Spain's Bankia says has paid 1.2 bn euros over failed listing

19th May 2016, Comments 0 comments

Spain's state-rescued lender Bankia said Thursday it has paid out 1.2 billion euros ($1.35 billion) in compensation to small investors who bought into its failed stock market listing in 2011.

The bank returned money to over 190,000 people, either through its own claims scheme or following legal challenges, it said in a statement.

Bankia still has about 30,000 pending claims worth around 400 million euros to settle, it added.

Bankia, which was bailed out in 2012 less than a year after its listing, is accused of misrepresenting its accounts ahead of the flotation and hundreds of customers who say they lost their money after converting their savings to shares have brought separate lawsuits.

The bank, which was created in 2010 from the merger of seven troubled regional savings banks, was led at the time by former International Monetary Fund head Rodrigo Rato.

Spain's Supreme Court said in January that "serious inaccuracies" in the information provided by Bankia for the listing led investors into error -- opening the way for hundreds of millions of euros in compensation.

The court said that small shareholders had no source of financial data on which to base their decision to buy shares except what Bankia told them.

Rato and several other former Bankia managers are under investigation for fraud in connection to the group's stock market listing.

A Spanish court in February ordered Rato to stand trial for misusing funds when he was head of Bankia in a separate case.

No date for the trial has been fixed. He denies wrongdoing in both cases.

Bankia announced in February that it would reimburse minority shareholders the full amount of their original investment plus one percent annual interest on the money as compensation.

The lender and its parent company BFA said in December they had set aside 1.8 billion euros in provisions for claims.

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© 2016 AFP

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