that any litigation risks stemming from the IPO had been factored into the Caixabank tie-up.

Accurate prospectus

In its 442-page ruling, the court said that the financial information included in Bankia's IPO prospectus was accurate and more than enough for institutional and retail investors to form a reasoned opinion from.

Spain's public prosecutor had sought an eight-and-a-half year jail sentence for Rato, a former Spanish economy minister was IMF chief between 2004 and 2007.

Less than a year after Bankia's IPO raised €3.1bn, it restated a 2011 profit of slightly above €300m with a €3bn loss.

This was done by Bankia's current management team, headed by chair Jose Ignacio Goirigolzarri, who is poised to become chair of the new combined entity with Caixabank.

During the trial, Rato attributed the accounting changes to writedowns against future losses when Bankia changed management rather than to actual losses on his watch and said that the Bank of Spain was aware of his decisions.



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