MADRID Jan 4 Spanish telecoms group Telefonica
has hired Rodrigo Rato, under investigation for fraud
at state-rescued lender Bankia when he was chairman,
to the advisory boards of its European and Latin American
Rato - who has also served as head of the International
Monetary Fund and as Spain's economy minister - will help
"reinforce the global vision of Telefonica", Spain's largest
telecommunication's company said on Friday.
Rato, ousted from Bankia when it was nationalised, and 32
other Bankia board members are the subject of an investigation
into fraud, price-fixing, and falsifying accounts.
Bankia was formed in 2010 from the merger of seven unlisted
savings banks. Rato and other executives, under political
pressure, listed the company in 2011. On May 9, 2012, the
government nationalised Bankia, which restated its 2011
Rato appeared in a private court hearing on Dec. 20 and
denied any wrongdoing. Investigating magistrate Fernando Andreu
has, so far, not brought charges against anyone and could still
drop the case, which was brought to the High Court by small
political party UPyD.
Bankia has been removed from Spain's IBEX-35 blue-chip index
until the results of a recapitalisation are clear. Its share
price has tumbled 83 percent over the past year.
Bankia will wipe out the investments of 350,000
shareholders, many of them small savers and pensioners, because
losses on bad loans at the troubled bank were worse than
In August, the King of Spain's son-in-law, under
investigation over allegations his charity was used to embezzle
public money, stepped down from his U.S. post at Telefonica to
distance the company from the scandal.
The company is looking to list up to 15 percent of its Latin
American businesses to cut debt after listing its German unit
($1 = 0.7666 euro)
(Reporting by Clare Kane; Editing by Paul Day and Dan Lalor)