Ex-IMF boss goes on trial over Spain Bankia fraud

PanARMENIAN.Net - Former IMF chief Rodrigo Rato and 64 other bankers have gone on trial in Madrid over an alleged credit card racket at Spain's troubled Bankia bank, according to BBC News.

The defendants allegedly used "unofficial" company credit cards for luxury purchases, unconnected with their duties as board members.

Prosecutors say about €12m ($13.5m) was spent on hotels, fine clothes, entertainment and travel.

Rato denies wrongdoing. Bankia was rescued in 2012 at huge public expense.

The unofficial credit card purchases were not declared to the tax authorities. The system allegedly started at Caja Madrid bank and was continued by Rato when Bankia was created in 2011.

A member of the governing centre-right Popular Party (PP), Rato resigned as head of Bankia shortly before its near-collapse in 2012.

The government bailout of Bankia inflicted losses on 200,000 small investors, who held preferential shares in the bank.