MADRID (Reuters) - Former IMF boss Rodrigo Rato was acquitted on Tuesday in a fraud trial over the listing of Bankia, when he was its chairman, 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 4-1/2 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.
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’ 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 1.9 billion euros ($2.22 billion) in compensation relating to losses they sustained in the IPO.
Several institutional shareholders have also taken legal action against Bankia, with claims for up to 30 million euros, a source with knowledge of the matter said.
Bankia said this month that any litigation risks stemming from the IPO had been factored into the Caixabank tie-up.
In its 442-page ruling, the court said that the financial information included in Bankia’s initial public offering (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 half years jail sentence for Rato, a former Spanish Economy minister was International Monetary Fund chief between 2004 and 2007.
Less than a year after Bankia’s IPO raised 3.1 billion euros, it restated a 2011 profit of slightly above 300 million euros with a 3 billion euro loss.
This was done by Bankia’s current management team, headed by chairman Jose Ignacio Goirigolzarri, who is poised to become chairman 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.
($1 = 0.8557 euros)
(This story was refiled to add dropped words “its denial of” in paragraph 5)
Reporting by Jesús Aguado and Emma Pinedo; Editing by Ingrid Melander and Alexander Smith
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