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State prosecutor opens criminal probe into Bankia

Nationalized lender and the Bank of Spain asked to provide documents to help investigation

The state prosecutors office’s has opened a probe to determine whether any crimes were committed in the establishment of ailing lender Bankia, an amalgam of seven savings banks, that was nationalized last month, Attorney General Eduardo Torres-Dulce said.

In an interview with Spanish newswire Efe published on Wednesday, Torres-Dulce said the prosecutor has requested a series of documents from Bankia itself and the Bank of Spain. The investigation was opened on May 28, prior to the filing of suit by individuals against Bankia’s corporate activities.

The attorney general said that independently of the strong “public demand” for an investigation into Bankia’s affairs, the prosecutor decided to initiate the case on its own “merits.”

The ruling Popular Party has blocked calls by opposition parties for Bankia chairman Rodrigo Rato, a former IMF managing director and economy minister in the previous PP government, and Bank of Spain governor Miguel Ángel Fernández Ordóñez to appear in Congress to field questions on Bankia. The PP also used its absolute majority to throw out lawmaker calls for Congress to set up a commission to examine the case.

The situation of the banks and the financial situation of the country demand that we be truly prudent”

Bankia and its Banco Financiero y de Ahorro (BFA) parent has requested 19 billion euros from the government to clean up its balance sheet, which has been badly hit by its exposure to the sclerotic property sector. Bankia was officially created at the start of 2011 through the merger of Caja Madrid and Bancaja and five other savings banks. It listed at 3.75 euros a share in July of last year after an initial public share offer that attracted hundreds of thousands of small investors and bank employees. It closed at 1.040 euros on Thursday, down 72 percent on its listing price.

Torres-Dulce said it was “premature” to detail the possible offenses committed by Bankia because the “situation of the banks and the financial and economic situation of the country” demand that we be “truly prudent.” The attorney general said the examination of the documents requested would determine whether possible crimes were committed before deciding whether to proceed with the case.

A Madrid court is currently deliberating over whether to accept a suit filed by the rightwing pressure group Manos Limpias against Rato and Fernández Ordóñez, who is due to stand down as governor next week, alleging “possible criminal offenses” in the creation of the bank and in the management of it.

Separately, the May 15 protest movement said Wednesday that a website it had set up to receive donations from the public to pursue a lawsuit against the bank and Rato had received 15,000 euros in 24 hours.

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