December 18, 2015 / 2:27 PM / 4 years ago

UPDATE 1-Spanish court to probe claims against ex-Abengoa bosses

(Adds details, background)

By Jose Elías Rodríguez and Paul Day

MADRID, Dec 18 (Reuters) - Spain’s High Court said on Friday it would investigate allegations of mismanagement levelled at two former top executives of troubled engineering and energy firm Abengoa by some of its creditors.

Abengoa, which is trying avoid becoming Spain’s biggest-ever bankruptcy, has been brought to its knees by a large debt pile after rapid expansion into the clean energy business.

The court said it would probe compensation payments handed out to former Chairman Felipe Benjumea and ex-Chief Executive Manuel Sanchez Ortega, after a complaint over their severance payments from some Abengoa bondholders.

Benjumea, whose father founded Abengoa, will have to deposit 11.5 million euros ($12.5 million) with the court to cover potential liabilities, according to the ruling. The court will also look into accusations of insider trading against Sanchez, who has to post a bond of 4.5 million euros.

Both have 24 hours to deposit the funds, the court said, adding that if they do not it would look at freezing their assets.

Reuters’ attempts to reach Benjumea or Sanchez for comment were unsuccessful.

Law firms Ius & Aequitas and Izquierdo Asociados filed a lawsuit against the two executives last month on behalf of a group of Abengoa shareholders and bondholders, who questioned their compensation payments.

Abengoa is close to obtaining a short-term cash lifeline of around 210 million euros it needs to pay salaries and maintain current operations until the end of January, sources told Reuters earlier this week.

Its future beyond January remains uncertain, however, and it only has until mid-April next year to reach an agreement with its creditors to avoid a full-blown insolvency process.

The Seville-based firm has been under scrutiny over its debt levels for months, but mixed messages from the company over its plans for a rights issue turned up the pressure in August.

In November the situation worsened when an investor due to back Abengoa’s capital hike pulled out, and Abengoa entered pre-insolvency proceedings.

Although there is no official figure for the firm’s total financial liabilities, sources familiar with the matter have said they are at least 25 billion euros.

Benjumea stepped down as executive chairman in September, while Sanchez resigned as chief executive in May. Sanchez later joined investment fund BlackRock.

The High Court said it would ask the stock market regulator for information on trading in Abengoa shares by BlackRock since Aug. 1.

BlackRock did not comment. Abengoa was not immediately available to comment.

$1 = 0.9231 euros Additional reporting by Simon Jessop in London; Writing by Sarah White; Editing by Julien Toyer and Mark Potter

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