July 10, 2013 / 4:01 PM / 5 years ago

IMF's Lagarde may be called as Bankia probe witness

MADRID, July 10 (Reuters) - A Spanish political party that triggered a high profile court investigation into the near collapse of bailed-out bank Bankia has asked for Christine Lagarde, the head of the International Monetary Fund (IMF), to testify as a witness.

The Union for Progress and Democracy (UPyD), which last year persuaded the high court to open an investigation into the bank’s listing and near demise, on Wednesday asked the judge leading the case to call Lagarde and another IMF official to be questioned, court documents showed on Wednesday.

The IMF declined to comment.

Several former executives of Bankia, including Rodrigo Rato, himself a former boss of the IMF and who was ousted as chief executive shortly before the bank requested a state bailout in May 2012, have been placed under formal investigation for fraud, price-fixing or falsifying accounts.

They deny the allegations.

Bankia needed 22.5 billion euros ($29 billion) in state funds to clean up its business, which was crippled by soured real estate assets, and its rescue, less than a year after it listed on the Madrid stock market, led Spain to ask for European funds to help its ailing banks.

Other Spanish officials such as Economy Minister Luis de Guindos and several chairmen of banks, including Santander and BBVA, have already appeared as witnesses.

UPyD wants Lagarde to answer questions over conversations De Guindos said he had held with her about Bankia in the weeks before the bank requested the rescue, the court documents showed.

Andres Herzog, a lawyer and member of UPyD, said the judge may not decide whether to call Lagarde or not before September.

UPyD also wants the court to ask Lagarde and Ceyla Pazarbasioglu, assistant to the director of the IMF’s Monetary and Capital Markets department, what information they had about Bankia’s situation before it requested the bailout.

The party said it would ask the high court to call on other new witnesses, including members of JPMorgan, which was one of the banks that handled Bankia’s listing, and Bankia executives such as current financial officer Leopoldo Alvear.

It also wants more information on the role played by Lazard, which worked on the stock market listing and where former CEO Rodrigo Rato had previously held a position.

The judge has yet to decide whether to allow new witnesses and evidence to be admitted.

$1 = 0.7821 euros Reporting by Sarah White; Editing by Mark Potter

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