Spain’s central high court has charged the former Bank of Spain governor Miguel Ángel Fernández Ordóñez.
The decision was followed by resignations of Bank of Spain officials, including the bank’s Director General of Supervision, Mariano Herrera Garcia-Canturri.
Miguel Angel Fernandez Ordonez led the Bank of Spain from 2006 to 2012.
Fernández is charged with allowing the floatation of 48% Bankia in July 2011, a move that has cost 200,000 investors millions.
The lender was created in 2010 through the consolidation of seven building societies that had offloaded their non-performing loans to a bad bank (BFA).
Bankia floated on the stock exchange for €3.75 a share; within a year, the stock’s value was under €1. There is now evidence to suggest that Fernández Ordóñez was perfectly aware that the bank was troubled and should never be listed. The bank was soon partially nationalized.
At the year of its floatation, the lender cheated investors, reporting a €4,3bn deficit as a €309 million profit. Charges have also been issued against the former securities watchdog chief, Julio Segura, and several of their aides.
The case could touch more high profile bankers
The Court reverses the decision of the anti-corruption prosecutor, Alejandro Luzón, who dropped the case against Fernández Ordóñez and Segura in November 2016.
However, the Court had new evidence at its disposal, including four emails from Bank of Spain inspectors alerting their superiors about the risks of listing Bankia. The Court also saw a report that had been delivered to the bank’s management that clearly stated that Bankia’s IPO prospectus was fraudulent, El Pais reports.
At the time, Bankia was run by the former IMF chief Rodrigo Rato, who is also under investigation on tax fraud.