Former IMF head Rato faces fresh corruption trial in Spain

Madrid (AFP) –


Former International Monetary Fund chief Rodrigo Rato must face a fresh corruption trial, just months after he was jailed over a massive fraud scandal at bailed-out Bankia, the Spanish authorities said Wednesday.

The Madrid high court said Rato, along with 12 others, will be tried on charges of corruption.

Anti-corruption prosecutors are seeking a sentence of four years' jail plus a fine of 2.5 million euros ($2.8 million).

Rato was jailed in October for four-and-a-half years for his role in a fraud scandal at failed lender Bankia, which he headed from 2010 to 2012.

The authorities also charged Rato in November over his role in listing Bankia on the stockmarket in 2011, accusing him of falsifying Bankia's accounts so as to trick investors.

Bankia was listed at the height of the financial crisis when the Spanish economy came close to collapse and it soon found itself in trouble.

Bankia's stockmarket listing was pushed as a great deal, drawing in many small and unsuspecting investors. But authorities were soon forced to bail it out in a massive rescue.

The Spanish government in 2012 then had to negotiate emergency support of more than 41 billion euros from the EU to prop up the banking sector.

The latest charges relate to deals allegedly offered by Bankia's management to public relations firms Publicis and Zenith in exchange for suspected bribes worth two million euros.

The Madrid high court said all those charged would have to put up sureties of about 4.5 million euros or face having their assets seized.

Rodrigo Rato, who headed the IMF from 2004 to 2007 and was Spanish economy minister, is also waiting judgement in a tax cheating case.

Rato was head of Caja Madrid which was merged with six other struggling savings banks to create Bankia in 2010.